# Form PTE-C — Alabama Form PTE-C: composite tax for nonresident owners

- **Canonical URL:** https://formspedia.com/us/alabama-pte-c/
- **Last updated:** 2026-11-09
- **Country & Language:** United States (`en-US`)
- **Form:** Form PTE-C
- **Revision:** 2025
- **Issuing Agency:** Alabama Department of Revenue
- **Tax Area:** Business and corporate tax
- **Who Must File:** Partnerships, LLCs and S corporations paying Alabama tax for nonresident owners
- **Filing Method:** Paper return mailed separately from Form 65 or Form 20S
- **Where to Send:** Alabama Department of Revenue, PTE-C, P.O. Box 327444, Montgomery, AL 36132-7444
- **Filing Deadline:** March 15, 2026 for calendar-year 2025 returns
- **Legal Basis / Statute:** Ala. Code § 40-18-24.2
- **Official Form PDF:** https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25fptec.pdf

Form PTE-C is the Nonresident Composite Payment Return of the Alabama Department of Revenue. A partnership, LLC or S corporation uses it to report the Alabama taxable income of some or all of its nonresident owners and to pay tax on that income for them, at 5% of each owner's share. The 2025 form has a one-page return, a page of entity questions, Schedule PTE-CK1 with one row per nonresident owner, Schedule PTE-AJA for the Alabama Jobs Act investment credit and Schedule NRC-Exempt (revision 4/23). The 2025 return was due March 15, 2026 for calendar-year entities.

### Who files Form PTE-C and who is left off

The 2025 instructions require a partnership, or any other entity treated as a Subchapter K entity, to file a composite return and make composite payments when it has one or more nonresident owners or members at any time during the tax year. S corporations use the same return for their nonresident shareholders. The checkboxes at the top of page 1 cover a Subchapter K entity, an S corporation, a Qualified Investment Partnership and a Series LLC.

Three situations change that picture:

- An entity that elects to be taxed as an Electing Pass-Through Entity files Form EPT, and according to the Department's FAQ the composite return is then not required.

- A Subchapter K entity or S corporation that was itself credited with a composite payment on another entity's PTE-C must also file a composite return, to allocate that payment among its own owners.

- A nonresident member that is exempt from Alabama income tax is still listed with its name, taxpayer identification number and income, but its composite payment is zero unless the income is unrelated business taxable income under 26 U.S.C. § 512.

The composite payment does not always replace the owner's own return. Each nonresident owner included on the PTE-C still has to file an Alabama return and report the Alabama-source income, unless that owner has no other Alabama-source income. A nonresident individual who wants the benefit of a partnership or S corporation loss has to establish it on his or her own Alabama return.

### How to fill out page 1 of Form PTE-C

Start in the upper right corner with CY, FY or SY for a calendar, fiscal or short year, and tick 52/53 Week as well if the entity has that election; a 52/53-week filer has to pick FY or SY with it. Block A in the image below holds the entity type, the amended and Federal Audit Change boxes, the FEIN, federal business code, name and address, and two counts: the total number of owners or shareholders and the number of nonresident owners included in this composite filing. Federal Audit Change is for an amendment caused by an IRS audit; Amended return is for any other reason.

| Line | Printed label | What goes in it |
| --- | --- | --- |
| 1 | Amount of tax due | Total from Schedule PTE-CK1, line 15, column (H) |
| 2 | Interest due | Interest under Code of Alabama § 40-1-44, only if paying after the original due date |
| 3 | Penalty due | Late-filing penalty, greater of 10% of net tax due or $50, plus late-payment penalty of 1% per month, maximum 25% |
| 4 | Total tax, interest, and penalty due | Lines 1 through 3 |
| 5a | Overpayment from 2024 | Overpayment shown on the 2024 PTE-C |
| 5b | Estimated, extension, and WNR-V tax payments | All estimated, extension and WNR-V payments made for 2025 |
| 5c | Composite payments / electing pass-through entity credits | Schedule CP-B, line 3; attach Schedule CP-B |
| 5d | Total of all payments/credits | Lines 5a through 5c |
| 6 | Amount to be remitted or (overpayment) | Line 4 minus line 5d; a negative figure is an overpayment |
| 7a | Overpayment to be credited to 2026 return | Part of the overpayment carried to next year |
| 7b | Overpayment amount to be refunded | Part of the overpayment paid back |

