Instructions for Form 20C Schedule BC "Business Credits" - Alabama

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SCHEDULE
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business credits
INSTRUCTIONS
Use This Schedule to Compute Credits Available on the Corporate Income Tax Return (Form 20C)
If the corporation receives distributions from Schedule K-1
Walters or the Alabama Department of Revenue, P.O. Box 327430,
income generated from a Pass-Through Entity, and the taxpayer
Montgomery, AL 36132-7430, at (334) 242-1200.
B1. Enter the Certification Number assigned by the Department of
has a credit that may be claimed on the Form 20C from the Pass-
Education.
Through Entity, the taxpayer should enter the Allocable amount
B2 Enter the name of the employer/firm sponsoring the education
of the credit from the Schedule K-1 into the appropriate field on
program.
the Schedule BC and attach the Schedule K-1 to the return.
B3 Enter the name of the approved provider.
New Credits for 2017
B4 Mark the appropriate box to indicate whether all participants for
whom you are claiming a tax credit, were continuously em-
Alabama Small Business and Agribusiness Jobs Act. Act Num-
ployed by you for at least 16 weeks.
ber 2016-188 provides for a tax credit to Alabama small business em-
B5. If the box on line 4 is marked “yes”, mark the appropriate box
ployers that create new jobs and hire employees under certain
to indicate if employee(s) for whom you are claiming a tax
conditions. See Part P for more information.
credit work at least 24 hours each week.
Apprenticeship Tax Credit. Act Number 2016-314 provides for a
B6. If the box on line 4 and 5 is marked “yes” enter the total ex-
tax credit for employers that employ an apprentice. See Part Q for
penses available for credit.
more information.
B7. Multiply line B6 by 20% (.20). CREDIT ALLOWABLE
Section A – CURRENT YEAR TAX LIABILITY
Part C – Income Tax Credit
Enter tax due from Form 20C, page 1, line 15 here and on Section
Section 40-18-35 provides a credit for the income tax owed on the
C, Part A, Column 4.
income generated by or arising out of the project. The credit cannot ex-
Section B – CURRENT YEAR CREDITS
ceed the lesser of (1) tax due, or (2) the amount paid pursuant to the
financing agreement in the year for which tax is due, corresponding to
Part A – Alabama Enterprise Zone Credit
debt service on the project obligations. This incentive may be reduced
or suspended by the Industrial Development Authority if the company
Certain tax incentives are available to qualifying businesses that
fails to achieve the anticipated level of capital investment or employ-
locate or expand within a designated enterprise zone. These tax in-
ment. Attachments to support credit should include certificate/docu-
centives are available under the provisions of Section 41-23-24. Busi-
ment of approval, computation of income generated from project,
ness entities eligible for the tax credit must be approved by the
support for amount paid, and computation of credit.
Alabama Department of Economic and Community Affairs (ADECA).
C1. Enter the amount paid pursuant to the financing agreement,
Business entities eligible for the tax exemption must have entered into
corresponding to debt service on the project obligations.
a contract with the Governor of Alabama and ADECA and must also
CREDIT ALLOWABLE.
receive certification annually from ADECA. A taxpayer must compute
its income tax exemption under the provisions of its specific contract.
Part D – Coal Credit
For additional information on the Alabama Enterprise Zone Credit/
For the tax years beginning on and after January 1, 1995, every
Exemption, contact ADECA Community and Economic Development
corporation, whether a “subchapter S” corporation, as defined by the
Division, 401 Adams Avenue, P.O. Box 5690, Montgomery, AL 36103-
1995 Internal Revenue Code, or not, foreign or domestic, that is doing
5690, 334-242-5370. Questions pertaining to the application of the tax
business in Alabama, as a producer of coal mined in Alabama, shall
credit should be addressed to Alabama Department of Revenue, P.O.
be allowed a credit against the tax imposed by Section 40-18-2, in the
Box 327001, Montgomery, AL 36132-7001, 334-242-1175.
amount of one dollar ($1) per ton of increased production of coal over
The Certificate of Certification and computations must be attached
the previous year’s production of coal as set out herein below. Such
to Form 20C to claim the exemption.
tax credit shall be based on coal produced after January 1, 1995, pro-
A1. Enter the amount of the Alabama Enterprise Zone Credit
vided the coal was mined in Alabama as certified by the producer of
Available.
the coal.
