Alaska Schedule H Guide
Schedule H (Form 6000): Executive Analysis
Schedule H is the summary mechanism on the Alaska Corporate Income Tax Return (Form 6000) used to claim and aggregate incentive credits, primarily the Research and Development (R&D) credit derived from AS 43.20.021.
Of Qualified Research Expenses (QREs) exceeding the base amount.
Alaska Statutes governing the R&D incentive.
Feeder form required to substantiate Schedule H line items.
Understanding the Context
Schedule H does not exist in a vacuum. It is the "basket" where various Alaska specific incentives are collected. While it accommodates other credits (like the Gas Exploration Credit), for most technology and industrial firms, it is synonymous with the R&D Credit.
Crucially, Alaska's tax code often "piggybacks" on the Federal Internal Revenue Code (IRC), but Schedule H represents specific state-level decoupling where Alaska offers unique incentives to spur local economic activity.
Strategic Analysis of Schedule H (Form 6000) and the Alaska R&D Tax Credit Framework: Compliance, Calculation, and Policy Nuances
Schedule H (Form 6000) is the procedural document utilized by corporations to compute their modified Alaska taxable income. Its calculation establishes the state tax base against which the federal-based Research and Development (R&D) tax credit, claimed separately on Form 6390, is ultimately applied.
The Alaska R&D tax credit framework represents a strategic effort by the state to promote innovation and economic diversification, particularly acknowledging that development costs in the region are often higher than the national average.1 The credit provides a dollar-for-dollar offset against Alaska tax liabilities.2 However, compliance is not straightforward, requiring a nuanced understanding of how the Alaska Corporation Net Income Tax Return (Form 6000), its associated income computation schedule (Schedule H), and the specialized credit form (Form 6390) interact. Schedule H is vital because it determines the overall tax liability, which dictates the immediate utility of the non-refundable R&D credit, which is derived from the federal IRC § 41 framework but limited to 18% of the apportioned federal amount.2
I. The Foundation: Alaska Corporate Net Income Tax (Form 6000)
1.1 Statutory Basis and Filing Requirements (AS 43.20)
The primary instrument for C-Corporations to fulfill their tax obligations is Alaska Form 6000, the Alaska Corporation Net Income Tax Return, governed by Alaska Statute 43.20. Corporations doing business in Alaska are subject to these requirements.4
Alaska’s filing structure provides a slight administrative variance from the federal timeline. C-Corporations must file and pay their corporate income taxes 30 days following the federal deadline.5 For calendar year corporations, this means the filing deadline is typically May 15th, although the payment must be remitted much earlier, by March 15th.5 While Alaska automatically grants an extension to file until October 15th without requiring a separate form, it is critical to note that this extension applies solely to the filing date, not the payment date, meaning all taxes due must still be paid by the March 15th deadline to avoid penalties.5 Furthermore, the Alaska Department of Revenue (DOR) encourages, and in many cases mandates, electronic filing. Taxpayers should be aware that filing a paper return may result in the assessment of penalties for failure to file electronically.6 If a corporation is granted a waiver from the electronic filing requirement by the Internal Revenue Service (IRS), the DOR will accept this as a valid waiver for the state requirement, provided the corporation notifies the DOR in writing.7
1.2 Defining the Taxpayer and Eligibility
The Alaska R&D tax credit is accessible to a broad array of corporate structures, including C-Corporations, S-Corporations, Limited Liability Companies (LLCs), and Partnerships, provided they conduct business in Alaska.4 Sole proprietorships, however, do not qualify for the credit.4
A key complexity arises when dealing with pass-through entities. If a partnership incurs the qualified R&D expenditures, the credit is first reported on the Alaska Partnership Return (Form 6900). A corporate partner within that entity may then claim its proportional share of the credit to offset its own Alaska corporate tax liability.9
Regarding geographic requirements, the business must maintain a nexus and conduct business within Alaska.4 However, in a strategic move designed to encourage national companies to establish a corporate presence in the state, the qualified research activities themselves do not need to be physically conducted within Alaska, provided they are conducted within the United States.2 This flexibility is significant for corporate tax planning, as it allows companies with substantial R&D operations in the lower 48 states to realize an Alaska tax benefit merely by having a business nexus in the state. This policy design helps mitigate the concern that the higher development costs associated with physically locating R&D infrastructure in Alaska might otherwise discourage innovation-focused corporations from maintaining a state presence.1 By allowing the credit for research conducted elsewhere in the U.S., Alaska effectively captures tax revenue associated with highly mobile intellectual capital while encouraging corporate residency.2
II. Schedule H: Computation of Alaska Taxable Income
2.1 Schedule H’s Function in Apportionment and Allocation
Schedule H, officially titled “Computation of Alaska Income,” is an integral component of Form 6000.6 Its fundamental purpose is to bridge the gap between a corporation’s federal taxable income and its Alaska taxable income. This is achieved through necessary adjustments, allocations, and apportionment calculations specific to Alaska tax law.
