The Alabama Department of Revenue requires all income received from sources both inside and outside Alabama be included on the Alabama return (and then the “Alabama only” wages be indicated if you are a part-year or nonresident).  The TaxACT program does this by transferring all wages from Box 16 of any W-2s in the return to the Alabama return. If you had a W-2 in your return which did not contain wages in Box 16 (i.e. for a state like Florida or Texas which do not have income tax), the program cannot transfer those wages since there is not an amount in Box 16 of the W-2 to transfer.

If, in these situations, the amount from Box 1 on the W-2 is entered in Box 16 (and the state name selected in Box 15 as an indicator where the wages came from) then the wages will transfer correctly to the Alabama return.

There is a Red Alert in the program which states A W-2 for (Company Name on W-2), has been transferred to the Alabama state return with no wages entered in Box 16. The Alabama Department of Revenue says that if you receive a W-2 with no entries in boxes 15 through 17, you should select the proper state code for the state and then enter the amount from box 1 as the amount in box 16. The state income tax withheld should be left blank in such a case. 

You can enter any of the following in the State ID No. field: (1) None, (2) Not Applicable, or (3) 000000001.

If you are a full-year resident of Alabama, following these instructions will transfer your income to the Alabama return.  If you are a part-year or nonresident of Alabama you will be prompted to indicate the “Alabama only” income either earned during the period of residence or earned from Alabama sources when you go through the Alabama Q&A.