Schedule E (Form 6000)
The "Claims for Credits" Summary
Meaning: Schedule E is the specific section of the Alaska Corporate Net Income Tax Return (Form 6000) used to aggregate and claim all state-specific tax credits, effectively reducing a corporation's final tax liability.
In the context of R&D, Schedule E captures the Education Tax Credit (Form 6310), which is the primary vehicle for monetizing corporate contributions to academic research in Alaska.
Analysis The R&D Connection
Unlike the federal government or states like California, Alaska does not maintain a broad "Section 41" R&D tax credit for internal research expenses. Instead, the state incentivizes R&D through the Alaska Education Tax Credit (AETC).
Corporations that contribute cash or equipment to qualified Alaska institutions (universities, vocational centers) for the purpose of instruction and research can claim a credit against their Corporate Income Tax.
The Workflow:
1. Contribution
Corporation donates to University of Alaska for Arctic Research.
2. Form 6310
Calculate Education Credit (Limit: $5M/year).
3. Schedule E (Form 6000)
Enter credit amount on Line 7 (Education Credit).
4. Form 6000, Line 8
Total Credits subtract from Tax Liability.
Alaska Credit Landscape
Distribution of typical credit claims on Schedule E.
Important Distinction
While "Internal R&D" isn't directly credited, the Minerals Exploration Incentive is another key "Schedule E" item that functions like an R&D credit for the mining sector.
Credit Simulator
Estimate the impact of research contributions on your Schedule E.
*Based on standard AETC tiers (AS 43.20.014).
Calculation Breakdown
- First $100k (@50%): $0
- Next $200k (@100%): $0
- Remainder (@50%): $0
- Total Credit: $0
Net Tax Liability after Schedule E application
SCHEDULE E - CREDITS
Official Guidance & Statutes
Who Qualifies?
Corporations subject to Alaska Income Tax can claim the credit if they donate to qualifying institutions. This includes the University of Alaska system, accredited nonprofit higher education institutions in Alaska, and qualifying vocational training centers.
Carryforward Rules
If your calculated credit on Schedule E exceeds your tax liability for the year, you cannot get a refund. However, you can typically carry the unused credit forward to future tax years (limitations apply, usually up to 3 years).
Common Pitfalls
- Donating to Non-Qualifying Entities: The recipient must be specifically recognized by the Department of Revenue.
- Documentation: You must attach Form 6310 and receipts/proof of contribution to Form 6000.
- Federal Confusion: Don't try to claim federal Section 41 expenses directly on Alaska Schedule E unless they fall under the specific "Exploration" or "Education" buckets.
AS 43.20.014. Income Tax Education Credit.
(a) A taxpayer is allowed a credit against the tax due under this chapter for cash contributions accepted for
(1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation...
(2) secondary school vocational education courses...
(b) The amount of the credit is
(1) 50 percent of contributions of not more than $100,000;
(2) 100 percent of the next $200,000 of contributions; and
(3) 50 percent of the amount of contributions that exceeds $300,000.
*Note: Statutory limits and rates are subject to legislative changes. Always verify with the current year's instructions.
Works Cited & Resources
- Alaska Department of Revenue - Tax Division Corporate Income Tax Forms and Instructions (Form 6000), Schedule E. Retrieved from official state tax documents.
- Alaska State Legislature Alaska Statutes 43.20.014: Income Tax Education Credit. (Current Statute).
- Alaska Department of Revenue Form 6310: Education Tax Credit Application and Instructions.
- Tax Foundation State Corporate Income Tax Rates and Brackets (General Reference for State Comparisons).
The Nexus of Schedule E (Form 6000) and the Alaska R&D Tax Credit: A Technical Compliance Report
Schedule E (Form 6000) is the critical component of the Alaska Corporation Net Income Tax Return used to calculate the corporation’s net tax liability (regular and alternative minimum tax). While the Research and Development (R&D) credit is calculated externally on Form 6390, Schedule E provides the fundamental liability baseline that dictates the maximum limit for applying the credit. The utilization of the Alaska R&D tax credit is a multi-step process for corporate taxpayers, intricately linked to the federal R&D credit mechanism but subject to specific state limitations and ordering rules established by the Alaska Department of Revenue (DOR). The integration of the credit requires strict adherence to statutory parameters, primarily Alaska Statute (AS) 43.20.021, and the appropriate sequencing of state tax forms to realize the intended benefit.
