How to File Your Alabama Tax Return for 2016: Step-by-Step Guide for Individuals and Small Businesses

Filing your Alabama tax return for 2016 may seem overwhelming, especially if it’s your first time handling your taxes. Whether you're an individual taxpayer, part-year resident, or small business owner, this guide offers step-by-step guidance to help you complete the process with less hassle and more confidence. Using the correct forms and following rules specific to the 2016 tax year is essential to avoid delays, penalties, or mistakes.

This article covers everything you need to know—from determining if you need to file to selecting the correct form, understanding your filing status, and submitting your return. You'll also learn how to calculate what you owe, how to claim a refund, and which deductions might apply. With the right tools and updated information, filing doesn’t have to be stressful, even if you do it several years after the original deadline.

If you want to maximize your refund, avoid common errors, or get expert help understanding the process, this resource is here to support you. Whether you plan to file online or by paper, we’ll walk you through each step so you can file your taxes accurately and on time—even if that time is now.

Who Needs to File a 2016 Alabama State Tax Return?

Your residency status, income level, and type of income earned determine your filing requirements for the 2016 Alabama tax year. If you lived in Alabama full-time or part-time or made money from Alabama sources as a non-resident, you may have had to file a tax return. People and small business owners should carefully read the requirements to determine if they need to file.

You were required to file a 2016 Alabama tax return if you met any of the following conditions:

1. You were a full-year Alabama resident, and your gross income was at least:
   
   
   
   • $4,000 if single
     
     
   • $5,250 if married filing separately
     
     
   • $7,700 if head of family
     
     
   • $10,500 if married filing jointly
     
     
2. You were a non-resident who earned income from Alabama sources.
   
   
3. You were a part-year resident who received income while living in Alabama.
   
   
4. You were claimed as a dependent on someone else’s return, but still had income above Alabama’s threshold.
   
   
5. You were self-employed or owned a small business in Alabama during any part of 2016.

These limits apply to both single and joint tax returns. Your filing status is a significant factor in whether or not you need to file and which form you should use. You can still file a return for a refund or credits owed, even if your income was below the minimum requirement. People who only lived or worked in Alabama for part of the year must use the proper form to report income earned in the state. If you're not sure if you need to file, the Alabama Department of Revenue can help you with tools or advice from experts.

2016 Alabama Tax Filing Deadlines and Extension Rules

Filing deadlines for the 2016 Alabama tax return followed the same general timeline as the IRS deadlines for that year. You were expected to file by the original due date if you lived, worked, or earned income in Alabama during 2016 and met the filing requirements. Understanding the difference between filing and payment deadlines is essential to avoid penalties and added interest.

The key dates for the 2016 tax year are as follows:

• The original deadline to file your tax return and pay any taxes owed was April 18, 2017.
  
  
• The state of Alabama offered an automatic six-month extension to file, moving the extended due date to October 16, 2017, without requiring a separate extension form.
  
  
• If you were required to make estimated quarterly tax payments, those were due on April 15, June 15, September 15, 2016, and January 15, 2017.
  
  

It’s important to note that while Alabama provided an automatic extension to file, this was not an extension to pay. If you owed taxes for 2016, payment was still due by April 18, 2017. Late payments were subject to penalties of 1% per month, up to a maximum of 25%, along with interest that accrued until the full amount was paid. To avoid additional costs, taxpayers were encouraged to pay by the original deadline, even if they needed more time to complete the return.

Which 2016 Alabama Tax Forms Do You Need?

When you file your Alabama tax return, using the proper forms is very important. The forms and schedules you must complete depend on your residency status, income type, and filing situation. If you send in the wrong form or leave out important documents, your processing could take longer, or you could miss out on a refund.

Primary forms for individual taxpayers:

• People who live in Alabama all year round use Form 40 as their standard tax return form.
  
  
• Form 40A is a simpler version that some residents can use if their tax situation is simple.
  
  
• If you lived in Alabama for part of the year or were not a resident at all in 2016, you must fill out Form 40NR.

Standard schedules and supporting forms:

• Schedule A reports itemized deductions such as medical expenses, charitable donations, and mortgage interest.
  
