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.
Quick Access Tools
Frequently Asked Questions
What records should taxpayers keep to document capital gains and losses reported on Schedule D?
Taxpayers should retain brokerage statements, consolidated 1099 forms, purchase confirmations, sale confirmations, cost-basis records, improvement receipts for real property, and depreciation schedules for any assets subject to annual deductions. Alabama audits often focus on basis accuracy and verification of loss carryovers, so keeping documentation for both acquisition and sale is essential. For long-term holdings, records may go back many years and should be stored securely. Even when brokerage firms track basis, taxpayers bear ultimate responsibility for accuracy. Maintaining detailed records ensures clean reporting and reduces the risk of adjustments or disallowed losses during review.
Does sales or property tax affect this page?
This page models income/payroll taxes only; other taxes affect your budget, not paycheck math.
Where can I get help understanding complex allocation scenarios on AL-40NR?
Complex allocation issues—such as multi-state employment, remote work with periodic Alabama presence, cross-border business operations, or shared pass-through ownership—often require careful review to avoid over-reporting or under-reporting Alabama income. You can begin by exploring the detailed nonresident calculator at https://www.taxformcalculator.com/calculator/alabama/al-40nr.html, which helps you model income scenarios and validate your allocation percentages. This tool can be especially helpful for part-year movers who had pay originating in one state while performing duties in another. It also assists in identifying which adjustments and credits need to be prorated. For filers with pass-through entities, rental property, or substantial business activity, methodical use of the calculator can prevent errors that may otherwise lead to amended returns, delayed refunds, or Alabama Department of Revenue inquiries.
Why don’t my brackets match payroll tables?
Employers may use different rounding/timing tables; small variances are normal.
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.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.