II. Statutory and Regulatory Foundation of the Alaska R&D Tax Credit
The Alaska R&D tax credit is not an independently calculated state incentive based solely on in-state expenditures. Rather, it operates as a derivative credit, leveraging the complex calculation and documentation procedures already established for the federal Research Credit under Internal Revenue Code (IRC) Section 41.
A. AS 43.20.021: The Framework for Federal-Based Credits
Alaska Statute (AS) 43.20.021 governs how corporations may claim federal tax credits against their Alaska Corporation Net Income Tax. This statute mandates a specific conversion rate and apportionment requirement for corporations utilizing federal benefits at the state level.
The 18% Multiplier
AS 43.20.021(d) dictates that when a credit allowed under the Internal Revenue Code is also allowed in computing Alaska income tax, the resulting state credit is strictly limited to 18 percent of the amount of the credit determined for federal income tax purposes.1 This 18% multiplier applies only to the portion of the federal credit that is attributable to Alaska sources. This percentage is a core defining feature of the Alaska R&D tax credit.3
Federal Linkage (IRC § 38 and § 41)
The Alaska credit is contingent upon the taxpayer’s qualification for the federal General Business Credit allowed under IRC Section 38, which includes the federal Research Credit (IRC Section 41).3 A taxpayer must first compute and substantiate their eligibility for the federal credit amount using Federal Form 6765, Credit for Increasing Research Activities, and report the result on Federal Form 3800, General Business Credit.4 Without a valid federal credit amount, no state credit can be claimed.
The structural decision by Alaska to base its credit purely on the federal calculation machinery represents a significant regulatory cascade. By setting the state benefit as a percentage of the allowed federal credit, Alaska delegates the rigorous definition and validation of Qualified Research Expenditures (QREs) to the federal standard. This arrangement substantially minimizes the state’s administrative and audit burden concerning QRE substantiation. Consequently, for corporations seeking this state benefit, the primary documentation effort must be geared towards satisfying the intense scrutiny of the IRS regarding the underlying QREs.
B. Defining Qualified Research Expenditures (QREs)
To qualify for the Alaska R&D credit, the business expenses must satisfy the same definition used under IRC § 41.5 This necessitates meeting the rigorous four-part federal test for QREs.4
The four components of the test require:
- Qualified Purpose: The expenditure must be incurred for creating a new business product or process, or improving an existing one. It is important to note that the product or process does not need to be new to the entire industry, only new or improved relative to the company conducting the research.4
- Elimination of Uncertainty: The activity must involve resolving technological uncertainty concerning the capability, methodology, or design of the product or process. Failure to establish a clear intent to eliminate technological uncertainty often results in the disqualification of activities.4
- Process of Experimentation: The company must be able to demonstrate a systematic process of experimentation, involving testing alternatives or performing a trial-and-error approach during the invention or improvement process. This applies across various activities, regardless of the employee’s specific job title.4
- Technological in Nature: The research must fundamentally be based on principles of a hard science, such as engineering, chemistry, physics, or computer science.4
Strategic Calculation Method Choice
Federal Form 6765 permits the taxpayer to choose between two methods for calculating the federal credit: the Regular Credit method and the Alternative Simplified Credit (ASC) method.6 The Regular Credit subtracts a complex base amount from the total QREs, while the ASC uses a different, simpler base amount.6 Although a taxpayer files using only one method, the strategic choice is critical. Since the Alaska credit is a flat 18% multiplier applied to the resulting federal credit amount 1, any increase in the federal credit directly translates into an 18% increase in the state benefit. Therefore, expert analysis requires calculating both federal methods to ensure the option yielding the maximum federal credit is selected, thereby maximizing the derivative Alaska credit.6
Documentation and Substantiation
To successfully claim the credit, comprehensive documentation must be maintained and attached to the Alaska state tax return, specifically via Form 6390. This documentation must include copies of federal Form 3800 and applicable supporting federal forms 7, alongside internal project records, such as general ledger detail, payroll records, project notes, and other business communications demonstrating adherence to the four-part test.4
III. Form 6000, Schedule E: The Liability Determinant
Form 6000, Alaska Corporation Net Income Tax Return, is the foundational document for corporate entities operating in Alaska.8 Schedule E of this return plays a central, albeit indirect, role in the utilization of the R&D credit.