  
• Schedule B is used to report interest income and dividends.
  
  
• Schedule CR allows you to claim a credit for taxes paid to other states on the same income.
  
  
• Schedule D is used to report capital gains and losses.
  
  
• Schedule DC is used for charitable contribution checkoffs.
  
  
• Schedule E reports supplemental income or loss from rental properties or partnerships.
  
  
• Form 4952 is used to report investment interest expense deductions.
  
  
• Form 2210AL is required to calculate underpayment penalties for estimated tax.
  
  

Additional forms for small business owners and sole proprietors:

• Federal Schedule C or C-EZ is used to report business income and expenses; this form must include your Alabama return.
  
  
• Schedule F is used if you earned farm income during 2016.
  
  
• Alabama Schedule E is used to report business-related income earned in the state.

All 2016 forms and instructions can be downloaded from the Alabama Department of Revenue website. Ensure the forms are labeled for the 2016 tax year, as using updated or incorrect forms from other years could cause confusion or rejection.

Step-by-Step Instructions for Completing Your 2016 Alabama Tax Return

Whether you are an individual or a small business owner, completing your 2016 Alabama tax return involves multiple steps. From gathering documents to signing your return, each step should be completed carefully to avoid mistakes that could delay processing or result in penalties.

1. Gather all necessary documents before you begin:

• Collect W-2 forms from each employer who paid you in 2016.
  
  
• Include 1099 forms for additional income, such as freelance work, dividends, or interest payments.
  
  
• Have a copy of your federal tax return (Form 1040, 1040A, or 1040EZ) on hand, as Alabama starts with your federal adjusted gross income.
  
  
• Compile receipts and records for deductible expenses, such as charitable contributions or business expenses.
  
  
• Be prepared with Social Security numbers for yourself, your spouse (if applicable), and any dependents.
  
  
• If you filed an Alabama return the previous year, use it as a reference for consistency.
  
  
• Include proof of any estimated tax payments made during 2016 to ensure proper credit is applied.
  
  

2. Fill out Alabama Form 40 (for full-year residents):

• Enter your personal information, including name, address, Social Security number, and filing status.
  
  
• Calculate your adjusted gross income in Alabama, starting with your federal AGI. You’ll need to:
  
  
  
  • Add any income required by Alabama that has not been reported on your federal return, such as federal tax refunds.
    
    
  • Subtract any income that Alabama excludes, such as federal income tax paid.
    
    
• Determine your deduction type. You may take the standard deduction, which varies based on your filing status and income, or choose to itemize your deductions using Schedule A.
  
  
• Subtract deductions and personal exemptions to arrive at your taxable income.
  
  
• Use the 2016 Alabama tax tables to determine your tax liability based on your taxable income.
  
  
• Apply any eligible tax credits, such as
  
  
  
  • The credit for taxes paid to other states (Schedule CR)
    
    
  • The child care credit
    
    
  • The small business job creation credit (for qualified businesses in 2016)

3. Enter payments and determine the final balance:

• Report any withholding amounts already paid through your employer or estimated payments.
  
  
• You are eligible for a refund if your total payments exceed the tax owed.
  
  
• If your tax liability exceeds your payments, you must pay the balance due with your return.

4. Final steps to complete your return:

• Review all entries carefully and correct any mistakes before submission.
  
  
• Sign and date your return. If filing jointly, your spouse must also sign.
  
  
• Attach all supporting documentation, including W-2s, 1099s, and schedules.
  
  
• Save a complete copy of your return and all attachments for your records.

Remember to transfer net profits from your federal Schedule C or C-EZ to the appropriate line on your Alabama return if you're a sole proprietor or small business owner. Include all schedules and documentation required to report your business activity accurately.

How to File Your Return (Paper and Electronic Options)

Alabama offered several methods for filing your 2016 tax return. Whether you prefer using online tools or mailing in a paper form, choosing the filing method that fits your situation is essential. Electronic filing is generally faster and more secure, but both options are available for prior-year returns, like 2016.