Line 5c is for a tiered structure: another S corporation, partnership, estate or trust paid composite tax or an electing pass-through entity credit on your entity's behalf. Schedule CP-B lists each payer by name and FEIN in columns A and B, the amount in column C, and has a column D checkbox when the amount came through a disregarded entity. The 2025 instructions say the Department now requires Schedule CP-B for these amounts.

The block marked S is the signature. An authorized officer of the entity signs, enters the date and his or her title, and can tick the box that lets the Department discuss the return with the preparer. That checkbox covers the preparer only; a broader appointment before the Department uses [Alabama Form 2848A, Power of Attorney and Declaration of Representative](/us/alabama-2848a/). A paid preparer who is not an employee completes the lower block with PTIN, firm name, EIN and phone number.

### Page 2 for partnerships and LLCs

Page 2, "Required Entity Information For Partnerships and LLCs", is completed when the filer is a partnership or LLC. It has five items: the general partners with their ownership percentages, the other states the entity operates in, a yes/no question on business in a foreign country with the country and the taxable income reported there, a yes/no question on investments in another pass-through entity with that entity's details, and a contact person with phone and email. A Qualified Investment Partnership does not attach its original QIP certification here; that certification goes with the QIP's annual Form 65.

### Schedule PTE-CK1: one row per nonresident owner

Schedule PTE-CK1 is page 3 of the PTE-C, and the instructions state that the return is incomplete without it. Page 3 has eleven rows; with more than eleven nonresident owners you add continuation pages (page 4 of the PDF), total them on each continuation page's line 13 and carry the sum to line 13 on page 3.

| Column | What to enter |
| --- | --- |
| (A) | Owner's name, street address, city, state and ZIP |
| (B) | Social Security number or FEIN |
| (C) | Entity type code: I individual, F trust or estate, P partnership/LTD/LLC/LLP, S S corporation, E exempt entity, C corporation, IRA, FGOV foreign government, DE disregarded entity |
| (D) | Percent ownership |
| (E) | Nonseparately stated income, separately stated income and guaranteed payments from the Alabama Schedule K-1, lines G through M; no separately stated deductions or expenses |
| (F) | Column (E) times 5% |
| (G) | Allocated Alabama Jobs Act investment credit from Schedule PTE-AJA, line 16 |
| (H) | Column (F) minus column (G) |
| (I) | Checked when the owner has certified exemption on Schedule NRC-Exempt |

Line 12 totals page 3, line 13 brings in the continuation pages, line 14 adds them for columns (E) through (G), and line 15 adds column (H) of lines 12 and 13. That line 15 figure is page 1, line 1.

The 5% is the maximum rate in Code of Alabama § 40-18-5 and applies to each owner's own distributive share. One owner's loss cannot reduce another owner's income, and a net operating loss carryforward cannot be used. An owner with a loss is left off the schedule unless the loss offsets that owner's guaranteed payments; Administrative Rule 810-3-24.2-.01 has the details. Income is allocated and apportioned under the Multistate Tax Compact rules in Chapter 27, Title 40.

Column (G) is used only when the nonresident member elected, and the entity was approved, to have its share of the Alabama Jobs Act investment credit included in the composite return. Schedule PTE-AJA is filled in separately for each such member: Part I takes the current-year project credits (lines 1a to 1g) and limits them to the owner's tax from column (F); Part II applies up to three prior-year carryforwards by project number. Line 16 goes to column (G). Unused credits carry forward for at most 5 years, and the instructions add that the allocation of this credit has to be submitted through My Alabama Taxes (MAT).

