Are R&D Tax Credits Available in Alaska?
No. While companies located in Alaska may qualify for the Federal Research and Development (R&D) Tax Credit, Alaska no longer offers the credit at the state level at this time. However, 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. This credit provides a dollar-for-dollar offset against Alaska tax liabilities. See IRC § 38 for a complete list of federal-based credits eligible for the state credit. Here is a summary of the credit:
- If the taxpayer is taxable both inside and outside Alaska, the credit is calculated by apportioning the federal credits generated
- A taxpayer may not apply credits attributable to Alaska against Alaska alternative minimum tax or other taxes
- Unused federal-based credits may be carried back & forward as provided under the Internal Revenue Code (1 year up to 20 years, respectively).
- To claim the credit, a company must file Alaska Form 6390 – Alaska Federal-based Credits along with its state tax return.
Alaska R&D Tax Credit Case Study
An Anchorage company designs and manufactures components for the oil & gas industry. The company claims Federal R&D credits each year for the development activities of its engineers. This project involved a multi-year study.
The Company qualified for the federal R&D Tax Credit of $330,000 and an additional $59,010 of state R&D Tax Credit in Alaska.
|Year||Total QREs||Credit||Federal Credits||Alaska Credit|
Get More Information About the R&D Tax Credit
The R&D Tax Credit, first enacted in 1981, has been one of the most valuable credits leveraged by companies. Every year, the R&D credit yields billions of dollars in federal and state benefits to companies engaged in qualifying research. This credit provides much-needed cash to hire additional employees, increase R&D, expand facilities, and more. Thousands of companies take advantage of the credit across several industries. » Learn More
Qualified research activities are defined by the four-part test outlined below
Research and Development Tax Insights
Qualifying AI for the RD Tax Credit | KBKG Artificial intelligence (AI) has recently been a mainstay of news headlines worldwide, and for good reason. Publicly released AI tools now allow individuals and companies to generate images and text nearly indistinguishable from those created by humans. If you are a company or have a department … Read More
IRS Extends Transition Period for Perfecting R&D Tax Credit Claims Jonathan Tucker, Principal • Research & Development Tax Credit Services In this post, we discuss the recent IRS update as of October 30, 2023. The IRS has extended through January 10, 2025, the transition period for perfecting research credit refund claims prior to IRS’ final … Read More
The R&D Tax Credit – The Basics Nurturing and expanding a business in many industries often requires you to develop new technologies, systems, and products. This type of expansion and growth is not only vital to your business but the economy as a whole, which requires a significant degree of innovation to thrive. Innovation, however, … Read More
Reviving Michigan’s R&D Tax Credit Ever since Michigan moved from the Michigan Business Tax regime to the current Corporate Income Tax regime twelve years ago, Michigan taxpayers have not been afforded a state tax credit for their research and development expenditures. However, this may change in the coming weeks, as HB 5100 passed the Democrat-led … Read More
What Is the Difference Between Refundable and Non-Refundable Tax Credits? CPAs are well aware of the intricate tax landscape clients face. Tax credits are essential in reducing their tax liability and maximizing their financial well-being. Among the various credits available, it’s important to understand refundable and non-refundable tax credits. Examine the difference between a refundable … Read More
Proposed Changes to Form 6765: Enhancing R&D Tax Credits Thought Leadership by Kevin Zolriasatain | Principal, Research & Development Tax Credits Staying informed about regulatory updates is vital for tax professionals, especially when it comes to Research and Development (R&D) tax credits. The Internal Revenue Service (IRS) made a significant announcement on Friday, September 15th, unveiling … Read More
Kansas Issues New Notice to the Research and Development Tax Credits Thought Leadership by Jonathan Tucker, Principal – Research and Development Tax Credit Services As certified public accountants, staying abreast of changes in tax laws and regulations is crucial to best serve your clients. In this blog, we’ll dive into the recent amendments by House Bill … Read More
KBKG Tax Insight: IRS Releases Guidance on Section 174 R&E Expenses Monday, September 11, 2023 By Kevin Zolriasatain | Principal, Research & Development Tax Credits On Sept. 8, 2023, the Internal Revenue Service (IRS) unveiled Notice 2023-63. This significant and eagerly awaited update to tax regulations under Section 174 marks a pivotal moment in the realm … Read More
Wisconsin Department Revenue Updates Publication 131 – R&D Tax Credits Thought Leadership by Jonathan Tucker, Principal – Research and Development Tax Credit Services | KBKG Understanding tax incentives and research credits can often be as intricate as deciphering a complex puzzle. Fortunately, the Wisconsin Department of Revenue has developed the newly updated Publication 131, a … Read More
How Form 6765 Can Benefit Your Business Form 6765 is a document the Internal Revenue Service published as part of the tax code. The official name of the document is Credit for Increasing Research Activities. However, it is more informally called the R&D Tax Credit Form. It can be a valuable source of savings for your … Read More