Use the steps below to fill out the form and submit your quarterly estimated tax payments on time.
How to Fill Out Alabama Form 40ES
- Estimate your total Alabama income for the year: Include all wages, self-employment earnings, rental income, investment income, and any other taxable Alabama income.
- Subtract your deductions: Use Alabama itemized deductions or the standard deduction for your filing status. Also subtract personal exemptions and dependent exemptions.
- Find your estimated tax: Apply Alabama's income tax rates to your estimated taxable income. The 5% rate applies to income above $3,000 for single filers and above $6,000 for married filers.
- Subtract tax already withheld: Reduce your total by any Alabama income tax withheld from your wages or pension payments during the year.
- Divide the result by four: This gives you each quarterly payment amount. Pay the same amount each quarter unless your income changes significantly.
- Fill out the payment voucher: Write your name, address, Social Security Number (SSN), the tax year, and your payment amount on the voucher at the bottom of the form.
- Send your payment by the due date: Tear off the voucher and mail it with your check or money order to the Alabama Department of Revenue.
Quarterly Payment Due Dates
Each year, estimated tax payments are due on four dates. Missing a date or paying less than required may result in a penalty.
- First payment: April 15
- Second payment: June 15
- Third payment: September 15
- Fourth payment: January 15 of the next year
When any due date lands on a weekend or public holiday, the deadline moves to the next business day.
How to Avoid Underpayment Penalties
If you do not pay enough estimated tax each quarter, the Alabama Department of Revenue charges an underpayment penalty. You can avoid it in two ways:
- Pay at least 100% of last year's total Alabama tax in four equal payments, or
- Pay at least 90% of this year's expected Alabama tax by the end of the year.
Basing payments on last year's tax bill is the safest approach. It removes guesswork when your income fluctuates during the year. Self-employed workers with uneven income may benefit from the annualized income installment method, which adjusts each quarter based on actual earnings to that point.
Frequently Asked Questions About Form 40ES
Who must file Alabama Form 40ES?
You must file if your expected Alabama income tax will be more than $500 after subtracting withholding and any credits. This most often applies to self-employed workers, freelancers, rental property owners, and retirees with investment income.
What if my income changes during the year?
You can adjust your payments at any time. Recalculate your expected tax for the remaining quarters and update your payment amounts. Paying too little in an earlier quarter may still result in a partial penalty, even if you catch up later.
Can I pay Alabama estimated taxes online?
Yes. The Alabama Department of Revenue accepts online payments through its My Alabama Taxes (MAT) portal. You can also pay by mailing a check with the paper payment voucher included in the form.
Related Alabama Tax Forms on FormsPal
You may need these other Alabama tax forms when filing your state taxes:
- Alabama Form 40A – Short-form individual income tax return for Alabama residents
- IRS Form 1040-ES – Federal estimated tax payment worksheet for individuals
- Alabama Form A-1 – Employer's quarterly withholding tax reconciliation