Updated September 4, 2026. Quick answer: Alabama requires its own state S-corp filing, Form 20S, in addition to the federal Form 2553. There is no extra Alabama dollar cost beyond that filing: the Business Privilege Tax an S-corp pays is identical, form for form, to what a plain LLC pays.
Does this state require its own election
Yes. Alabama’s Department of Revenue states directly that Alabama recognizes the federal election and directs S-corps to Form 20S.
“Does Alabama recognize the federal election to be treated as an S corporation? … Yes, use Form 20S.”
Alabama Department of Revenue, S-corporation FAQ
What it costs at the entity level
No. Alabama’s Business Privilege Tax applies identically to S-corps, LLCs and disregarded entities, all on Form PPT. Only C-corps and a short list of regulated entities (financial institutions, insurers, REITs) file the separate Form CPT, a C-versus-pass-through line, not an S-corp-versus-LLC one.
The comparison against a plain LLC
A Form 20S filer and a plain Alabama LLC land on the same Business Privilege Tax form and the same rate table. The only thing the S election changes here is a filing step, not a bill.
What this does not model
This page does not model what happens to an entity that elects federally but never files Form 20S; Alabama’s own FAQ was not explicit on that consequence and this session did not find a page that was.
No federal tax modelling is repeated here; see the federal S-corp election calculator for the payroll-tax and QBI mechanics this page assumes but does not recompute. No personal Alabama income tax on the pass-through income itself is modelled either.
Sources
Every figure on this page is read from the text quoted above, fetched directly from the state’s own site or code, as read on September 4, 2026.
| What it establishes | Source |
|---|---|
| Whether Alabama requires its own S-corp election | Alabama Department of Revenue, S-corporation FAQ |
General consumer information, not financial, tax or legal advice. State rules are as published by the cited source on September 4, 2026 and change; your own facts govern, and an S-corporation election is a decision to take with a tax professional who has seen your books.