Can Companies Claim
R&D Tax Credits in Alaska?
Businesses that claim federal tax credits may also apply a portion of those credits to reduce their Alaska corporate net income tax, subject to certain exceptions. Alaska allows a credit equal to 18% of the federal credit earned from in-state activities, including R&D. This credit directly reduces Alaska tax liabilities. For a full list of eligible federal-based credits, see IRC § 38.
Businesses operating both inside and outside Alaska must apportion credits based on in-state federal credits.
Credits linked to Alaska cannot be applied to Alaska alternative minimum tax or other taxes.
Unused credits can be carried back one year and forward for up to 20 years.
Companies must file Alaska Form 6390, Alaska Federal-Based Credits, with their state tax return in order to claim the credit.
Alaska R&D Tax Credit Example
An Anchorage company that designs and manufactures components for the oil and gas sector claims federal R&D credits for annual engineering projects.A multi-year project earned the company a $330,000 federal R&D credit and an additional $59,400 in Alaska state credits.
| Year | Total QREs | Credit | Federal Credits | Alaska Credit |
|---|---|---|---|---|
| 2024 | $1,300,000 | $130,000 | $130,000 | $23,400 |
| 2023 | $900,000 | $90,000 | $90,000 | $16,200 |
| 2022 | $650,000 | $65,000 | $65,000 | $11,700 |
| 2021 | $450,000 | $45,000 | $45,000 | $8,100 |
| Total | $3,300,000 | $330,000 | $330,000 | $59,400 |
Federal R&D Tax Credit Summary
| Year | Total QREs | Federal Credit |
|---|---|---|
| 2024 | $1,300,000 | $130,000 |
| 2023 | $900,000 | $90,000 |
| 2022 | $650,000 | $65,000 |
| 2021 | $450,000 | $45,000 |
| Total | $3,300,000 | $330,000 |
Alaska R&D Tax Credit Summary
| Year | Alaska Credit |
|---|---|
| 2024 | $23,400 |
| 2023 | $16,200 |
| 2022 | $11,700 |
| 2021 | $8,100 |
| Total | $59,400 |
Qualifying Research Activities
The four-part test that defines what counts as qualified research activities under
the R&D Tax Credit program
Purpose of the Research
The activity should develop or improve a business component, such as a product, process, software, formula, technique, or invention, by enhancing functionality, performance, reliability, or quality.
Resolving Uncertainty
The work must address technical uncertainties, such as determining the optimal design, method, or approach to achieve the desired outcome. The results should not be known in advance.
Systematic Experimentation
Eligible research must follow a structured experimentation process, including trial and error, modeling, simulation, or testing alternatives to reach the intended improvement.
Technological Basis
The activity should develop or improve a business component, such as a product, process, software, formula, technique, or invention, by enhancing functionality, performance, reliability, or quality.
Why the R&D Tax Credit Matters ?
Since 1981, the R&D Tax Credit has helped businesses save billions in federal and state taxes. The credit enables companies to hire more staff, expand R&D, invest in facilities, and drive innovation. Thousands of businesses across multiple industries take advantage of this benefit each year.