Alaska R&D Tax Credits

State and Federal Credits Available

18% Rate

18% of apportioned federal R&D credit.

20-Year Carryforward

Carry back 1 yr, forward 20 yrs.

Nonrefundable

Offsets income tax; excess carries forward.

Corporate Focus

For C-corps & taxed entities.

The Alaska Research & Development (R&D) Tax Credit incentivizes innovation by allowing businesses to claim 18% of their apportioned federal R&D credit against Alaska corporate income tax liabilities, as provided under Alaska Statute (AS) 43.20.021 and administered by the Alaska Department of Revenue. This federal-based credit supports qualified research activities across the United States, with apportionment to Alaska using the state's corporate income tax apportionment factor, making it particularly valuable for energy, technology, and manufacturing sectors operating in the state.

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18% Rate

18% of apportioned federal R&D credit.

20-Year Carryforward

Carry back 1 yr, forward 20 yrs.

Nonrefundable

Offsets income tax; excess carries forward.

Corporate Focus

For C-corps & taxed entities.

Key Highlights

18% credit on the Alaska-apportioned portion of the federal R&D credit under IRC §41
Apportionment uses the Alaska corporate income tax factor (based on property, payroll, and sales)
Supports U.S.-based research, not limited to in-state activities
Claimed via Form 6390 attached to the state corporate return
No annual caps, but limited to eligible general business credits and corporate tax liability

Who Qualifies for the Alaska R&D Tax Credit

Eligibility mirrors federal standards under IRC §41, focusing on businesses with qualified research expenses (QREs) that demonstrate technological uncertainty and innovation. The credit applies to the portion of federal-qualified activities apportioned to Alaska. Businesses must have Alaska corporate income tax liability to claim it, as Alaska imposes no individual income tax.

Eligible Entities

C Corporation May claim both the regular and basic research credit
S Corporation Limited entity-level use; can pass credits to shareholders
Partnerships / LLCs Credits pass through to owners via Schedule K-1

Qualified Research Expenses (QREs)

How to Calculate the Alaska R&D Tax Credit

Alaska's credit is calculated as a fixed percentage of the federal R&D credit apportioned to the state, simplifying the process for multi-state businesses. No separate state base or incremental calculation is required—leverage your federal Form 6765 results.

Apportioned Federal Method

Compute your total federal R&D credit under IRC §41 (regular or alternative simplified method).
Apportion the federal credit to Alaska using the state's corporate income tax apportionment factor (based on property, payroll, and sales) × Federal credit = Apportioned federal credit.
Apply the state rate: 18% × Apportioned federal credit = Alaska R&D credit.

Base Calculation for Alaska R&D Tax Credit

Identify the total federal R&D credit amount for the tax year.
Compute the Alaska apportionment factor used for corporate income tax (typically a three-factor formula of property, payroll, and sales in Alaska vs. everywhere).
Apply as base amount (if no Alaska apportionment factor applies, base = $0).
Ensure U.S.-sourced federal credit only; exclude foreign or non-qualifying elements.

Example Calculation

Federal credit = $500K; Alaska apportionment factor = 20%; → Base = 20% × $500K = $100K If no Alaska factor: → Base =$0 (no state credit available)

Alaska credit = 18% × $100K =$18,000

This credit offsets Alaska corporate income tax dollar-for-dollar, with any unused portion carried back 1 year or forward 20 years.

Apportionment Factor Details

Based on the same three-factor formula (property, payroll, sales) used for Alaska corporate income tax apportionment.
Applies to eligible general business credits; certain federal credits (e.g., those functioning as tax reimbursements or refunds) are excluded.
If minimal Alaska presence, the factor may be low, but startups with federal credits can still apportion based on their formula.

Estimate Your Credits

Alaska-Specific Rules

Alaska's R&D credit emphasizes simplicity through federal alignment, with provisions tailored to support resource-intensive industries like oil and gas exploration.

High Effective Ratee

The 18% rate on apportioned federal credits supports significant claims in energy sectors. This structure rewards scaled operations without state-specific caps.

No Annual Cap

Alaska imposes no limits on credit usage or statewide allocations, allowing full offsets against corporate income tax liabilities each year, subject to eligibility.

U.S.-Wide Research Eligible

Qualified activities anywhere in the U.S. qualify if apportioned to Alaska via the corporate income tax factor, broadening access for multi-state firms beyond in-state projects.

