IRA Distributions (Traditional, Roth, and Educational IRAs)
Report all IRA distributions on Schedule RS. This includes:
- Regular withdrawals
- Early withdrawals
- Rollovers
- Roth conversions
- Any money or property received from an IRA
Use Form 1099-R to report the distribution. The form shows the:
- Gross distribution
- Taxable amount
If the taxable amount shown on Form 1099-R is correct for Alabama, enter it directly on Schedule RS (Part II for the taxpayer or Part III for the spouse).
If the taxable amount shown on Form 1099-R is not correct for Alabama because your Alabama cost basis differs from the federal basis, complete the Alabama Taxable IRA Distribution Worksheet (Page 13 of the Form 40 Instructions) to determine the Alabama taxable amount. Enter the calculated taxable amount on Schedule RS.
Pensions and Annuities
Report pension and annuity income on Schedule RS. This includes:
- Pension distributions
- Annuities
- SEP plan distributions
- Keogh plan distributions
- 401(k) plan distributions
- 403(b) plan distributions
- Profit-sharing plan distributions
Use Form 1099-R or Form W-2P to report the distribution.
If the distribution is fully taxable for Alabama purposes, enter the taxable amount on Schedule RS (Part II for the taxpayer or Part III for the spouse).
If the distribution is only partially taxable because you have unrecovered contributions or a different Alabama cost basis, complete the Alabama Taxable Retirement Distribution Worksheet (Page 13 of the Form 40 Instructions) to determine the Alabama taxable amount before reporting it on Schedule RS.
Important Note
The Alabama taxable amount may differ from the federal taxable amount when the taxpayer has an Alabama cost basis that differs from the federal basis. In these situations, use the applicable worksheet in the Form 40 Instructions to calculate the Alabama taxable amount before completing Schedule RS.
Source:
Form 40 (Alabama Individual Income Tax Return)
Form 40NR (Alabama Individual Income Tax Return for Nonresidents)
SCHEDULE RS INSTRUCTIONS
Disclaimer: Always verify details with the most current Federal or State Department of Revenue Forms and Instructions. For complex situations, consult a CPA or tax attorney.