Alabama Schedule KRCC-I – Income Tax Capital Credit (Recipients’ Share)
Last reviewed: 2025-11-12
Use the Alabama Tax Form Calculator Form AL-40-Schedule-KRCC-I: Alabama Schedule KRCC-I – Income Tax Capital Credit (Recipients’ Share) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Alabama state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Schedule KRCC-I is used by Alabama taxpayers to report their allocated share of the Income Tax Capital Credit from qualifying industrial, commercial, or research projects certified under Alabama’s incentive statutes. The credit rewards new or expanding businesses that create jobs and make substantial capital investments within the state. Taxpayers must attach this schedule to Form 40 or Form 40NR to apply eligible credits against Alabama income tax liability.
The Department of Revenue issues certificates identifying each participant’s approved share of the credit. Schedule KRCC-I captures that information, calculates how much of the credit may be applied in the current year, and tracks any remaining amount available for carryforward up to the statutory limit period.
How to Complete Alabama Schedule KRCC-I
- Project Information (Part I) — Enter the project name, certificate number, and location as shown on the official Capital Credit Certificate of Completion issued by the Alabama Department of Revenue. These details confirm eligibility under the Alabama Capital Credit Act of 1995.
- Taxpayer’s Share of Credit (Part II) — Report your annual allocation and any remaining credit carryforward from prior years. Add these to determine the total available credit. Credits are typically distributed over a 20-year period, depending on the project’s qualification.
- Income Tax Credit Applied (Part III) — Enter the Alabama tax liability from Form 40 or 40NR, then calculate the credit allowable this year. Only the portion that does not exceed current liability may be applied; any excess becomes a carryforward for future tax years.
- Carryforward Tracking — Keep all prior certificates and past KRCC-I schedules for recordkeeping, as ADOR may request verification of unused credit amounts.
| PART I — Project Information | ||
| 1a | Project Name | |
| 1b | Project Number (from certificate) | |
| 1c | Project Location (City/County) | |
| PART II — Taxpayer’s Share of Credit | ||
| 2 | Taxpayer’s share of the credit for this year (from certificate) | |
| 3 | Credit carryforward from prior years | |
| 4 | Total available credit (add lines 2 and 3) | |
| PART III — Income Tax Credit Applied | ||
| 5 | Tax liability to offset (from Form 40 or 40NR) | |
| 6 | Credit allowable this year (lesser of lines 4 or 5) | |
| 7 | Unused credit to carry forward (line 4 − line 6) | |
Understanding the Alabama Income Tax Capital Credit
The Alabama Capital Credit was created to attract long-term business investment by providing a state income tax credit equal to up to 5 % of the qualifying capital investment annually for 20 years. Eligible projects include manufacturing, warehousing, data centers, and certain headquarters or research facilities. The credit applies to both corporate and individual investors or partners receiving pass-through allocations via K-1 forms.
Credits cannot exceed the taxpayer’s income tax liability but may be carried forward until fully utilized within the program’s authorization window. The Alabama Department of Revenue maintains oversight of compliance, requiring annual certification of operational status and employment thresholds.
By using Schedule KRCC-I, taxpayers ensure accurate reporting and compliance with Alabama’s incentive requirements while preserving eligibility for future credit years.
Last reviewed: 2025-11-12: If you believe this form requires an update, please contact us.
Additional Resources
- Form AL-40 Schedule OC – Other Credits
- Form AL-40 – Individual Income Tax Return
- Alabama Department of Revenue – Capital Credit Program
The Capital Credit remains one of Alabama’s most significant tools for economic development, providing tangible benefits to investors who contribute to job creation and infrastructure growth. Completing Schedule KRCC-I ensures your business or investment fully captures its authorized share while maintaining compliance with state tax incentive reporting.
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Frequently Asked Questions
What is Alabama Schedule KRCC-I used for?
Schedule KRCC-I is required for taxpayers who receive a share of the Alabama Capital Credit from qualifying industrial or commercial projects. This credit, established to encourage economic development, allows project investors or pass-through entity members to apply a portion of the approved credit to their Alabama individual income tax. Schedule KRCC-I documents the project name, certificate number, annual credit share, carryforward amounts and the portion being applied to the current year’s income tax liability. The form ensures that taxpayers do not exceed their allowable credit and provides Alabama with an audit trail linking each credit claim to the certified project under the Alabama Capital Credit Act.
What documentation should taxpayers keep to support KRCC-I claims?
Taxpayers must retain the original Alabama Capital Credit certificate, pass-through K-1 statements showing their credit allocation, project approval letters from the Alabama Department of Commerce, prior-year KRCC-I schedules reflecting carryforward balances and the certified project number. Supporting documentation must demonstrate the taxpayer’s ownership interest for each period in which the credit is claimed. While Alabama does not require filing all documents with the return, the Department of Revenue can request them at any time, and incomplete documentation may result in a denied or reduced credit. These records should be retained for the full credit duration, as claims may span up to 20 years.
How are bonuses withheld in Alabama?
Employers may use supplemental methods; totals reconcile on your annual return. Model as supplemental in the calculator.
Any millionaire or surcharge thresholds?
If applicable, they’re reflected in the Alabama bracket table and notes.
What happens if I start making payments late in the year?
If you begin making estimated payments after the first quarter, Alabama allows you to adjust the remaining payments. For example, if you start after April 1, divide the annual amount by three instead of four. The latest possible estimated payment date is January 15 of the following year for income earned in the current year.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.