Other Important Rules

Startup and Fixed Base Percentage Rules: Determined under the federal R&D credit in IRC §41 (e.g., 3% startup rate phasing to 16% over 10 years); Alaska does not add separate base calculations and simply applies 18% to the federal amount apportioned to Alaska.
Pass-Through Treatment: For S corps, partnerships, and LLCs, no entity-level corporate income tax applies; corporate owners taxed at the corporate level may claim apportioned credits.
Audit Guidelines: Maintain R&D credit documentation consistent with federal and Alaska statute of limitations, typically at least 3 to 6 years after filing, and longer if carryforwards are involved.

High Effective Ratee

The 18% rate on apportioned federal credits supports significant claims in energy sectors. This structure rewards scaled operations without state-specific caps.

No Annual Cap

Alaska imposes no limits on credit usage or statewide allocations, allowing full offsets against corporate income tax liabilities each year, subject to eligibility.

U.S.-Wide Research Eligible

Qualified activities anywhere in the U.S. qualify if apportioned to Alaska via the corporate income tax factor, broadening access for multi-state firms beyond in-state projects.

Other Important Rules

Startup and Fixed Base Percentage Rules: Determined under the federal R&D credit in IRC §41 (e.g., 3% startup rate phasing to 16% over 10 years); Alaska does not add separate base calculations and simply applies 18% to the federal amount apportioned to Alaska.
Pass-Through Treatment: For S corps, partnerships, and LLCs, no entity-level corporate income tax applies; corporate owners taxed at the corporate level may claim apportioned credits.
Audit Guidelines: Maintain R&D credit documentation consistent with federal and Alaska statute of limitations, typically at least 3 to 6 years after filing, and longer if carryforwards are involved.

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Alaska R&D Tax Credits Case Study

Real results from an Alaska energy exploration company

$27,000

total state R&D tax credits earned

40%

of wages qualified for credits

$1,027,000

total R&D tax credits earned (federal + state combined)

Frequent Asked Questions

What is the Alaska R&D tax credit?

The Alaska R&D tax credit is 18% of the federal R&D credit apportioned to Alaska under AS 43.20.021, offsetting corporate income tax for businesses with IRC §41-qualified activities.

What activities qualify for Alaska’s R&D tax credit?

Eligible activities include developing or improving products, processes, or software with technological uncertainty, such as energy-efficient drilling tech or software for resource mapping, meeting federal four-part test. Strike Tax identifies qualifying projects.

How much can my business save with Alaska’s R&D tax credit?

Savings depend on federal credit size and apportionment; for a $500,000 federal credit with 20% Alaska factor, expect $18,000 in state offsets, plus federal benefits. Use Strike Tax’s R&D Credit Calculator for estimates.

Are Alaska R&D tax credits refundable for small businesses?

No, credits are nonrefundable but carry forward up to 20 years (1-year carryback). Small businesses can leverage federal payroll tax offsets for added cash flow. Strike Tax maximizes benefits.

How do I apply for Alaska’s R&D tax credit?

File Form 6390 attached to your Alaska corporate income tax return (Form 6000 or Form 6100/6150 for oil and gas filers), including federal Form 6765. Ensure timely filing. Strike Tax simplifies documentation and compliance.

Can Alaska businesses claim both state and federal R&D credits?

Yes, the state credit stacks on top of the federal credit for the same apportioned QREs, amplifying savings. Strike Tax optimizes claims for both levels.

Why is Alaska’s R&D credit valuable for energy companies?

Energy firms benefit from high QREs in exploration and tech development, with 18% on apportioned credits and 20-year carryforward supporting long-term projects. Strike Tax tailors claims for resource industries.

What documentation is required for Alaska R&D credits?

Maintain federal-compliant records: project descriptions, employee time logs, expense invoices, and uncertainty memos. Retain at least 3 to 6 years consistent with statutes of limitations. Strike Tax ensures IRS-proof substantiation.

How does apportionment work for Alaska’s R&D credit?

Apportionment uses the corporate income tax factor (property, payroll, sales in Alaska vs. everywhere) applied to the federal credit. Strike Tax calculates precise factors for multi-state operations.

How can Strike Tax help Alaska businesses?

Strike Tax ensures federal-state alignment, maximizes apportioned credits, handles Form 6390 filing, and provides audit defense for Alaska R&D claims. Schedule a consultation today.

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Next Steps

Estimate Credits

Use our calculator to estimate your potential federal and state benefits.

Estimate your Credits

Speak to Expert

Schedule a consultation to structure your research activities for maximum credits.

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Official Resources

Alaska Department of Revenue — Federal-Based Credits Overview

Eligibility, apportionment, and filing guidance.

Form 6390 & Instructions

Alaska Federal-Based Credits form and detailed instructions.

AS 43.20.021

Statutory framework for the Alaska federal credit, including R&D provisions.