Part B – Basic Skills Education Credit
The amount of the total credit in any one year shall be based on the
number of tons of Alabama coal produced by the corporation in the
Sections 40-18-135 through 40-18-139 provide a tax credit to em-
year which exceeds the number of tons of Alabama coal produced by
ployers who provide approved basic skills education programs to Ala-
the corporation in calendar year 1994. In the event a corporation did
bama resident employees. To qualify for the credit, (1) the program
not produce Alabama coal during calendar year 1994, such corpora-
must have written approval from the Alabama Department of Educa-
tion must establish a base year by producing Alabama coal for 12 con-
tion, (2) the employees shall have been continuously employed for at
secutive months. Thereafter, such corporation shall be eligible for the
least 16 weeks for at least 24 hours per week, and (3) the employer
tax credit as specified herein above over the base year production.
cannot receive or require reimbursement or any form of remuneration
(Acts 1995, No. 95-239, p. 403, §1.)
for any cost of education. The credit is 20 percent of the actual costs
D1. Enter the number of coal produced in 2017.
limited to the employer’s income tax liability. A copy of the document
D2. Enter the number of tons of coal produced in calendar year
of approval along with a detailed schedule (including actual costs in-
1994 or base year chosen.
curred and employee employment period) computing the credit should
D3. Subtract line D2 from line D1.
be provided. For further information, contact the Alabama Community
College System, Adult Education Program, Workplace Education Tax
D4. Multiply line D3 by $1, if greater than zero. CREDIT
Credit, 135 South Union Street, Montgomery, AL 36104, Attn: David
ALLOWABLE.
1
SCHEDULE
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P
nstructIons
or
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reParatIon oF
2 17
a
D
r
BC
labama
ePartment oF
evenue
business credits
INSTRUCTIONS
Use This Schedule to Compute Credits Available on the Corporate Income Tax Return (Form 20C)
If the corporation receives distributions from Schedule K-1
Walters or the Alabama Department of Revenue, P.O. Box 327430,
income generated from a Pass-Through Entity, and the taxpayer
Montgomery, AL 36132-7430, at (334) 242-1200.
B1. Enter the Certification Number assigned by the Department of
has a credit that may be claimed on the Form 20C from the Pass-
Education.
Through Entity, the taxpayer should enter the Allocable amount
B2 Enter the name of the employer/firm sponsoring the education
of the credit from the Schedule K-1 into the appropriate field on
program.
the Schedule BC and attach the Schedule K-1 to the return.
B3 Enter the name of the approved provider.
New Credits for 2017
B4 Mark the appropriate box to indicate whether all participants for
whom you are claiming a tax credit, were continuously em-
Alabama Small Business and Agribusiness Jobs Act. Act Num-
ployed by you for at least 16 weeks.
ber 2016-188 provides for a tax credit to Alabama small business em-
B5. If the box on line 4 is marked “yes”, mark the appropriate box
ployers that create new jobs and hire employees under certain
to indicate if employee(s) for whom you are claiming a tax
conditions. See Part P for more information.
credit work at least 24 hours each week.
Apprenticeship Tax Credit. Act Number 2016-314 provides for a
B6. If the box on line 4 and 5 is marked “yes” enter the total ex-
tax credit for employers that employ an apprentice. See Part Q for
penses available for credit.
more information.
B7. Multiply line B6 by 20% (.20). CREDIT ALLOWABLE
Section A – CURRENT YEAR TAX LIABILITY
Part C – Income Tax Credit
Enter tax due from Form 20C, page 1, line 15 here and on Section
Section 40-18-35 provides a credit for the income tax owed on the
C, Part A, Column 4.
income generated by or arising out of the project. The credit cannot ex-
Section B – CURRENT YEAR CREDITS
ceed the lesser of (1) tax due, or (2) the amount paid pursuant to the
financing agreement in the year for which tax is due, corresponding to
Part A – Alabama Enterprise Zone Credit
debt service on the project obligations. This incentive may be reduced
or suspended by the Industrial Development Authority if the company
Certain tax incentives are available to qualifying businesses that
fails to achieve the anticipated level of capital investment or employ-
locate or expand within a designated enterprise zone. These tax in-
ment. Attachments to support credit should include certificate/docu-
centives are available under the provisions of Section 41-23-24. Busi-
ment of approval, computation of income generated from project,
ness entities eligible for the tax credit must be approved by the
support for amount paid, and computation of credit.
