Alabama Payroll Tax and Registration Guide
Employers in the Yellow Hammer State: learn about Alabama payroll tax and registration here.
Are you an employer in Alabama? If so, here are rules and resources you can access regarding payroll taxes, unemployment reporting, withholding information, power of attorney rules, and more.
Alabama tax account registration information
Companies who pay employees in Alabama must register with the AL Department of Revenue for a Withholding Account Number and register with the AL Department of Labor for an Unemployment Compensation Account Number.
Department of Revenue withholding account number format: R999999999 or 0000999999
- Register online with the AL Department of Revenue to receive a Withholding Account Number within 5-7 days.
- Find a existing Withholding Account Number on Form A-1 or A-3, Employer’s Quarterly or Annual Return of Income Tax Filed.
Department of Labor unemployment compensation (UC) account number format: 9999999999
- Register online at the AL eGov site to receive a UC account number on completion of the application.
- Find an existing UC account number:
– On Form UC-CR-4 or UC-10R
– Online at the AL eGov site
Required payroll documentation for Alabama
Here’s what Alabama employers should know about withholding information, unemployment reporting, local income taxes, and more.
Withholding information
- Form A-1 (Employers Quarterly Return of Income Tax Withheld): This return is normally filed electronically. The data on return is useful to help balance Alabama income tax withholding and remittances.
Unemployment reporting
- Form UC CR-4 CR4A (Quarterly Contribution and Wage Report): This return is filed electronically. eFile is required by the state.
Power of Attorney rules
The AL Department of Labor requires power of attorney for employers who use payroll providers to deposit state taxes and file state returns. You can access the form here.
Local income taxes imposed
Alabama has 4 jurisdictions that impose local income taxes:
- Bessemer and Birmingham: 1%
- Gadsden: 2%
- Macon County: 1%
The tax is imposed on both residents and nonresidents who work in the above locations.
Alabama resources
- Department of Labor for unemployment taxes
- Department of Revenue for all withholding taxes
