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Tax Credit Pre-Certification and Claims for Pass Through Entity
(Partnerships, S-Corporations, Fiduciary, and Disregarded Entities) Filers FAQ

 

What credits are required to be pre-certified through MAT?

All credits that require pre-certification must be submitted using your MAT Pass Through Entity and Fiduciary Accounts.  The credits that require pre-certification are:

Coal Credit

Full Employment Act of 2011

Veterans Employment Act- Employer Credit

Veterans Employment Act – Business Start-up Expense Credit

Qualified Irrigation System/Reservoir System Tax Credit

Alabama Accountability Act Credit – Scholarship Granting Organization (SGO) Portion *

2013 Alabama Historic Rehabilitation Tax Credit

Investment Tax Credit (Alabama Jobs Act) **

Alabama Small Business and Agribusiness Jobs Act Credit

Apprenticeship Tax Credit

2017 Alabama Historic Rehabilitation Tax Credit

Alabama Film Rebate

Income Tax Capital Credit ***

*Alabama Accountability Credit – SGO Portion – The process for making contributions to an SGO will be handled in the same manner as in previous years.  However, Pass Through Entities (partnerships, S-Corporations and disregarded entities) that pass an Alabama Accountability Act credit through to their members must complete the NEW pre-certification process through MAT after their contribution has been verified by the SGO.

**Investment Credit (Alabama Jobs Act) – The approval of this credit is managed through the Department of Commerce.  Once the Department of Commerce has approved the annual certification, the Alabama Department of Revenue will notify the investing company to complete an allocation schedule through MAT.  See https://revenue.alabama.gov/tax-incentives/major-tax-incentives/investment-credit/.

***Income Tax Capital Credit Project Entities must now submit the Annual Report Form AR-PTE through MAT under the tax period in which it will be utilized.  Once Form AR-PTE is approved, the Pass Through Entity is required to Submit a Credit Claim Request on MAT to pass the credit to their Member/Partners.  Please note the Credit Claim submission will not be processed until the Form AR-PTE has been submitted and approved by Alabama Department of Revenue’s Office of Economic Development. http:///major-tax-incentives/income-tax-capital

How do you claim credits that do not require pre-certification?

These credits will be subject to an approval process when the tax return is filed claiming the credit.  The following are credits that do not require pre-certification through MAT:

Dual Enrollment Credit

Enterprise Zone Credit

New Markets Credit

Port Credit

Taxes Paid to Foreign Country

Taxes Paid to another State

For additional information on any of these tax credits, please visit the Department of Revenue’s website at:   https://revenue.alabama.gov/tax-incentives/about/income-tax-incentives/.

How does a disregarded entity (without an income or excise tax filing requirement) pass a business credit that requires pre-certification through MAT to its owner?

A disregarded entity receiving a credit from a Pass Through Entity will itself be required to create a Pass Through Entity Account in MAT and follow the pre-certification process for claiming a tax credit.  These steps are necessary to ensure the Department’s records are updated to reflect the tax credit is available for the owner of the disregarded entity.  To setup a Business Account in MAT, click here https://myalabamataxes.alabama.gov/.  Select “Obtain a New Tax Account”, complete the registration questionnaire to setup a Pass Through Entity account.  Once this information is processed a MAT Online Registration card will be mailed to the address on file that will allow the disregarded entity the ability to setup a MAT User ID and Password.

How do you claim a tax credit that requires pre-certification using MAT?

  • Log into MAT with the User ID and Password.
  • Select the “Pass Through Entity” or “Fiduciary Tax” Account Type.
  • Under the “I Want To” column, select “Submit a credit claim.”
  • Enter the information requested for the credit claim: Credit Type, Filing Period, Credit Amount, Owner Information, and upload attachments (include documentation received to verify the authorization of the credit). Select “Next.”
  • Review the information entered in Step 4. Select “Previous” to edit the information or select “Submit” to send the credit claim through for review.

Tip for entering Owner Information:  Entities with numerous partners can select “Download Owner Information Spreadsheet” to enter owner information and percentage of ownership.  Once downloaded, save the file.  Then use the Import Tab to load the table in the credit claim.  For future claims you can modify the spreadsheet as needed (i.e. adding/deleting partners or changing ownership percentage). Notice to Fiduciary Filers: Any tax credits originating from an ownership interest in a Pass Through Entity (partnership, S-Corporation or disregarded entity) that flow through to a Fiduciary taxpayer will not need to be pre-certified by the Fiduciary tax filer unless the credit will flow through to the beneficiary or the Fiduciary is claiming the 2017 Alabama Historic Rehabilitation Tax Credit.

Who should you contact for assistance with the credit submission process and/or questions about Pass Through Entity tax credits?

Pass Through Entity filers (partnership, S-corporation, trusts and disregarded entities) needing assistance with the credit claim process and/or Pass Through Entity filers who have questions about available tax credits should call the Pass Through Entity Tax Section at (334) 242-1033.