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Growing Alabama Credit Claiming Procedures

 

PROCEDURES FOR RESERVING A GROWING ALABAMA CREDIT

 

 

Additional
Information

 

Link to MAT login

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QUESTIONS?


Preeti Gratz
Kelly Graham


334-242-1175

Eligible donors may reserve a Growing Alabama Credit for contributions made to an Economic Development Organization (EDO) for an approved qualifying project. Reservations are made online through My Alabama Taxes (MAT) and are on a first-come, first-served basis, subject to verification by the EDO confirming that: the contribution has been received, the project has been funded in accordance with the applicable Growing Alabama Funding Agreement, and the project will be undertaken.

 

 

 

 

 

Important Dates to Remember

 

 

 

Procedures for Eligible Donors

 

Prerequisite for reserving a Growing Alabama Credit for an approved qualifying project:
  • Donors must have a My Alabama Taxes (MAT) account to reserve the credit through ALDOR’s online reservation system.
Procedures for making an online credit reservation through MAT:
Part I – Make a Donation
  • Log in to My Alabama Taxes using your login credentials.
  • Once logged in, navigate to the appropriate tax account for the taxing entity:
      • For corporations, navigate to the Business Income Tax account. If the corporation is a public utility, then navigate to Utility 2.2 Gross Receipts License Tax account.
      • For S corps, LLCs, and partnerships, navigate to the Pass-Through Entity account. If the entity is a public utility, then navigate to Utility 2.2 Gross Receipts License Tax* account.
      • For individuals, navigate to the Individual Income Tax account
      • For financial institutions, navigate to Financial Institution Excise Tax account.
      • For insurance companies, navigate to the Business Privilege Tax or Withholding
        Tax account.
  • Under the appropriate Account, click on ‘Report a donation to an Economic Development Organization’ and complete the required fields as follows:
      • Under ‘Donor Information,’ enter the donor’s contact information and address.
      • Under ‘EDO Donation Information,’ click on the project for which you wish to make the credit reservation.
      • Donation amount – Enter the amount of credit you are reserving.
        • For utility companies that choose “Utility 2.2 Gross Receipts License Tax” account, click ‘Yes’ or ‘No’ to the question, ‘Would you like to allocate a portion of your donation to your 2.2% License Tax?
        • If you choose Yes,  enter the amount of credit to be allocated against income tax and/or 2.2 utility gross receipts license tax at the time of the donation reservation. Please be advised that this allocation is irreversible once made.
      • Donation date – Enter the date the reservation is made. Please note that the donor has 21 days from this date to make the cash contribution to the EDO. Any donation that is not confirmed by the EDO on the date the online project reservation is closed will be denied.
Part II – Review Submission

The donor must agree to the terms and rules of the donation by checking the box before the donation can be submitted. The terms and rules include the following:

  • The donor has 21 days from the date of the online credit reservation to make a cash donation to the EDO for the approved project.
  • The EDO has 60 days from the date the project is added to the online system to confirm that the taxpayer’s donation has been received, the project has been funded, and the project will be undertaken.
  • In the event the taxpayer’s donation is greater than the amount of the reservation, the credit is limited to the amount of the reservation available for the project.
  • The credit is only available to the donating taxpayer making the donation. For pass-through entities, the credit  may pass through to owners of the pass-through entity. In order to pass the income tax credit to the owner(s), the pass-through entity must submit a credit claim once they receive the Growing Alabama approval letter from ALDOR. For detailed instructions on how to submit a credit claim to pass through entities, please click here.
  • The donor acknowledges the disclosure requirements under Section 41-29-3, Code of Alabama, and shall disclose the amount of the Growing Alabama Credit received and the realized benefits to the Secretary of Commerce. The information provided shall subsequently be included in the Department of Commerce’s reporting requirements under Section 40-1-50, Code of Alabama.