Alabama Department of Economic and Community Affairs (ADECA).
C1. Enter the amount paid pursuant to the financing agreement,
Business entities eligible for the tax exemption must have entered into
corresponding to debt service on the project obligations.
a contract with the Governor of Alabama and ADECA and must also
CREDIT ALLOWABLE.
receive certification annually from ADECA. A taxpayer must compute
its income tax exemption under the provisions of its specific contract.
Part D – Coal Credit
For additional information on the Alabama Enterprise Zone Credit/
For the tax years beginning on and after January 1, 1995, every
Exemption, contact ADECA Community and Economic Development
corporation, whether a “subchapter S” corporation, as defined by the
Division, 401 Adams Avenue, P.O. Box 5690, Montgomery, AL 36103-
1995 Internal Revenue Code, or not, foreign or domestic, that is doing
5690, 334-242-5370. Questions pertaining to the application of the tax
business in Alabama, as a producer of coal mined in Alabama, shall
credit should be addressed to Alabama Department of Revenue, P.O.
be allowed a credit against the tax imposed by Section 40-18-2, in the
Box 327001, Montgomery, AL 36132-7001, 334-242-1175.
amount of one dollar ($1) per ton of increased production of coal over
The Certificate of Certification and computations must be attached
the previous year’s production of coal as set out herein below. Such
to Form 20C to claim the exemption.
tax credit shall be based on coal produced after January 1, 1995, pro-
A1. Enter the amount of the Alabama Enterprise Zone Credit
vided the coal was mined in Alabama as certified by the producer of
Available.
the coal.
Part B – Basic Skills Education Credit
The amount of the total credit in any one year shall be based on the
number of tons of Alabama coal produced by the corporation in the
Sections 40-18-135 through 40-18-139 provide a tax credit to em-
year which exceeds the number of tons of Alabama coal produced by
ployers who provide approved basic skills education programs to Ala-
the corporation in calendar year 1994. In the event a corporation did
bama resident employees. To qualify for the credit, (1) the program
not produce Alabama coal during calendar year 1994, such corpora-
must have written approval from the Alabama Department of Educa-
tion must establish a base year by producing Alabama coal for 12 con-
tion, (2) the employees shall have been continuously employed for at
secutive months. Thereafter, such corporation shall be eligible for the
least 16 weeks for at least 24 hours per week, and (3) the employer
tax credit as specified herein above over the base year production.
cannot receive or require reimbursement or any form of remuneration
(Acts 1995, No. 95-239, p. 403, §1.)
for any cost of education. The credit is 20 percent of the actual costs
D1. Enter the number of coal produced in 2017.
limited to the employer’s income tax liability. A copy of the document
D2. Enter the number of tons of coal produced in calendar year
of approval along with a detailed schedule (including actual costs in-
1994 or base year chosen.
curred and employee employment period) computing the credit should
D3. Subtract line D2 from line D1.
be provided. For further information, contact the Alabama Community
College System, Adult Education Program, Workplace Education Tax
D4. Multiply line D3 by $1, if greater than zero. CREDIT
Credit, 135 South Union Street, Montgomery, AL 36104, Attn: David
ALLOWABLE.
1
Part E – Full Employment Act of 2011 Credit
credit is only applicable for businesses: started after April 2, 2012, lo-
cated within Alabama, and showing a net profit of at least $3,000 for
Sections 40-18-290 through 40-18-293 provide for a tax credit
the year in which the credit is taken.
against Alabama income tax for small businesses which employ 50 or
H1. Enter the name of the Business.
fewer employees and create new jobs paying more than ten dollars
H2. Enter the business ID number.
