Apprenticeship Tax Credit Claiming Procedures

Beginning January 21, 2020, the Apprenticeship Tax Credit must be pre-certified via an online portal through My Alabama Taxes (MAT) before the taxpayer can claim the credit on the Alabama income tax return.

Prerequisites for filing an online film credit claim through MAT:

• Certificate issued from the Alabama Office of Apprenticeship indicating the amount of apprenticeship credit awarded

Procedures for filing an online apprenticeship credit claim through MAT:

• Log in to My Alabama Taxes using your login credentials.
• Once logged in, navigate to the Pass-through Entity, Business Income Tax, or Financial Institution Excise Tax under Accounts.
• Under the ‘I Want to’ section, click on the ‘Submit a Credit Claim’ and complete the following required fields:
  • • Credit Type – Select “Apprenticeship Tax Credit” from the drop-down menu.
    • Filing Period – Enter the tax year in which the apprenticeship credit is being claimed.
    • Credit Amount – Enter the amount of the tax credit certified by the Alabama Office of Apprenticeship.
    • Owner Information (For pass-through entities only) – Must enter the owner information. See Note below.
    • Attachment – Attach a copy of the certificate from the Alabama Office of Apprenticeship indicating the amount of apprenticeship credit awarded. The credit will not be accepted if the certificate is not attached.

NOTE: Pass-through entities with numerous partners can select “Download Owner Information Spreadsheet,” enter the owner’s information and percentage of ownership, and save the file.  Once saved, use the “Import” tab to load the table in the credit claim.  You can save the file for future claims and modify the spreadsheet as needed (i.e., adding/deleting owners, change ownership percentage).

Once the Department approves the credit claim request, the taxpayer submitting the claim will receive a web notice confirming the credit.

For corporate income and financial institution excise taxpayers, the credit must be listed on the taxpayer’s income tax return at the time the return is filed.

For pass through entities, the credit will flow through to the owners based on their pro-rata ownership. If the pass-through entity is allocating the credit to an individual taxpayer, the pass-through entity must notify the individual of the amount of credit allocated to them. If the credit will flow to an owner that is a pass-through entity, that entity will receive a letter from ADOR with instructions on how to pre-certify the credit through MAT. For further information on filing the pass-through entities, please click here.