Reject code AL40-RS-200 occurs when Schedule RS, Part 2 is missing required information based on the State Code (Column F). Specifically:
If StateCode (Column F) = "AL" (Alabama), then both StateID (Column G) and AlabamaWithheld (Column H) must be populated.
If StateCode (Column F) = "OS" (Out-of-State), then StateID (Column G) and AlabamaWithheld (Column H) must be left blank.
Understanding the Error
The IRS and state tax agencies require proper documentation of state tax withholding. If the withholding data is incomplete or does not follow the correct format, the return will be rejected with error code AL40-RS-200.
How to Fix Reject Code AL40-RS-200
To resolve this issue, follow these steps:
Step 1: Verify State Code (Column F)
Check the value in Column F (StateCode) of Schedule RS, Part 2.
If the state code is "AL", ensure that Column G (StateID) and Column H (AlabamaWithheld) are properly filled in.
If the state code is "OS", make sure both Column G and Column H are left blank.
Step 2: Update Missing or Incorrect Fields
If Column F is "AL" and Columns G or H are missing, enter the correct State ID and Alabama tax withheld amount.
If Column F is "OS" and Columns G or H contain data, remove the entries from these fields.
Step 3: Save and Submit the Diagnostics
Run Diagnostics in TaxWise to verify the correction.
Ensure no other errors appear.
Save the return and resubmit for e-filing.
Best Practices to Avoid Future Rejections
Review state withholding data before submitting returns to ensure required fields are completed correctly.
Double-check state codes to ensure the correct fields are populated based on the state listed.
Use tax software validation tools to catch errors before submission.
Ensure accuracy in taxpayer information when inputting State IDs and withholding amounts.
By following these steps, you can successfully resolve reject code AL40-RS-200 and avoid future rejections related to Schedule RS formatting errors.