(*If you are a Growing Alabama credit recipient claiming the credit against the Utility 2.2 Gross Receipts License Tax, you may apply the credit against the annual payment when filing the Utility 2.2 Gross Receipts License Tax return or apply the credit against your payments on a quarterly basis. If you choose to apply the credit against the quarterly payments, click “Make a payment” in the Utility 2.2 box on your “Accounts” page in MAT, then “Utilize Credits for Payment” to apply the credit against quarterly payments.)

What to expect after the online credit reservation is submitted through My Alabama Taxes (MAT):

  • The donor will receive a confirmation number acknowledging the receipt of the reservation.
  • The donor will receive a subsequent web notice from MAT notifying whether their donation has been approved or denied by the EDO.
  • The donor will receive a letter from the Department of Revenue confirming their Growing Alabama Credit if the EDO confirms via ALDOR’s online system that the donation has been received, the project has been funded, and the project will be undertaken.

 

Procedures for Economic Development Organizations

 

An Economic Development Organization (EDO) must have a My Alabama Taxes (MAT) account before the Alabama Department of Revenue (ALDOR) can add the EDO’s approved project in the online reservation system. Once ALDOR opens the online reservation for the EDO project, the EDO will receive a web notice notifying them that the online reservation is open and available to the donors willing to make contributions through the online reservation system.

Steps required to be taken by the EDO:

  • Create a MAT account so that ALDOR can open the online project reservation to receive donations.
  • The EDO has 60 days from the date the project is added to the online system to confirm that the taxpayer’s donation has been received, the project has been funded, and the project will be undertaken. The project will close 60 days from the date the project is added to the online system. Any reservations that have not been confirmed before the online reservation closes will automatically be denied.

To approve/deny the donation reservations, please follow the steps below:

  • Log in to My Alabama Taxes using your login credentials.
  • Once logged in, click on the “Verify EDO donations/confirm project” link under Correspondence in the Accounts tab
  • Read and Accept the disclaimer shown in the next window and click Next.
  • Approve/deny donations by checking the appropriate boxes, and then confirm the information provided on the screen.
  • Review and submit.

Please be advised that it is the responsibility of the EDO to comply with the above steps as provided in the Growing Alabama Funding Agreement. If you have further questions, please contact the Office of Economic Development.

 

Procedures for Submitting a Credit Claim – For Pass Through Entities Only

 

Upon receipt of the Growing Alabama Credit award letter from ALDOR, pass-through entities must submit a credit claim through MAT to pass the credit to its owners. The owners of a pass-through entity will not be allowed to claim the Growing Alabama Credit if the following procedures are not completed by the pass-through entity.

  • Login to My Alabama Taxes using your login credentials.
    • Once logged in, navigate to the Pass-Through Entity
    • Click on the ‘Submit a Credit Claim’ link under “Tax incentives’ and complete the following required fields:
      • Credit Type – Select “Growing Alabama Credit” from the drop-down menu.
      • Filing Period – Enter the tax period in which the Growing Alabama Credit is being claimed.
      • Credit Amount – Enter the amount of the Growing Alabama Credit as provided in the Growing Alabama Award letter from ALDOR.
      • Provide the owner(s) information as requested under ‘Owners.’ 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).
      • Attachments – Attach the Growing Alabama Credit award letter from ALDOR and any other pertinent information you’d like to include.
      • Please review the information in full (and print a copy for your records). Once reviewed, submit the credit claim.

Once the Growing Alabama Credit claim is submitted through MAT, ALDOR will review the claim. The Office of Economic Development may require additional information if the supporting documents are incomplete or not provided. Please note that lack of proper documentation to support the credit claim will delay the process.

When ALDOR reviews the requested credit claim, the pass-through entity will receive a web notice notifying them of whether the credit claim submission has been approved or denied. If the credit claim submission is approved, the owners will receive the Growing Alabama Credit award letter notifying them of the amount of credit they are entitled to claim on their income tax returns. The approved amount of the credit must be listed on the taxpayer’s income tax return at the time the return is filed. For further questions, please contact incentives@revenue.alabama.gov or call 334-242-1175.