Alabama § 40-18-24.5 - Refundable Credit for Certain Owners, Members, Partners, or Shareholders of Electing Pass-Through Entities.
Full text of Alabama Code of Alabama § 40-18-24.5 — Refundable Credit for Certain Owners, Members, Partners, or Shareholders of Electing Pass-Through Entities., with citation guidance and answers to common questions.
§ 40-18-24.5. Refundable Credit for Certain Owners, Members, Partners, or Shareholders of Electing Pass-Through Entities.
(a) Notwithstanding any other provision of Chapters 16 and 18 of this title to the contrary, for tax years beginning on or after January 1, 2021, any owner, member, partner, or shareholder of an electing pass-through entity shall report its pro rata or distributive share of the income of the entity in accordance with the provisions of Sections 40-16-4, 40-18-24, 40-18-26, 40-18-27, 40-18-28, 40-18-29, and 40-18-39, as applicable.
(b) The owner, member, partner, or shareholder of an electing pass-through entity reporting income in accordance with subsection (a) shall be entitled to a refundable credit in an amount equal to its pro rata or distributive share of the Alabama income tax paid by the electing pass-through entity with respect to the corresponding tax year.
(c) The Department of Revenue may waive any estimated tax penalties and interest assessments for the quarterly estimated tax payment due on April 15, 2021, which may otherwise be assessed for individual or pass-through entity taxpayers who are adversely impacted by the retroactive effective date of this section.
(d) Any provision of Chapters 16 or 18 of this title regarding the liability of an owner, member, partner, or shareholder of electing pass-through entity for tax imposed by Chapters 16 or 18 of this title on their pro rata or distributive share of an electing pass-through entity’s income that is in conflict with Act 2021-423 is hereby superseded.
(e) The Department of Revenue may adopt rules for the implementation and administration of Act 2021-423.
Source: official Alabama text · Last verified 2026-08-27
Frequently Asked Questions About Alabama § 40-18-24.5
What does Code of Alabama § 40-18-24.5 cover?
Section 40-18-24.5 ("Refundable Credit for Certain Owners, Members, Partners, or Shareholders of Electing Pass-Through Entities.") is part of the Code of Alabama, the codified statutory law of Alabama. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Alabama § 40-18-24.5?
A common citation format is "Code of Alabama § 40-18-24.5" (Alabama). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Alabama law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Alabama official source linked on this page or consult a licensed Alabama attorney.
How does Alabama § 40-18-24.5 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Alabama can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Alabama.