A. The Function of Schedule E: Calculation of Net Income Tax
Schedule E is the mechanism through which the corporation’s final tax obligations are quantified. This schedule is used to compute two primary liabilities: the Alaska Regular Tax and the Alaska Alternative Minimum Tax (AMT).2
The calculated tax figures generated on Schedule E are essential data inputs for the subsequent form used to process the R&D credit, Form 6390. Specifically, the Alaska Regular Tax (derived from Schedule D, referenced by Form 6390) and the Net Alaska AMT are transferred directly to Part II of Form 6390, which manages the allowable credit application.2
B. Linkage to Other Credits and Ordering Rules
The process of credit application in Alaska is subject to mandatory ordering rules, which are critical for determining the remaining liability against which the R&D credit can be utilized.
Credit Stacking and Priority
The Department of Revenue (DOR) dictates that specific categories of credits must be applied sequentially. Alaska Incentive Credits (claimed on Form 6300, such as the now-expired Film Credit or certain energy-related incentives) must be applied first against the gross tax liability.2
Form 6390, which processes the R&D credit, requires the taxpayer to calculate the residual tax liability after this application:
- Line 12c of Form 6390 determines the Alaska regular tax remaining after the application of Alaska incentive credits.9
- Line 13c determines the Net Alaska Alternative Minimum Tax (AMT) remaining after the application of incentive credits.9
This mandatory ordering structure means that if a corporation possesses significant Alaska Incentive Credits, those credits will reduce the Regular Tax base calculated on Schedule E, thereby limiting the residual liability available for offset by the R&D credit.2 While the R&D credit can be carried forward for 20 years, utilizing priority credits first can delay the immediate cash realization of the R&D benefit. Taxpayers must therefore model the impact of credit ordering against their regular tax exposure to forecast effective credit utilization.
IV. Compliance, Documentation, and the DOR Forms Chain
The actual mechanical calculation and application of the Alaska R&D credit occurs not on Form 6000, Schedule E, but on Form 6390, Alaska Federal-Based Credits. This form acts as the gateway and computational sheet for all federally derived credits.
A. The Gatekeeper: Alaska Form 6390
Form 6390 is mandatory for any taxpayer claiming federal-based credits, including the R&D credit, on their Form 6000.2 Its primary role is to “order and limit federal-based credits, on an as-if Alaska basis”.2
B. Tracing the R&D Credit Through Form 6390
The calculation on Form 6390 is divided into two major steps: determining the potential credit amount and then determining the allowable amount based on tax liability.
Part I: Calculation of the Apportioned Credit
- Federal Input: The process begins with the total federal general business credit from non-passive activity reported on federal Form 3800.9
- Apportionment: For multi-state corporations, the federal credit amount must be apportioned to Alaska (Line 7) using the state’s apportionment factor (Line 6).3 This ensures that only the credit associated with business activities attributable to Alaska is considered.
- Applying the Multiplier: The apportioned amount is then multiplied by the statutory 18% rate (Line 8) to calculate the current total apportioned general business credit for Alaska.9
- Carryforwards: Any unused credit carried forward from prior Alaska tax years or carried back from a subsequent year (Lines 9 and 10) is added to determine the total credit available before limitation (Line 11).9
Part II: Determining the Allowable Credit and Limitations
Part II links back directly to the liability calculated on Form 6000, Schedule E.
- Regular Tax Limitation: The credit is applied against the available Alaska Regular Tax after prior incentive credits (Line 12c).9 The total allowed R&D credit cannot exceed this remaining Regular Tax liability.