The schedule requires data input from various sources to compute the “as-if Alaska taxable income” (which typically corresponds to line 1 of Schedule A of Form 6000).6 This includes incorporating information from Schedule J (capital gains/losses, including capital loss carryover) and Schedule L (the dividends-received deduction).6
Alaska tax law mandates specific modifications to income on Schedule H. For instance, Internal Revenue Code (IRC) Section 1231 gains that are apportioned and allocated to Alaska must be added back to the corporation’s taxable income.10 Conversely, a subtraction is allowed for apportioned and allocated net capital gain that is taxed at the alternative capital gains tax rate.10 These adjustments are crucial because they finalize the corporation’s true Alaska net income base before the statutory tax rates are applied.
2.2 Schedule H vs. Credit Forms: Functional Segregation
The distinction between Schedule H and the R&D credit claim form (Form 6390) is based on functional segregation. Schedule H focuses exclusively on determining the corporation’s income and tax base. The instructions for Form 6000, which contain Schedule H, confirm that while Schedule H is essential, it is not the location where the R&D credit calculation takes place.6
The credit calculation and claim process is confined to Alaska Form 6390, the Alaska Federal-based Credits form.2 However, the two forms are inextricably linked within the corporate tax return workflow. Schedule H’s final output—the computed Alaska taxable income—determines the regular tax liability reported on Form 6000. This liability establishes the maximum possible amount of tax that the non-refundable credit calculated on Form 6390 can offset in the current year.
2.3 Impact of Schedule H on Credit Base Determination
The meticulous computation performed on Schedule H is more than an administrative step; it is a critical component of maximizing the utility of the non-refundable R&D tax credit. Because the credit cannot be refunded, it is only valuable to the extent that it offsets a current-year tax liability.2
The process begins with the modifications performed on Schedule H. Adjustments, such as the inclusion of 1231 gains allocated to Alaska 10, generally serve to increase the corporation’s gross Alaska taxable income. A higher calculated taxable income, finalized on Schedule H, directly translates into a higher initial regular tax liability on Form 6000. Consequently, a larger tax liability creates a larger “pool” that the calculated R&D credit (derived from Form 6390) can offset, thereby minimizing the unused credit portion that must be carried forward for potential use in future tax years.8 Therefore, accurate and comprehensive computation of Alaska taxable income on Schedule H is paramount for strategically maximizing the immediate realization of the R&D credit benefit, which otherwise might be deferred or potentially diminished by future legislative changes if carried forward.
