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Tax Credit Pre-Certification and Claims for Individual Income Tax Filers FAQ

 

Taxpayers claiming certain credits must now apply through My Alabama Taxes (MAT) and receive approval before claiming the credit on their individual income tax return. If the credit claimed on an individual income tax return is from a Schedule K-1 issued by a pass through entity, the credit claim will be submitted by the entity and no action is required by the individual.
 

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

All credits that require pre-certification must be submitted through MAT.  Individual filers can remit the necessary information through their Individual Income Tax Account in MAT, or by selecting the “Submit a Credit Claim” option from the “Other links” menu in MAT.  The credits that require pre-certification by Individual Income Tax filers are:

Full Employment Act of 2011

Veterans Employment Act – Employer Credit

Veterans Employment Act – Business Start-up Expenses Credit

Qualified Irrigation/Reservoir System Credit

2013 Alabama Historic Rehabilitation Tax Credit

Alabama Small Business and Agribusiness Jobs Credit

Apprenticeship Tax Credit

2017 Alabama Historic Rehabilitation Tax Credit

Neighborhood Infrastructure Incentive Plan Credit*

Alabama Film Rebate

*The Neighborhood Infrastructure Incentive Plan Credit – This credit expired in 2015.  However, there may be some individual income tax filers that still qualify to claim this credit since there is a 10-year period over which the credit can be claimed.

How do you claim credits that do not require pre-certification by an Individual Income Taxpayer?

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 by an Individual Income Taxpayer through MAT:

Alabama Adoption Tax Credit

Credit for Transferring from Failing Public School to Nonfailing Public or Nonpublic School

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

Investment Credit (Alabama Jobs Act)**

Alabama New Markets Development Credit

Port Credit

Credit for Taxes Paid to Other States

Dual Enrollment Credit

Growing Alabama Credit***

Rural Physician Credit

Alabama Enterprise Zone Act Credit

Credit for Taxes Paid to a Foreign Country

Income Tax Capital Credit

*Alabama Accountability Act Credit – Scholarship Granting Organization (SGO) portion – The process for reserving a donation to an SGO remains unchanged for the 2020 tax year.  Only pass through entity filers are required to complete the new pre-certification process in MAT for donations made to an SGO when the Alabama Accountability Act Credit is passed through to its members.

**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, Alabama Department of Revenue will notify the investing company to complete an allocation schedule through MAT.  See https://revenue.alabama.gov/tax-incentives/.

***Growing Alabama Credit – The process for reserving a donation to an EDO remains unchanged for the 2020 tax year.

How do you claim credits that are passed through from a Partnership, S-Corporation, Estate, or Trust?

If the credit is from a Schedule K-1 issued by a pass through entity, the credit claim will be submitted by the pass through entity and no action is required by the individual. The credit claim must be submitted by the entity and approved by the Alabama Department of Revenue before the credit will be allowed on an individual’s income tax return. Additional information about credit pre-certification for pass through entities can be found at https://revenue.alabama.gov/tax-incentives/.

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

Individuals that have a MAT account should complete the following steps:

  • Log into MAT using your User ID and Password.
  • Select the “Individual Income 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, 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.

Individuals that do not have a MAT account and are unable to create one should complete the following steps:

  • Go to the MAT homepage (www.myalabamataxes.alabama.gov).
  • Select “Submit a Credit Claim” from the “Other Links” menu on the right margin of the page.
  • Enter the requested taxpayer information: Full Legal name, Social Security Number, Email Address, and Contact Number. Select “Next.”
  • Enter the requested information for the credit claim: Credit Type, Filing Period, Credit Amount Requested, and upload attachments (include documentation received to verify the authorization of the credit). Select “Previous” to return to Step 3 to edit the information or “Next” to review the credit claim.
  • Review the information entered in Step 4. Select “Previous” to edit the information or select “Submit” to send the credit claim through for review.

Who should you contact for assistance with the credit submission process and/or questions about individual income tax credits?

Individual taxpayers needing assistance with the credit claim process and/or individual taxpayers who have questions about available tax credits should call the Individual Income Tax Section at (334) 353-9770, (334) 353-0759, or (334) 353-0602.