- The AMT Restriction: A crucial statutory limitation exists: the federal-based R&D credit may not be applied against the Alaska Alternative Minimum Tax (AMT) calculated on Form 6000, Schedule E.3 This restriction is a significant constraint compared to federal rules where credits may often offset AMT liability.
If a corporation finds itself in an Alaska AMT position, the potential cash benefit of the R&D credit is severely curtailed, limited only by the remaining Regular Tax liability. Any unused credit generated due to this limitation is then carried forward for future use. This mandates detailed financial forecasting, as the immediate realizable value of the R&D expenditure is wholly dependent on avoiding an AMT position at the state level.
C. Partnerships and Flow-Through Entities
While Form 6000 is for corporations, the R&D activity may originate in a pass-through entity. If the expenditure is incurred by a partnership doing business in Alaska and having corporate partners, the partnership must file Form 6900, Alaska Partnership Information Return.7 The R&D credit is then allocated from the partnership to the corporate partner, allowing the corporate partner to claim the credit to offset its corporate tax liability on its own Form 6000 filing.10
V. Utilization Limitations and Strategic Planning
A. Credit Carryforward and Carryback Provisions
The Alaska R&D credit is a strategic, long-term asset due to its generous carry provisions, compensating for its non-refundable nature.
Non-Refundable Status
The credit is strictly non-refundable.4 This means that if the credit amount exceeds the net income tax liability, the excess cannot be returned to the taxpayer as a cash refund.10 The credit can only provide a dollar-for-dollar offset against the calculated Alaska tax liability.
Carry Period
Any unused credit amounts that exceed the tax liability limitation may be carried back for one year and carried forward for up to 20 years.3 The extensive 20-year carryforward window provides long-term flexibility, making the credit highly valuable for R&D-intensive businesses, particularly startups or entities undergoing initial R&D phases before achieving significant taxable income.
B. Prohibition on Double-Dipping
Alaska tax policy prevents expenditures from yielding multiple tax benefits. The taxpayer may not claim a deduction when calculating Alaska corporate net income tax for an expenditure that is simultaneously the basis for a service industry credit (SIC, AS 43.20.049).10 This principle extends to the R&D credit, ensuring the taxpayer does not benefit from both a credit and a full deduction for the same qualified expenditure. Furthermore, if an expenditure forms the basis of a federal credit, it may not be claimed elsewhere on the Alaska corporate income tax return, reinforcing Form 6390 as the sole mechanism for recognizing federal-based credits.10
C. Industry Specificity
The R&D tax credit is widely used across various sectors, particularly those engaged in engineering, manufacturing, and technological development.11 In Alaska, a prominent user of the credit is the oil and gas industry, where companies involved in designing and manufacturing specialized components leverage the incentive to support in-state development activities.12 The state also offers or has offered other highly specialized incentives, such as the Gas Storage Facility Credit (AS 43.20.046) and the SIC.10 The existence of these targeted incentives emphasizes the need for corporations to correctly identify and prioritize their credits according to the statutory ordering rules implemented through Forms 6300 and 6390.
VI. Quantitative Case Study: Application of the R&D Credit
This case study demonstrates the multi-step process, illustrating how the liability calculated on Form 6000, Schedule E, restricts the actual benefit derived from the R&D credit calculation on Form 6390.
A. Scenario Setup: Anchorage Oil & Gas Component Manufacturer
Consider a C-Corporation in Anchorage that manufactures components for the oil and gas industry. The company performs qualifying research that meets the federal four-part test. For simplicity, assume the company operates exclusively within Alaska, rendering the apportionment factor equal to 1.0.
B. Step 1 & 2: Federal Determination and Alaska Calculation
The company calculates its federal R&D tax credit annually using the necessary federal forms. The following table reflects the results of this calculation over four years, culminating in the required Alaska credit amount (18% of the federal credit).12
Alaska R&D Credit Calculation Summary
| Year | Total QREs | Federal Credit Claimed (Form 3800) | Alaska Apportioned Credit (18% Multiplier) |
| 2021 | $1,300,000 | $130,000 | $23,400 |
| 2020 | $900,000 | $90,000 | $16,200 |
| 2019 | $650,000 | $65,000 | $11,700 |
| 2018 | $450,000 | $45,000 | $8,100 |
| Total | $3,300,000 | $330,000 | $59,400 |
For 2021, the company generates a potential Alaska R&D credit of $23,400, calculated as $\$130,000 \times 0.18$.3 This amount ($23,400) is the figure entered on Line 8 of Form 6390.