Electronic filing options for 2016:

• The Alabama Department of Revenue runs an official online site called My Alabama Taxes (MAT), where you can file your taxes for free. This system allows people to log into their accounts, file their taxes, and pay their bills from any device.
  
  
• For 2016 returns, many tax preparation software programs let you e-file with the federal and state governments. These tools showed you how to do things and helped you make fewer mistakes.
  
  
• You could also file electronically with the help of tax professionals or preparers who have been approved by the IRS and the state of Alabama.

Paper filing instructions:

• You could print your completed return and mail it to the Alabama Department of Revenue. Ensure all forms are for the 2016 tax year and are filled out completely and clearly.
  
  
• Be sure to include all W-2s, 1099s, and a copy of your federal return if required. Paper filings that are missing key attachments may be delayed or rejected.
  
  
• Sign and date the return before mailing it.
  
  
• Send the return to the correct address based on whether you expect a refund, owe money, or have a zero balance. The 2016 instructions provided by the Alabama Department of Revenue list mailing addresses.

While e-filing offers faster processing—typically 8 to 10 weeks—paper returns may take up to 12 weeks or longer. E-filing also confirms that your return was received, making it a more reliable option if you’re filing several years late and want to avoid further delays.

Payment Methods for Taxes Owed in 2016

If you owed taxes on your 2016 Alabama return, the state offered several options to submit payment. Making a complete and timely payment helped avoid penalties, interest, and collection action. Whether you’re paying electronically or by mail, indicate the tax year and form associated with the payment.

Electronic payment options:

• You could pay directly through My Alabama Taxes (MAT). This method allowed you to log in, select the 2016 return, and complete payment using your bank account or card.
  
  
• Credit and debit card payments were available through third-party processors on the Alabama Department of Revenue website. Card payments incur a convenience fee, typically around 2.5%.
  
  
• Electronic Funds Transfer (EFT) enables a direct withdrawal from your bank account. This option typically had no additional fees and offered quick confirmation of payment.

Paper payment options:

• You could mail a check or money order payable to the Alabama Department of Revenue. Write “2016 Form 40” and your Social Security number on the memo line to ensure the payment is applied correctly.
  
  
• If filing electronically but paying by mail, include the Form 40V payment voucher with your check. This helps the department match your payment to your return.
  
  
• Do not staple or tape your check to your tax return.

Penalties and late payments:

• If you didn’t pay your taxes by April 18, 2017, Alabama charged a penalty of 1% per month, up to 25% of the unpaid tax amount.
  
  
• Interest also accrued monthly at the rate set by Alabama law.
  
  
• If you could not pay the full amount owed, you were encouraged to pay as much as possible and contact the Alabama Department of Revenue to discuss payment arrangements. Partial payments may reduce penalties and demonstrate good faith.

Filing your return without payment may result in legal consequences, so even if you're paying several years late, it’s better to file and settle as soon as possible.

How to Track a Refund or Verify a Balance Due

If you filed your 2016 Alabama tax return and expected a refund, you could check its status through several channels. Likewise, if you owed taxes and made a payment, it was essential to confirm that your payment was received and processed correctly.

To track your 2016 refund:

• Visit the My Alabama Taxes (MAT) portal at myalabamataxes.alabama.gov and use the “Where’s My Refund?” feature.
  
  
• Call the 24-hour refund hotline at 1-855-894-7391 to get an automated status update.
  
  
• For more detailed help, call a representative at 334-309-2612 during business hours.

When you return, you must provide your Social Security number and the refund amount. Be sure to allow at least six weeks after filing before checking your refund status. E-filed returns were generally processed within 8–10 weeks, while paper returns took up to 12 weeks or more, especially for late filings or those requiring manual review.

To verify payment or balance:

• Log in to My Alabama Taxes and check your account for payment history or outstanding balances.
  
  
• If you mailed a check, verify it has cleared your bank account.
  
  
• If no payment appears in your account after several weeks, contact the Alabama Department of Revenue at 334-242-1170 to resolve any issues.

Delays can occur when returns are filed close to deadlines, submitted with missing forms, or flagged for review. Confirming your refund or payment status gives peace of mind and helps you avoid surprises.

