If she was an employee, then she should have withheld Alabama state income tax with every payroll, just like FWH, SS and MCare. this would have created a liability by the corp, which would have been extinguished by the payments (think EFTPS only Alabama). If she did not w/h Alabama state income tax with each paycheck 1) she should start immediately**, and 2) you will have to treat these payments as loans to the shareholder, and put on the Balance Sheet as a receivable til she repays them.
**requires registering with state to get that withholding tax #
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