In Alabama, a "dependent" is defined as an individual other than the taxpayer and their spouse who received over 50% of their support from the taxpayer during the tax year and meets certain relationship criteria specified by state law. For dependents residing in Alabama, they must file a return if they have sufficient income that requires them to do so according to Alabama guidelines.
A key point regarding dependents' exemptions involves students; specifically, a student's income is fully taxable just like any other individual requiring a return. However, if eligible, a dependent or student can claim a personal exemption of $1,500. Additionally, parents may claim a dependent exemption for these individuals if they provide more than half of the total support needed.
For taxpayers who qualify as either part-year residents or nonresidents having income sourced from Alabama, special rules apply concerning where to declare exemptions. Specifically, if a person was a part-year resident and has income from Alabama sources during periods of non-residence, they need to file both Forms 40 (Part-Year Resident) and 40NR (Nonresident), claiming all applicable exemptions solely on the part-year resident return (Form 40).
Details:
- Forms Involved:
- Alabama Form 40: Used by part-year residents.
- Alabama Form 40NR: Used by nonresidents earning income from Alabama sources.
- Exemptions Claiming Rules:
- Total personal and dependent exemptions must be declared exclusively on the part-year resident return (Form 40).
- These exemptions cannot be claimed again on the nonresident return (Form 40NR).
This ensures proper allocation based on residency status and prevents double-counting of exemptions across different filings.
Source:
https://www.revenue.alabama.gov/ultraviewer/viewer/basic_viewer/index.html?form=2025/01/24f40bk.pdf
https://www.revenue.alabama.gov/ultraviewer/viewer/basic_viewer/index.html?form=2025/01/24f40nrbk.pdf