The fundamental relationship between the key forms used in the Alaska corporate tax calculation is summarized below:
The Interrelation of Key Alaska Corporate Tax Forms
| Form/Schedule | Purpose in Compliance | Role in R&D Tax Credit Context |
| Form 6000 | Alaska Corporate Net Income Tax Return (Primary Filing) | The base return to which credit forms are attached. Determines the total liability to be offset. |
| Schedule H (Form 6000) | Computation of Alaska Taxable Income | Establishes the net income base (and thus the liability) against which the eventual credit (from Form 6390) is applied. |
| Form 6390 | Alaska Federal-based Credits | Calculation and official claim for the R&D tax credit and other federal-based credits. |
| IRS Form 6765 / 3800 | Federal R&D Credit Calculation / General Business Credit | Provides the foundational QRE definition and federal credit amount necessary to calculate the 18% Alaska state credit. |
III. The Alaska Research and Development Tax Credit Framework
3.1 Legislative Rationale and Economic Scope
The R&D Tax Credit is integral to Alaska’s strategy for fostering a resilient economy. By offering incentives, the state encourages businesses to reinvest tax savings back into research and development, which helps diversify the state’s economic base.1
The scope of qualifying activity is broad and is not limited to traditional high-tech labs or large industrial facilities. The credit applies to work in diverse sectors essential to the modern economy, including software development, manufacturing improvements, agriculture, and natural medicine.1 This broad eligibility ensures that the credit is a practical tool for businesses across Alaska seeking local solutions to local challenges.1
3.2 The Federal Mandate: Defining Qualified Research Expenditures (QREs)
The Alaska R&D credit is unique in that it is not defined by state statute but is instead derived entirely from the federal framework. The definition of Qualified Research Expenditures (QREs) used for the Alaska credit is identical to the standard established under Internal Revenue Code (IRC) § 41.2
To ensure an expense qualifies, a company must pass the stringent Federal Four-Part Test, which requires that the research activity demonstrates four specific characteristics 4:
- Qualified Purpose: The expenditure must be incurred for creating a new or improving an existing business component (product, process, formula, invention, or software).
- Elimination of Uncertainty: The activity must aim to eliminate technical uncertainty regarding the component’s capabilities, design, or manufacturing methodology.
- Process of Experimentation: The company must demonstrate that it has engaged in a systematic process of evaluation, including testing alternatives, to achieve the intended results.
- Technological in Nature: The research must fundamentally rely on principles of the hard sciences, such as the various branches of engineering, chemistry, physics, or computer science.4
A company’s eligibility for the Alaska credit is contingent upon its eligibility for the federal R&D credit. Therefore, compliance rests upon substantiating QREs using the federal standard.4
3.3 The Alaska Limitation: The 18 Percent Calculation Rule (AS 43.20)
While the definition of QREs is federal, the calculation of the Alaska benefit is subject to a strict statutory limitation. The Alaska R&D tax credit is statutorily limited to 18% of the allowed federal R&D tax credit.2
Furthermore, for corporations taxable both inside and outside of Alaska, the 18% rate is not applied to the total federal credit. Instead, the total federal credit must first be rigorously apportioned to Alaska based on the corporation’s business activity factors, which rely on the data developed through Schedule H. Only the resulting apportioned amount of the federal credit is then multiplied by the 18% limitation to determine the final Alaska credit amount.3
This consistent use of the 18% limitation reflects a stable, long-standing policy approach by the state toward federal tax incentives. Historical administrative regulations show that the state’s Investment Tax Credit, a derivative of IRC § 38 (the same section containing the R&D credit), was also consistently capped at 18% of qualified investment put into use in the state.11 This suggests a deliberate, uniform policy threshold designed to provide a predictable level of state tax relief derived from federal incentives, allowing the state to encourage investment while controlling the revenue impact of the credit program.
IV. Alaska Department of Revenue (DOR) Compliance and Claiming Procedures
4.1 Claiming the Credit: Form 6390 Requirements
The claiming process for the Alaska R&D tax credit is formalized through specific Department of Revenue documentation. The credit is not claimed on Schedule H of Form 6000, but rather on Alaska Form 6390—Alaska Federal-based Credits.2 This form serves as the mandatory schedule that calculates the credit and must be attached to the parent Alaska Corporation Net Income Tax Return (Form 6000).8
4.2 Required Attachments and Documentation (DOR Guidance)
To claim the credit successfully, a company must provide substantial evidence demonstrating both its qualification for the federal credit and the subsequent proper calculation of the state credit. This requires attaching copies of the relevant federal schedules to the state return. Specifically, the company must file IRS Form 6765, which calculates the federal R&D credit, and IRS Form 3800, which summarizes the General Business Credits.4
The DOR requires rigorous documentation for audit preparedness, mirroring the standards set by the IRS. Proof of eligibility for the underlying QREs should be maintained, including general ledger details, payroll records identifying researchers, project notes, lab results, and business communications relating to the experimentation process.4
4.3 Credit Carryforwards and Limitations
The Alaska R&D tax credit is designed as an offset against current tax liability, but it is explicitly non-refundable and non-transferable.2 This non-refundable status means that if the calculated credit exceeds the tax liability (derived from Schedule H’s income computation), the excess amount cannot be claimed as a cash payment.