C. Step 3: Limitation and Application via Form 6390 and Form 6000, Schedule E
Assume the corporate tax liability determined on Form 6000, Schedule E for 2021, is as follows:
| Tax Component (Form 6000, Schedule E Input) | Amount |
| Alaska Regular Tax Liability (Line 12a, Form 6390) | $45,000 |
| Alaska Incentive Credits (Applied first via Form 6300) | $5,000 |
| Alaska AMT Liability (Line 13a, Form 6390) | $2,000 |
| Total Alaska Tax Liability (Before R&D Credit) | $47,000 |
The credit application proceeds on Form 6390:
- Determine Available Regular Tax Base (Form 6390, Line 12c): The Regular Tax liability is reduced by the priority Incentive Credits:
$$\text{Available Regular Tax} = \$45,000 – \$5,000 = \$40,000$$
The maximum allowable R&D credit is capped by this $\$40,000$ Regular Tax base. - Determine Net AMT Tax (Form 6390, Line 13c): The Alaska AMT liability remains $2,000 (assuming no incentive credits apply against AMT), as the R&D credit is statutorily prohibited from offsetting AMT.3
- Application and Carryforward:
- R&D Credit Generated (Line 11 of Form 6390) = $23,400.
- The full $23,400 credit is less than the Regular Tax limit of $40,000 and is therefore fully utilized in the current year.
- Credit Carryforward: $0 (since the credit was fully applied).
- Final Tax Due (Reported on Form 6000, Schedule A):
- Net Regular Tax: $\$45,000 – \$5,000 \text{ (Incentive)} – \$23,400 \text{ (R\&D)} = \$16,600$.
- Net AMT: $\$2,000$.
- Total Tax Liability: $\$16,600 + \$2,000 = \$18,600$.
This financial tracing exercise highlights the relationship between the forms. The final, reduced tax liability of $18,600 is summarized on Form 6000, but the validity of the $23,400 credit offset relies entirely on the calculations and statutory adherence demonstrated on the supporting Form 6390, which, in turn, derived its liability limits from the Schedule E calculation.
VII. Conclusion: Maximizing the Strategic Value of the Alaska R&D Credit
The Alaska Research and Development tax credit is a significant, federally dependent incentive designed to encourage innovation by providing an 18% state benefit against corporate net income tax liability. Corporations must recognize that the credit is not self-contained but is an integral part of a complex filing sequence managed by the Alaska Department of Revenue.
Schedule E of Form 6000 is the indispensable initial step, providing the liability calculation (Regular Tax and AMT) that ultimately feeds into the limitations test on Form 6390. Success in claiming the credit hinges on three core compliance principles: 1) rigorous adherence to the federal four-part QRE test and thorough federal documentation (Form 6765/3800); 2) precise computation and apportionment of the 18% state credit via Form 6390; and 3) strict observance of credit ordering rules and limitations, especially the critical constraint that the credit cannot offset Alaska Alternative Minimum Tax.
The non-refundable status of the credit, coupled with the 20-year carryforward period, positions the Alaska R&D credit as a valuable, long-term asset, provided taxpayers proactively manage the annual liability limitations imposed by the state’s tax structure. A comprehensive understanding of the Form 6000/Schedule E liability determination is paramount to accurately forecasting the immediate cash value and strategic deferral of the R&D benefit.
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What is the R&D Tax Credit?
The Research & Experimentation Tax Credit (or R&D Tax Credit), is a general business tax credit under Internal Revenue Code section 41 for companies that incur research and development (R&D) costs in the United States. The credits are a tax incentive for performing qualified research in the United States, resulting in a credit to a tax return. For the first three years of R&D claims, 6% of the total qualified research expenses (QRE) form the gross credit. In the 4th year of claims and beyond, a base amount is calculated, and an adjusted expense line is multiplied times 14%. Click here to learn more.
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