### Owners exempt through Schedule NRC-Exempt

Schedule NRC-Exempt, "Subchapter K Affidavit of Exemption by Nonresident", is completed by the nonresident member, returned to the entity before the original due date of the entity's return, and a copy is attached to the composite return and the entity's income tax return each year. It lists six categories:

- A real estate investment trust that is not a captive REIT; this election is made once, with copies of the original attached in later years.

- An exempt organization whose Alabama share does not produce unrelated business taxable income (annual election).

- An insurance company that pays Alabama premium tax and is not subject to Alabama income tax (annual election).

- A pre-approved tiered structure, which needs the Department's prior written approval with a copy attached every year; the signed form goes to the entity 30 days before the original due date.

- A member whose only Alabama-source income comes from a capital credit project expected to offset the whole liability (annual election).

- A C corporation in a loss position for the three most recent tax years that expects a loss for the current year (annual election).

For a tiered-structure approval, the pass-through entity sends the NRC-Exempt signed by the indirect owner together with Form PTE-R and Form NRA-R from the direct owner, 30 days before the original due date, with documents showing how much income flows to the indirect owner.

S corporations have a separate route. A nonresident shareholder can sign an agreement to file and pay its own Alabama tax and accept Alabama jurisdiction. The S corporation does not pay for a shareholder who certifies in writing, under penalty of perjury and before the original due date, that it has fully paid its tax on its Alabama share. If that shareholder does not pay, the S corporation has to pay within 60 days after the Department's notice and demand.

An entity that wants relief from the composite payment requirement files Form PTE-R at least 30 days before the original due date of the composite return; the Department decides case by case.

### What makes a PTE-C incomplete or costs an exemption

- Schedule PTE-CK1 missing: the instructions treat the return as incomplete.

- Schedule NRC-Exempt not attached for an owner checked in column (I): the entity has to pay that owner's composite tax as originally required.

- Column (G) filled in without Schedule PTE-AJA attached.

- Composite payments claimed on line 5c without Schedule CP-B.

- The PTE-C or its payment placed with Form 65 or Form 20S. Page 1 says in a black band that the return must be mailed separately.

- A check stapled or attached to the return or to Form PTE-V. The PTE-V instructions ask for the items loose in the envelope.

### Due dates, extension and penalties for 2025

The calendar-year 2025 return and the full payment were due March 15, 2026. Fiscal and short years are due on the 15th day of the third month after the tax period closes, moved to the next business day when that day is a Saturday, Sunday or state holiday. Alabama recognizes a federal extension, and the Department's FAQ says one extension covers both Form 20S and Form PTE-C. Calendar-year PTE-C returns have an extended due date of September 15, 2026. An extension does not extend the time to pay, so tax paid after March 15, 2026 carries interest and penalty on lines 2 and 3. Both dates have passed at this check.

The 2025 form covers calendar year 2025 or another tax year "beginning ___, 2025". The 2025 instructions, under Specific Instructions, say to file the 2025 return for a calendar, fiscal or short year "that begins in 2024", the same wording as the 2024 instructions. A fiscal-year entity should confirm with the Pass-Through Entity Section which form year applies before filing.

Alabama law does not require estimated payments. Voluntary estimates go with Form PTE-V, and a PTE-C no longer has to be sent with them.

An amended composite return asking for a refund can be filed up to the extended due date of the entity's return for that year. After that the entity cannot request a refund; the owner claims it on its own return: Form 40NR for an individual, 20C for a C corporation, 20S for an S corporation or 41 for a fiduciary. The Department's FAQ adds that an overpayment from the prior year's composite return can be transferred to an Electing Pass-Through Entity's account.