To mitigate this restriction, the state provides a robust carryforward policy. Unused portions of the federal-based credits, including the R&D credit, may be carried back one year and carried forward for up to 20 years.3 This long carryforward period is crucial for early-stage or innovation-intensive companies that may experience net operating losses in their initial years, ensuring the deferred value of the credit remains viable for future profitable years.
4.4 Alaska Alternative Minimum Tax (AMT) Offset Restrictions
A significant compliance consideration involves the application of the R&D credit against the Alaska Alternative Minimum Tax (AMT). The DOR dictates a mandatory hierarchy for applying credits, particularly concerning the AMT offset.8
Taxpayers must first calculate their Alaska AMT (typically reported on Schedule E of Form 6000).12 Alaska statute then requires that any specific Alaska incentive credits (those derived exclusively from Alaska law, rather than federal derivatives) must be applied first to offset the regular or AMT liability. Only after all priority Alaska incentive credits have been fully utilized can the federal-based credits, such as the R&D credit claimed on Form 6390, be applied against the remaining AMT liability.8
The instructions for Form 6390 contain detailed worksheets governing the division of the offset between regular tax and AMT.12 This strict sequencing means that corporations subject to Alaska AMT must meticulously track and utilize all state incentive credits in the correct statutory order to maximize the total benefit and prevent unintentional deferral of the R&D credit.
V. Nuanced Distinctions in Alaska Tax Incentives
5.1 Differentiation from the Service Industry Tax Credit (AS 43.20.049)
It is essential to differentiate the federal-based R&D tax credit (Form 6390) from other statutory incentives, particularly the Service Industry Tax Credit (SIC) under AS 43.20.049. The SIC is highly restrictive and industry-specific. Qualifying expenditures for the SIC must be incurred in Alaska and be directly attributable to the in-state manufacture or modification of tangible personal property that has a useful life of three years or more and is used specifically for oil or gas exploration, development, or production.9
The key differences highlight the state’s segmented policy goals:
- Scope: The SIC is narrow, tied to physical, in-state capital investments in the dominant oil/gas industry. The R&D credit is broad, covering diverse technological research (software, natural medicine) 1, and is not restricted to in-state research location.2
- Exclusions: SIC qualifying expenditures explicitly exclude components or equipment used in the manufacturing process itself, focusing instead on services and supplies related to the modification or manufacture of the qualifying property.9
- Non-Duplication: A crucial statutory rule prevents double-dipping: an expenditure claimed for credit under AS 43.20.049 (SIC) cannot be used to claim any other tax credit or deduction against the Alaska corporate net income tax.9
This policy segmentation indicates that Alaska uses two parallel mechanisms to spur economic activity: the SIC offers a specific, powerful incentive for heavy industrial capital investment tied to the state’s resource economy, while the R&D credit provides a flexible incentive for innovative, high-tech intellectual capital that may be more geographically mobile.1 Corporate tax strategists must correctly classify their expenditures between these two regimes to ensure full compliance and proper claim utilization.
5.2 Location Requirements and Apportionment
The flexibility afforded to the R&D credit—allowing the research activity to occur anywhere in the United States 2—places immense importance on the apportionment calculations finalized in Schedule H.
Since the qualified research expenditures can be incurred outside the state, the federal credit amount must be accurately and rigorously apportioned to Alaska based on the corporation’s income factors before the 18% limitation is applied.3 This apportionment ensures that Alaska only subsidizes the portion of the federal R&D activity attributable to the business operations within its borders. The calculation methodology for this apportionment relies heavily on the underlying business data, such as sales, property, and payroll factors, which are established and reconciled during the Schedule H income computation process.
VI. Quantitative Case Study and Calculation Example
To illustrate the interplay between Schedule H and the R&D credit calculation on Form 6390, consider the case of a company, Aurora Tech Solutions (ATS), a multi-state corporation that designs and manufactures components for the state’s mining and infrastructure industries.
