The 1099-MISC — called the 1099 for short — is to contract workers what the W-2 is to paid employees. The 1099 is a tax form issued by a company to nonemployee workers who received at least $600 in financial compensation from the company (Reference 1). If you live in Alabama and received one of these forms from a company, you'll have to file a copy of it along with your state tax returns. The process varies depending on whether you are the company or the worker.
Filing a 1099 in Alabama as a worker
Ask for a copy of your 1099 from the paying company if you haven't received one by January 31. This is the date by which companies must send out 1099s to compensated workers. The 1099 will refer to financial compensation received during the previous year.
Save a copy of the 1099 for your personal records.
Report any earned income listed on the 1099 on your Alabama tax forms. These forms can be downloaded at the Alabama Department of Revenue's website (see Resources section).
Determine whether or not you owe Alabama income tax. This is more likely if you chose not to have some of the earnings reported on your 1099 withheld for state tax purposes.
Mail your forms — including a copy of the 1099 — to the Alabama Department of Revenue. If you owe the state money, mail completed forms to:
Alabama Department of Revenue
P.O. Box 2401
Montgomery, AL 36140-0001
If you do not owe the state any income taxes, mail forms to:
Alabama Department of Revenue P.O. Box 154
Montgomery, AL 36135-0001
Filing a 1099 in Alabama as a company
Obtain the necessary information to fill out the 1099 form. You will need your company's full name and address, its federal employer ID number (EIN) and either the social security number of the individual receiving payments or the EIN of the company receiving payments.
Fill out the 1099 form using the information from Step 1. You will also need to know exactly how much the contract worker or contracting company received in payments from your organization. Boxes 16 through 18 specifically refer to the state in which the compensation was earned, as well as any state income tax that was withheld (Reference 3).
Mail the completed 1099 forms to the individuals or companies in question no later than January 31.
Send a copy of the completed 1099 forms to the IRS and to the Alabama Department of Revenue. If you are mailing a 1099 whose recipient has already had state income tax withheld, send it to:
Alabama Department of Revenue Withholding Tax Section
P.O. Box 327480 Montgomery, AL 36132-7480
If you are submitting a 1099 that has not had Alabama state income tax withheld, mail forms to:
Alabama Department of Revenue Form 99 P.O. Box 327489
Montgomery, AL 36132-7489
Keep a copy of the completed 1099 forms in your company's records.
Keep a copy of any payments received for contract or freelance work throughout the year. This will help you know whether or not you've met the $600 annual threshold and will be receiving a 1099 from a company or companies.
It is against the law to withhold information regarding financial compensation. Doing so could result in legal charges, including tax evasion.