Alaska R&D Tax Credit Summary

Although Alaska does not provide a Alaska state-specific R&D Tax credit based on qualified research expenses that mirror the Federal Research Tax credit, Alaska provides a state tax credit equal to eighteen percent (18%) of a company's federal-based credits, which includes the research and development tax credit. See 15 AAC 20.145. Credits adopted by reference.

 

Alaska also offer several other credits (see link).  See also IRC § 38 for a complete list of federal-based credits eligible for the state credit.

Alaska Credit (R&D) summary:

  • This credit provides a dollar-for-dollar offset against Alaska tax liabilities. Under IRC § 41, where a credit allowed under the Internal Revenue Code is also allowed in computing Alaska income tax, it is limited to 18% for corporations of the amount of credit determined for federal income tax purposes which is attributable to Alaska. This limitation does not apply to a special industrial incentive tax credit under AS 43.20.042

  • For purposes of calculating the federal tax payable on personal holding companies, the rate is 12.6%

  • For purposes of calculating the accumulated earnings tax, the rate is 4.95% of the first $100,000 of accumulated taxable income and 6.93% of accumulated taxable income in excess of $100,000

  • Qualified activities need not be conducted in Alaska to qualify, but must be conducted within the United States

  • The definition of qualified research expenses is the same as under IRC § 41.

  • Federal-based credits may offset Alaska alternative minimum tax (AMT) only after Alaska incentive credits are applied.

  • Unused federal-based credits may be carried back 1 year and forward for up to 20 years.

  • To claim the credit, a company must file Alaska Form 6390 – Alaska Federal-based Credits along with its state tax return.

Credit Claim Process:

A company must file Alaska Form 6390 – Alaska Federal-based Credits along with its state tax return. See also Alaska Form 6390 Instructions.

Refundable/Transferable Tax Credit: No

Carryover: Follows Fed. In general unused credits after carrying it back 1 year are carried forward to each of the 20 tax years after the year of the credit. See 26 U.S. Code § 39.Carryback and Carryforward of Unused Credits & IRS Instructions for Form 3800 (2018)

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