($10) per hour. Employers will receive an income tax credit equal to
H3. Enter the total amount of business start-up expenses.
one thousand dollars ($1,000) and shall be available in the tax year
H5. Enter the lesser of line H3 or line H4. CREDIT ALLOWABLE.
during which the employee has completed 12 months of consecutive
employment. The employer must have a net increase in the total num-
Part I – Qualified Irrigation System/
ber of full time employees in Alabama on the last date of each tax year
Reservoir System Credit
during which employees are hired for which the employer claims a
Section 40-18-342 provides an income tax credit to any agricultural
credit, over the number employed in Alabama as of the last day of the
trade or business for the cost associated with the purchase, installa-
tax year immediately preceding the first employment year. The income
tion or conversion related to irrigation systems or the development of
tax credit may be claimed for employees who are hired following June
irrigation reservoirs and water wells. The credit is equal to 20 percent
9, 2011. This tax credit shall not exceed the amount of the taxpayer’s
of the cost of the purchase and installation of any qualified irrigation
state tax liability for which the credit is claimed. This credit is not re-
equipment and any conversion costs related to the conversion of irri-
fundable or transferable and cannot be taken in conjunction with the
gation equipment from fuel to electricity or qualified reservoirs. This
Alabama Small Business and Agribusiness Jobs Credit.
credit is limited to only one purchase and installation of qualified irri-
E1. Enter the number of full time employees on 12-31-2016.
gation equipment or one qualified reservoir per taxpayer. The credit
E2. Enter the number of full time employees on 12-31-2015.
shall not exceed $10,000 and shall not exceed the income tax liability
E3. Subtract line E2 from line E1.
in any year. Such credit shall be taken in the year in which the quali-
E4. Enter the number of qualifying employees included in the num-
fied irrigation equipment or the qualified reservoir is placed in service.
ber on E3 that completed their first 12 months of service in
The credit may be carried forward for 5 years.
2017.
I1. Enter the purchase and installation costs of the irrigation
E5. Multiply line E4 by 1,000. Enter the amount.
system.
Part F – Alabama New Markets Development Credit
I2. Enter the cost of conversion from fuel to electricity.
Act Number 2012-483, passed by the Alabama Legislature during
I3. Add lines I1 and I2.
the 2012 Regular Session, establishes a tax credit to corporations that
I4. Multiply line I3 by 20% (.20).
invest in businesses located in impoverished and low income com-
I5. Enter the cost of construction reservoir.
munities. The credit allowance date is the date on which such invest-
I6. Multiply line I5 by 20% (.20).
ment is initially made and each of the six anniversary dates thereafter.
I7. Enter the amount from either line I4 or line I6.
The credit shall not exceed the amount of the taxpayer’s state tax lia-
I9. Enter the lesser of line I7 or line I8. CREDIT ALLOWABLE.
bility for the tax year for which the tax credit is claimed. Tax credits
Part J – Alabama Accountability Credit
claimed under this act are not saleable or transferable. Any amount of
tax credit that the taxpayer is prohibited from claiming in a taxable year
The Alabama Legislature passed Act Number 2013-64 during the
may be carried forward to any of the taxpayer’s subsequent taxable
2013 Regular Session. The act authorizes a tax credit for contribu-
years.
tions to corporations that provide educational scholarships to qualify-
F1. Enter the amount of the New Markets Development Credit
ing schools. The credit is equal to 100% of the total contributions made
claimed from the Notice of Certification.
to a scholarship granting organization for educational scholarships
Part G – Heroes for Hire Tax Credit Act of 2012
during the taxable year for which the credit is claimed up to 50% of the
Employee Credit
tax liability of the taxpayer. The credit may be carried forward for 3
years.
Sections 40-18-321 and 40-18-322 provides qualified employers
J1. Enter the name of the Scholarship Granting Organization.
an additional credit against the Alabama income tax liability in the
J2. Enter the full address of the Scholarship Granting Organiza-
amount of $1,000 for hiring full time recently deployed and now dis-
tion.
charged unemployed veterans. The new hire must be 1) a resident of
J3. CREDIT AVAILABLE. Enter the amount of contribution made
Alabama at the time of entry into military service or mobilized to active,
to the Scholarship Granting Organization.
federal military service while a member of the Alabama National Guard
J4. Multiply the current tax liability (Section A) by 50% (.50).
or other reserve unit located in Alabama; 2) received an honorable or
J5. Enter the lesser of line J3 or line J4. CREDIT ALLOWABLE.
general discharge from active, federal military service within the two-
year period preceding the date of hire; and 3) has certification by the
Part K – Rehabilitation, Preservation and
Department of Labor at the time of hire by either collecting or being el-
Development of Historic Structures Credit
igible to collect unemployment benefits or having exhausted his or her
Act 2014-452 amends Act 2013-241. The act provides an income
unemployment benefits.
