Alabama withholding taxes paid by corporation

[k06]

Where do I enter Alabama withholding taxes paid by corporation? I am filing federal Form 1120 and AL Form 20C?

[dd4vols]

Payment of 'withholding' taxes is not an expense nor revenue nor asset nor liability.  Just part of the payroll cycle. 

Now, pass-Thru entities, like S Corps, partnerships, etc, often pay COMPOSITE payments for shareholders/partners, and that flows thru to the K-1s for the shareholders/partners to claim on personal returns.

So, I'm still a little confused of what your question really pertains to.

[k06]

I have a client who started a C Corp last year and paid withholding taxes. I think she may have been attempting to make estimated payments like she did for federal, but the receipts say withholding taxes. The owner paid herself as an employee on a W2 and is the only employee. Does this not get reported anywhere on the federal (Form 1120) or state (AL Form 20C)? I did not see anywhere to put it, but wanted to make sure it does not need to be reported anywhere.  

[dd4vols]

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 #

[sjrcpa · Accepted solution]

It was deducted from gross wages and remitted to the state. You deduct Gross wages on the tax return. Gross wages covers all the withholding taxes. No additional entry or deduction. That would be double dipping.

[k06]

Thank you!

[k06]

Thank you! I was having a moment... this makes perfect sense!