Alabama R&D Tax Credits

While Alabama doesn't have a statute specific to R&D, the Alabama Jobs Act provides incentives to qualified businesses for approved projects that create new jobs in the state, including those conducting space research.

Learn more about Alabama's Investment Credit here. 

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R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporation, S-Corporations, LLCs, Partnerships

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Deadline for Tax Filing:

Online Application

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Data Required to Compute Credit:

Qualified Capital Investment approved with a State Project Agreement

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What Information is needed?

Various - See Alabama's R&D Tax Credit Law Website here

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Credit Carryforward:

The annual credit is not refundable, but any unused credit associated with the annual credit can be carried forward for up to 5 years.

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The R&D tax credit equals:

• Tax credit of up to 1.5% annually of qualified capital investment for a qualified project, for a period of up to 10 years.
• The tax credit can be utilized against:  Income taxes, including estimated taxes; Financial institution excise tax; Insurance premiums tax; Utility taxes paid; or a combination of the above taxes for a period of 10 years.

Specific Items to Note:

• Only taxpayers that have been approved by the Alabama Department of Commerce for qualifying projects are eligible to claim the credit, as allowed by the executed State Project Agreement.
• Once the Alabama Department of Commerce certifies the annual Investment Credit, it must be claimed via the My Alabama Taxes ("MAT") website.