tax credit against the tax liability of the taxpayer for the rehabilitation,
G1. Enter the number of recently deployed unemployed veterans
preservation, and development of historic structures. The credit is
included in Part E, line E4 – Full Employment Credit or in-
equal to 25% of the qualified rehabilitation expenditures for certified
cluded in Part P, line P7 – Alabama Small Business and
historic structures. The act also provides a tax credit equal to 10% of
Agribusiness Jobs Credit.
the qualified rehabilitation expenditures for qualified pre-1936 non-his-
G2. Multiply line G1 by 1,000. Enter the amount.
toric structures. No tax credit claimed for any certified rehabilitation
Part H – Heroes for Hire Tax Credit Act of 2012
may exceed $5,000,000 for all allowable property types except a cer-
Business Start-Up Expense Credit
tified historic residential structure and $50,000 for a certified historic
Section 40-18-323 allows for a nonrefundable credit against the in-
residential structure. The entire credit may be claimed by the taxpayer
come tax liability to recently deployed unemployed veterans in an
in the taxable year in which the certified rehabilitation is placed in serv-
amount up to $2,000 for expenses associated with one start-up busi-
ice. This credit is not refundable, but any unused portion of the credit
ness in which the veteran holds at least 50% ownership interest. The
may be carried forward for up to 10 additional tax years.
2
Part O – Growing Alabama Credit
K1. Enter the amount of the Rehabilitation, Preservation and De-
velopment of Historic Structures Credit from the Alabama His-
Act Number 2016-102 and Section 40-18-413 authorize a tax credit
torical
Commission
Tax
Credit
Certificate.
CREDIT
to corporations that make cash contributions to local economic de-
ALLOW ABLE.
velopment organizations approved by the Renewal of Alabama Com-
Part L – Dual Enrollment Credit
mission. The credit is the amount of the cash contribution made not to
exceed 50% of the corporation’s income tax liability for the current
Act 2014-147 passed the Alabama Legislature during the 2014
year. The corporation’s cash contribution cannot exceed the amounts
Regular Session. The act provides a state income tax credit to busi-
approved by the commission. This credit is nontransferable and may
nesses that make contributions for qualifying educational expenses
be carried forward for up to five years.
directly associated with the Career-Technical Dual Enrollment Pro-
O1. Enter the name of the Local Economic Development Organi
gram. The tax credit may be claimed by the taxpayer in an amount
zation Approved by the Alabama Renewal Commission.
equal to 50 percent (50%) of the total contribution or contributions
O2. Enter the address of the Local Economic Development Or
made to the Department of Postsecondary Education during the tax-
ganization.
able year for which the credit is claimed, but such credit is not to ex-
O3. CREDIT AVAILABLE. Enter the total amount contributed for
ceed an amount greater than 50 percent (50%) of the taxpayer’s total
development. Enter here and on Section C, Part O, Column 2.
Alabama income tax liability, and in no case more than five hundred
O4. Multiply the current tax liability (Section A) by 50% (.50).
thousand dollars ($500,000) for any given tax year. A taxpayer may
O5. Enter the lesser of line O3 and line O4. CREDIT ALLOWABLE.
carry forward all or part of a tax credit granted under this act for up to
Part P – Alabama Small Business and
three (3) years.
Agribusiness Jobs Credit
L1. Enter amount from the Department of Postsecondary Educa-
tion Tax Certificate.
Act Number 2016-188 passed the Alabama Legislature during the
L2. Multiply line L1 by 50% (.50)
2016 Regular Session. This act provides for a tax credit to Alabama
L3. Multiply the current tax liability (Section A) by 50% (.50).
small business employers that create new jobs and hire employees
L4. Maximum Credit.
under certain conditions. The tax credit allowable is a one-time credit
L4a. CREDIT AVAILABLE. Enter the lesser of L2 or L3 here and on
to $1,500 for each qualified new employee and is only applicable to a
Section C, Part L, Column 2.
tax year in which the new employee has completed 12 months of con-
L5. Enter the lesser of line L2, or line L3 or line L4. CREDIT
secutive full-time employment with the employer. In order to qualify
ALLOWABLE.
