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This article contains notes about the calculation and adjustments for Form 41.

• Alabama is a buildup state; a statement (Schedule C) is used to reconcile the differences from the federal amounts. Common differences such as tax deduction, US obligations, out-of-state munis, capital loss carryovers, or PAL carryovers calculate automatically. If you want to include additional adjustments or force different amounts, use the Schedule C section on the AL Gen screen.
• Deductions do not always match the federal deductions.
• Federal taxes paid are a deduction and the Expense allocation worksheets reflect this. Alabama requires that you take the deduction for federal taxes on an accrual basis, meaning it is based on the current year federal tax from Form 1041, Schedule G rather than the amount of estimates and balance due you paid or were refunded.
• State and local taxes are not deductible.
• Expenses that you allocate to exempt income (AL tax exempt and US Obligations) are deductible and calculate as an adjustment on the expense allocation worksheet.
• Alabama DOR does not recognize federal NOLs and will properly adjust out of the expense allocation.
• An AL NOL is not a deduction per se. The tax calculates on Form NOLF85A as an alternate tax method rather than including the NOL carryover as a deduction.
• Schedules C and F are state versions of the federal forms. While the functionality is the same as the federal, Onvio Tax recalculates these forms because Alabama has no passive loss limitations, and therefore no PAL carryovers. 
• Capital losses do not carry over. They are taken in the year they occur.
• The income from Form 41, Page 3 is the gross income on the expense allocation worksheet. The expenses that calculate from the worksheet report back to Form 41, Page 3. The ESBT worksheet will also use these amounts in the Total column and calculates the ESBT expenses on the worksheet. This allows all the income and expense amounts to flow through the return to the beneficiaries, etc.

Alabama overview (1041)