Investment Credit

Section 40-18-376 provides for a discretionary credit depending upon the qualifications of the approved company’s capital investment and the requirements set forth in §40-18-371. 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 My Alabama Taxes (MAT). Please see the bottom of this page for further details on MAT.

For more information regarding eligibility, qualifications, and procedures for a new or expansion project, please contact Ted Clem, Director of Recruitment and Retention at ted.clem@commerce.alabama.gov or 334-242-0400. For additional information on the Investment Credit, please click here.

Provisions of the Investment Credit include:

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

*For qualifying investments in a targeted or a jumpstart county, the incentive period is available for up to 15 years (Act 2019-392).