for the credit, the business must have 75 or fewer full time and part
Part M – Alabama Jobs Act (Investment Credit)
time employees and must show a “Net Employee Growth” as defined
in the act. This credit is nontransferable and nonrefundable, but any
Act Number 2015-27 and Section 40-18-376 provide for an in-
unused portion of the credit may be carried forward for up to three
vestment credit to certain businesses for approved projects that cre-
years. This credit cannot be taken in conjunction with the Full Em-
ate new jobs in Alabama. The credit is an amount of 1.5 percent of a
ployment Credit.
qualified capital investment annually, for a period of 10 years to be
P1. Mark the appropriate box to indicate whether your business
applied against the income tax, estimated income taxes, the financial
had 75 or fewer full-time and part-time employees during the
institution excise tax, or the insurance premium tax, with additional
current tax year.
offsets of utility gross receipts and utility service use taxes. The in-
P2. Enter the number of full time employees on 12-31-2017.
vestment credit, provided for by the Alabama Jobs Act, may be
P3. Enter the number of full time employees on 07-24-2016.
claimed as a credit against taxes paid with a carryforward for earned
P4. Subtract line P3 from line P2 to determine the Net Employee
but unused amounts to the extent allowed in the project agreement.
Growth for the current year.
Any unused portion of this credit may be carried forward for up to five
P5. Enter the number of qualifying new employees for whom you
years.
have previously claimed a credit in prior tax year(s).
M1a-M1c. Enter the Project Name(s) and the amount of the credit
P6. Subtract line P5 from line P4.
claimed from the certification issued by the Alabama Depart-
P7. Enter the number of qualifying new employees from line P6
ment of Commerce.
that completed their first 12 consecutive months of service in
M2. Enter the sum of all project credits.
2017.
M3. Enter the amount of investment credit used to offset utility
P8. Multiply line P7 by $1,500. Enter the amount. CREDIT
taxes.
ALLOWABLE.
M4. Subtract line M3 from line M2. CREDIT ALLOWABLE.
Part Q – Apprenticeship Tax Credit
Part N – Port Credit
Act Number 2016-314 passed the Alabama Legislature during the
Act Number 2016-102 and Section 40-18-403 establish a tax credit
2016 Regular Session. This act provides for a tax credit for employ-
for corporations that utilize Alabama’s port facilities. The port credit al-
ers that employ an apprentice. Eligible employers that employ an ap-
lowable is an amount equal to $50 per TEU, $3 per net ton, or $0.04
prentice for at least seven full months of the prior taxable year are
per kilogram for air freight, multiplied by the port user’s cargo volume
allowed a credit equal up to $1,000 for each apprentice employed, not
in the 12 month period (for which the Renewal of Alabama Commis-
to exceed five apprentices employed. This credit is nontransferable,
sion has granted approval for the port user to claim the credit) minus
nonrefundable, and not available for an individual apprentice for more
the port user’s base cargo volume. To qualify, the port user must ship
than four taxable years.
more than 10 TEUs, more than 75 net tons, or more than 15,000 kilo-
Q1. Enter the amount from the Apprenticeship Tax Credit Certifi-
grams for air cargo. Also, the port user must ship more than 105 per-
cate issued by the Workforce Development Division of the De-
cent of its cargo volume in the 12 month period preceding the
partment of Commerce.
submission of the port credit application to the commission. This credit
Part R – Capital Docks/Capital Credit
is nonrefundable, but any unused portion of the credit may be carried
forward for up to five years.
Sections 40-18-240 through 40-18-250 provide for a tax credit
N1. Enter the amount of the Port Credit approved by the Alabama
against Alabama income tax liability with respect to income generated
Renewal Commission.
by or arising out of a qualifying project undertaken by certain existing
3
businesses and certain new businesses to be located in the state.
the remaining tax due.
Written approval by the Governor, Finance Director, and Alabama
Column 6.  Subtract Column 5 amount from Column 4 amount.
State Port Authority is required, and a written statement of intent must
Column 7.  Subtract Column 5 amount from Column 3 amount.
be filed with the Alabama Department of Revenue prior to the project
Column 8.  For applicable credits, subtract Column 3 amount from
being placed in service. For further information regarding the capital
Column 2 amount and add the difference to Column 7
docks credit, contact the Alabama Department of Revenue at P.O. Box
amount.