Final Checklist Before Filing

Reviewing your forms and attachments carefully before submitting your 2016 Alabama tax return is essential. A complete, accurate return helps avoid delays, rejections, or penalties. Use the checklist below to confirm that every part of your tax filing is ready. Whether mailing your return or filing electronically, double-checking each step can save you time and frustration.

Use this checklist to prepare your return:

• Ensure your Alabama Form 40, 40A, or 40NR is fully completed and all math has been double-checked. If you don't complete or complete the forms, your refund or balance due may take longer to process or be incorrect.
  
  
• Add W-2s, 1099s, and any other papers that show income. These forms show how much money you made and how much your employer has already taken out of your pay for taxes.
  
  
• Please include all necessary schedules and supporting documents, such as Schedules A, B, and CR, and any necessary business-related forms.
  
  
• If you are filing by mail, include a copy of your federal return (Form 1040 or something similar) because Alabama starts its process with your federal numbers.
  
  
• Please include your payment or refund information. This means providing your bank account information for direct deposit or sending your payment and Form 40V if you owe.
  
  
• Make sure your return has a signature and date. If you are filing jointly, both spouses must sign.
  
  
• If you're sending your return by mail, use the correct address based on your situation, such as if you want a refund, are making a payment, or don't have a balance.
  
  
• Keep a full copy of your return, forms, and any attachments. If you need to look at these records again or change your return later, keep them safe.

You can lower the chance of making mistakes and help ensure your return is processed quickly by carefully following each step on this checklist. Even if you file your taxes a few years late, checking your return before you send it in can save you more trouble.

Frequently Asked Questions

What if I missed the April 18, 2017, deadline to file my Alabama tax return for 2016?

If you missed the original filing date for your Alabama tax return 2016, you should still file as soon as possible. Filing, even several years late, helps avoid additional penalties and interest. The state offers an automatic six-month extension to file, but not to pay. You’ll need to complete the proper form, calculate what you owe, and pay any balance due to limit further financial consequences.

Can I still get a refund if I file my taxes late for 2016?

Yes, but only if you file within three years of the original due date. If you file your taxes more than three years late, you may forfeit your refund. The IRS and Alabama Department of Revenue require you to file a complete and accurate return using the correct form. Be sure to include all income, deductions, and credits to help determine your eligibility for a refund.

How do I choose the correct filing status for my 2016 Alabama tax return?

Your filing status affects how much you owe or receive as a refund. You can choose single, head of family, jointly married, or separately. Your status depends on your marital situation and household circumstances as of December 31, 2016. The correct filing status helps determine your standard deduction, credits, and the tax rate for calculating your return. If unsure, seek expert help to avoid errors.

Can I still file my Alabama 2016 tax return electronically?

Electronic tax filing for 2016 may no longer be available through some platforms. However, you can still file your taxes using the My Alabama Taxes (MAT) portal or with a tax professional with access to older filing tools. While e-filing is fast and helpful, mailing a complete paper return remains an option. Access the correct forms and follow updated instructions to file correctly.

What if I made a mistake on my 2016 Alabama tax return?

If you discover an error on your 2016 return, you can correct it by filing an amended return. Use the same Alabama Form 40 and check the box indicating it’s amended. Complete the return with updated information and include an explanation of the mistake. Acknowledging and fixing filing issues is essential to avoid processing delays or refund problems. Expert help can guide you through the correction process if needed.

Can small business owners claim deductions on their 2016 Alabama return?

Small business owners who operated in Alabama during 2016 can claim eligible deductions. These may include business expenses, home office costs, and contributions to retirement plans. You may also qualify for the Small Business Job Creation Credit if you created jobs. Use the correct forms to report income and deductions and ensure they reflect IRS and state requirements. Guidance from tax experts can help you claim your max refund.

What if I owe taxes but can’t pay the full amount immediately?

If you owe money but can’t pay it all at once, pay as much as possible by the original due date to reduce penalties. Then, contact the Alabama Department of Revenue to discuss a payment plan. Partial payments can help lower the balance over time. Filing your tax return shows good faith, even if you can't pay in full. Use updated tools or consult a tax expert to manage your tax debt.