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.
More IRS forms and schedules, read line by line: Form 2553 instructions and Form 8832 instructions.
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.
Figures verified against the Alabama Department of Revenue S-corporation FAQ and its Business Privilege Tax FAQ and 2026 quick-reference guide on September 30, 2026; the Form 20S filing deadline, the Alabama pass-through entity tax election and the consequence of not filing Form 20S were not re-checked.
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.