327001, Montgomery, AL 36132-7001 or 334-242-1175.
Section D – Credit Carry Forward Prior Years
Sections 40-18-190 through 40-18-203 provide for a tax credit
against Alabama income tax with respect to income generated by or
Lines 1 through 10.  For each carryforward available for utilization,
arising out of a qualifying project undertaken by certain existing busi-
repeat the steps on each line by column until all available prior year
nesses and certain new businesses to be located in the state. A state-
credit carry forward credits have been used or no tax remains to be
ment of intent to invest in a qualifying project must be filed prior to the
offset.
qualifying project being placed in service and must be approved by
Begin Credit Carry Forward from Prior Years with the oldest year
the Alabama Department of Revenue prior to the project entity taking
first and ending with the most current year. Tax years for which a credit
the credit. The credit allowable is 5 percent of the qualifying project’s
was utilized should not be listed. The utilized credits are shown in col-
allowable capital costs for each year up to 20 years, limited to the tax
umn 4.
liability generated by or arising out of the qualifying project, and is ap-
Column 1.  Enter the Type of Credit generated
plied after all deductions, exemptions and other credits have been
Column 2.  Enter the tax year end (MM/DD/YYYY) in which the
taken.
credit was generated.
As the project entity, the C corporation is required to complete and
attach Form AR and Form K-RCC with the Form 20C return to be el-
Column 3.  Enter the amount of the credit generated by the corpo-
igible to receive the capital credit. If the C corporation is a member or
ration for the tax period in Column 2.
partner of an investing company that has a qualifying project, the C
Column 4.  Enter the amount of the credit utilized in years prior for
corporation must complete and attach Form K-RCC with Form 20C. If
the Credit listed in Column 3.
a capital credit is claimed on Form 20C, the project number(s) should
Column 5.  Subtract Column 4 amount from Column 3 amount.
by entered in the space provided on Schedule BC, Part R, lines R1a-
Enter the amount of the Credit available to be utilized
R1g.
in the current tax period, not to exceed the remaining
For further information regarding the capital credit and the neces-
tax to be offset.
sary forms to claim the capital credit, visit the Alabama Department of
Columns 6-8. Subtract the Remaining Tax to be Offset (Section C,
Revenue’s Web site at www.revenue.alabama.gov under the Tax In-
Column 6) from the Amount Available to use this Period (Section D,
centives page, or contact the Department at P.O. Box 327001, Mont-
Column 5). If the Remaining Tax to be Offset is less than or equal to
gomery, AL 36132-7001 or 334-242-1175.
the Amount Available to use this Period, enter the Remaining Tax to
R1a-R1g.  Enter the Project Number(s) assigned by the Alabama
be Offset in Column 6 and enter the excess of the Amount Available
Department of Revenue, the Project Name(s) and the amount
to use this Period in Column 7. If the Remaining Tax to be Offset is
of the Capital Credit claimed from Schedule K-RCC, line 7.
greater than Section D, Column 5, enter the Amount Available to use
R2. Total Capital Credit. Enter the sum of all project credits.
this Period in Column 6 and enter the difference of the Remaining Tax
CREDIT ALLOWABLE.
to be Offset and the Amount used this Period in Column 8, then pro-
Section C – Current Credit Summary
ceed to the next available prior year credit. For the remaining rows, the
Amount used this Period in Column 6 is limited to the Remaining Tax
Part A through Part R. For each credit available for utilization, re-
to be Offset in Column 8 of the preceding row.
peat the steps on each line by row until all available current year cred-
Section E – Total Credits
its have been used or no tax remains to be offset.
Column 1.  Type of Credit generated
Line 1.  Enter the Total Current Credit from Section C, Column 5.
Column 2.  For applicable credits, enter the Credit Available from
Line 2.  Enter the Total Prior Year Credit Carryforward from Sec-
Section B.
tion D, Column 6.
Column 3.  Enter the amount of credit allowable generated by the
Line 3.  Add lines 1 and 2. Enter total here and on Form 20C, page
corporation from Section B.
1, line 16f.
Column 4.  Enter the amount of the remaining tax to be offset.
Column 5.  Enter the amount of the current credit utilized to offset
4
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