6.1 Scenario Definition: Aurora Tech Solutions (ATS)
ATS conducts significant R&D activities that satisfy the Federal Four-Part Test (IRC § 41).4
- Federal Data: ATS determines its Federal R&D Credit study results in $3,300,000 in cumulative Qualified Research Expenditures (QREs) over four years (2018-2021). This generated a total calculated federal R&D credit of $330,000.3
- Apportionment: ATS calculates its average Alaska apportionment factor to be 25%, based on Schedule H inputs reflecting in-state sales, property, and payroll.
- Income Base: After completing all adjustments and allocations on Schedule H, ATS determines its Alaska Taxable Income (Form 6000, Schedule A) is $1,500,000, resulting in a pre-credit corporate tax liability of $97,500.
6.2 Step-by-Step R&D Credit Computation (Form 6390 Focus)
The calculation focuses on the process a corporation undertakes to complete Form 6390.
- Determine Alaska Apportioned Federal Credit: The federal credit must first be attributed to Alaska based on the apportionment factor derived from the Schedule H inputs.
- $330,000 (Total Federal Credit) $\times$ 25% (Alaska Apportionment Factor) = $82,500 (Apportioned Federal Credit).
- Apply the 18% Alaska Limitation: The statutory limitation is applied to the apportioned federal credit amount.3
- $82,500 $\times$ 18% = $14,850 (Alaska R&D Tax Credit Claimed on Form 6390).
- Apply Credit to Schedule H-Derived Liability (Form 6000): The $14,850 credit is applied against the current year’s regular tax liability of $97,500, which was computed using the income base defined by Schedule H.
- $97,500 (Liability) – $14,850 (Credit) = $82,650 (Final Alaska Tax Liability).
6.3 Financial Impact Analysis
The $14,850 tax offset represents a direct, dollar-for-dollar reduction in the corporation’s cash tax payment.2 Because the calculated credit ($14,850) is significantly less than the liability ($97,500), the entire credit is utilized in the current year, and no carryforward is necessary. Had ATS’s pre-credit liability been lower (e.g., $10,000), the unused portion ($4,850) would be carried forward, potentially for up to 20 years, safeguarding its long-term value.3
Quantitative Analysis of Alaska R&D Tax Credit Utilization
| Metric | Calculation Detail | Value |
| Total Federal R&D Credit (Cumulative) | Calculated Federal Credit (IRS Form 6765) | $330,000 |
| Alaska Apportionment Factor | Portion of total business activity attributable to Alaska | 25% |
| Alaska Apportioned Federal Credit | $330,000 $\times$ 25% | $82,500 |
| Alaska Credit Rate Limitation | Statutory limit applied to apportioned credit | 18% |
| Alaska R&D Tax Credit Claimed (Form 6390) | $82,500 $\times$ 18% | $14,850 |
| Schedule H Derived Tax Liability | Income tax computed on Form 6000 (before credits) | $97,500 |
| Current Year Tax Savings | Tax Offset Realized | $14,850 |
Conclusion: Maximizing Innovation through Tax Strategy
The strategic application of the Alaska R&D tax credit necessitates a mastery of Alaska’s corporate income tax mechanics, beginning with the calculation of the tax base on Schedule H of Form 6000. Schedule H is the indispensable foundation, defining the corporation’s Alaska taxable income and, by extension, the maximum tax liability available for offset. Failure to accurately compute and potentially maximize this liability on Schedule H risks diminishing the immediate financial return of the non-refundable credit.
The actual claim is meticulously calculated on Form 6390, applying the stringent federal QRE criteria (IRC § 41) and the mandated 18% limitation to the apportioned federal credit amount. Corporations must integrate these two processes seamlessly: first establishing the maximum offset capacity via Schedule H/Form 6000, and second, calculating the precise credit amount on Form 6390.
For corporate tax departments and financial executives, effective compliance requires specialized attention to the legal requirements (the federal Four-Part Test), administrative procedures (filing Form 6390 and attaching federal forms), and the nuanced priority rules governing the application of the credit against the Alaska AMT. By ensuring rigorous documentation and correct procedural sequencing, businesses can leverage this significant incentive to realize a dollar-for-dollar reduction in their Alaska corporate income tax, thereby fostering continued investment in research and development activities crucial for the state’s economic future.
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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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