### Where to get the 2025 PTE-C and where to mail it

The [2025 Form PTE-C](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25fptec.pdf) is on the Department's forms page as "Nonresident Composite Payment Return", form year 2025, and the [2025 instructions for Form PTE-C and Schedule PTE-CK1](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25fptecpteck1_inst.pdf) are a separate three-page PDF. Mail the return to:

Alabama Department of Revenue, PTE-C
P.O. Box 327444
Montgomery, AL 36132-7444

Code of Alabama § 41-1-20 requires any single tax payment of $750 or more to be made electronically. The instructions name My Alabama Taxes (MAT) for this, and no voucher is needed with an electronic payment. A smaller payment by check or money order is payable to the Alabama Department of Revenue, with the FEIN, "Form PTE-C" and the tax year written on it, and goes with [Form PTE-V](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/fptev.pdf). On the voucher, the tax period is the last day of the entity's tax year, PTE-C is checked as the form type and Return, Amended, Estimate or Extension Payment as the payment type. PTE-V must be printed with its Print button so that the 2D barcode is created.

The Pass-Through Entity Section answers composite questions at (334) 242-1170, Option 6, including the rules for affordable rental housing developments and publicly traded partnerships.

### Questions about Form PTE-C

#### Does an electing pass-through entity still file Form PTE-C?

The Department's FAQ says the composite return is not required once the entity elects to be taxed as an Electing Pass-Through Entity. Without the election, partnerships make the composite payment under § 40-18-24.2.

#### Do I attach Form PTE-C to Form 65 or Form 20S?

The composite return is filed on its own and mailed separately from the entity's income tax return, and the payment for one return is not enclosed with the other.

#### Do nonresident owners still file their own Alabama return?

Each nonresident owner included on the PTE-C still files an Alabama return reporting the Alabama-source income, unless that owner has no other Alabama-source income.

### Official sources

- Alabama Department of Revenue, [Form PTE-C, Nonresident Composite Payment Return, 2025, with Schedules PTE-CK1, PTE-AJA and NRC-Exempt (4/23)](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25fptec.pdf)

- Alabama Department of Revenue, [Instructions for Form PTE-C and Schedule PTE-CK1, 2025](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25fptecpteck1_inst.pdf)

- Alabama Department of Revenue, [Forms: Nonresident Composite Payment Return (form year 2025)](https://www.revenue.alabama.gov/forms/nonresident-composite-payment-return-23/)

- Alabama Department of Revenue, [Form PTE-V, Pass Through Entity Payment Voucher](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/fptev.pdf)

- Alabama Department of Revenue, [Schedule CP-B, Composite Payments/Electing Pass-Through Entity Credits, 2025](https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25scheccpb.pdf)

- Alabama Department of Revenue FAQ, [What is the mailing address for Form PTE-C?](https://www.revenue.alabama.gov/faqs/what-is-the-mailing-address-for-form-pte-c/)

- Alabama Department of Revenue FAQ, [Is a separate extension required for Form 20S and Form PTE-C?](https://www.revenue.alabama.gov/faqs/is-a-separate-extension-required-for-form-20s-and-form-pte-c/)

- Alabama Department of Revenue FAQ, [Will an Electing Pass-Through Entity still be required to file a composite return?](https://www.revenue.alabama.gov/faqs/will-an-electing-pass-through-entity-still-be-required-to-file-a-composite-return-pte-c-on-behalf-of-nonresident-members/)

- Alabama Department of Revenue FAQ, [Can a taxpayer transfer an overpayment from a composite return to an Electing pass through entity's account?](https://www.revenue.alabama.gov/faqs/can-a-taxpayer-transfer-an-overpayment-from-a-composite-return-form-pte-c-to-an-electing-pass-through-entitys-account/)

- Alabama Department of Revenue, [Form 2848A, Power of Attorney and Declaration of Representative (Rev. 9/18)](https://www.revenue.alabama.gov/wp-content/uploads/2018/09/Form_2848A_rev918.pdf)