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Alaska Passive Activity Limitation Instructions
Extracted from PDF file 2023-alaska-form-6395i.pdf, last modified February 2019Passive Activity Limitation Instructions
Instructions for Form 6395 Alaska Passive Activity Limitation GENERAL INSTRUCTIONS Purpose of Form Form 6395 limits federal-based credits from passive activities, and supports Form 6390 Alaska federal-based credits. This form is required if such credits are to be claimed on Form 6000, 6100, or 6150. Under AS 43.20.021(d), where a credit allowed under the Internal Revenue Code is also allowed in computing Alaska income tax, it is limited to 18% of the amount of credit determined for federal income tax purposes and apportioned, if applicable Adoption Of The Internal Revenue Code Under AS 43.20.021, Alaska adopts the Internal Revenue Code, Sections 1–1399 and 6001–7872, with full force and effect, unless excepted to or modified by provisions of Alaska law. In addition, AS 43.20.160 and AS 43.20.300 require the Department to apply, as far as practicable, the administrative and judicial interpretations of the federal income tax law. Note that Alaska law does not adopt Internal Revenue Code Sections 1400–1400U, which grant tax benefit for activities in certain geographic zones, including those in “Enterprise Zones” and “Gulf Opportunity Zones.” If the taxpayer qualifies for special federal treatment under these code sections, this may require that the taxpayer recompute some federal-based credits for Alaska purposes. Other Related Forms Form 6390 is required to claim credits reported on Form 6395. Both forms are required to be attached to Form 6000, 6100, or 6150 to claim such federal-based credits. If You Need Help If you have questions, need additional information or require other assistance, see the DOR’s website at www.tax.alaska.gov, or call: Juneau: 907-465-2320 Anchorage: 907-269-6620 SPECIFIC INSTRUCTIONS Line 2a: Alaska allows the federal investment credit only to the extent attributable to Alaska property. See AS 43.20.036(b). On line 2a enter the amount of federal investment credit, attributable to passive activities, that is not attributable to Alaska property. Line 2b: Alaska does not allow credits for backup withholding, credit for employer social security and Medicare taxes paid on certain employee tips, and other federal credits that are tax reimbursements. See 15 AAC 20.145(f). Also note that Alaska does not adopt Internal Revenue Code Sections 1400–1400U, which may affect allowable federal-based credits. Lines 5a–5c: These are federal “specified credits” from a passive activity that are not allowable for Alaska purposes. See instructions for Lines 2a and 2b above. Line 7: This amount is the total potential federal-based credits, before 18% limitation and before apportionment, subject to the tax limitation. Line 8: Enter the apportionment factor from the applicable Schedule I from Form 6000, 6100, or 6150. Line 11: Enter the unallowed passive activity credits from the previous years, after the 18% limitation and post-apportionment (using the apportionment factor in the year generated). Attach a schedule of each credit, by year generated and used. Line 12: This is the amount of federal-based credits (after 18% limitation and apportionment) subject to the Alaska tax limitation. Line 13: Calculate the Alaska tax attributable to net passive income and net active income, by applying federal rules explained in the instructions for line 7 of the federal Form 8810, on an as-if Alaska basis. Use the Alaska income tax rates in AS 43.20.011, when calculating “tax attributable” amounts. In place of federal “income tax before credits,” use the Alaska regular income tax (Schedule D, line 7 of Form 6000, 6100, or 6150) less Alaska incentive credits allowed against regular tax (from Form 6390, line 12b). Line 14: The amount of unallowed passive activity credits on line 14 must be allocated to the credit baskets (general business credits, “specified credits,” and eligible small business credits). This is done for each credit basket, based on a ratio of credits before tax limitation. Complete Worksheets A and B below to allocate the credits. (The amount on line 14 is after 18% limitation and apportionment, if applicable.) Line 15: The amount of allowed passive activity credits on line 15 must be allocated to the credit baskets (general business credits, “specified credits,” and eligible small business credits). This is done for each credit basket, based on a ratio of credits before tax limitation. Complete Worksheets A and B below to allocate the credits. (The amount on line 15 is after 18% limitation and apportionment, if applicable.) Line 16: The purpose of line 16 is to gross up the credits on line 15 to an amount that is pre-18% and pre-apportionment, if applicable (“gross”). Line 17: Enter the amount of allowed passive general business credits (at “gross”) from Worksheet B below, here and on Form 6390, line 4. Line 18: Enter the amount of allowed passive “specified credits” and eligible small business credits (at “gross”) from Worksheet B below, here and on Form 6390, line 21. 0405-6395i Rev 02/05/19 - page 1 Instructions for Worksheet A below The purpose of Worksheet A is to calculate the total potential passive federal-based credits, at “gross” (pre-apportionment and pre-18%). Column A: Complete column A using amounts from Form 6395, as indicated. These amounts are “gross” (pre-apportionment and pre-18%). Column B: Enter amounts of previously unallowable passive federal-based credits, by basket, at “gross.” Column C: Add columns A and B. Carry these amounts to Worksheet B, column A. Worksheet A to calculate total potential passive federal-based credits credit basket from Form 6395 1 general business credits line 3 2 “specified credits” line 6 prior year unallowed B current year A total potential credits C 3 totals Instructions for Worksheet B below The purpose of Worksheet B is to allocate allowable and unallowable passive federal-based credits to each credit basket. Column A: Enter the amounts from Worksheet A, column C, by basket. Column B: Divide the amount of each of the credit baskets in column A by the total of all credits in Column A. The total of the ratios should equal 1.00. Column C: Multiply line 14 of Form 6395 by the ratios in column B and enter the results in column C. These are the unallowed passive federal-based credits for the tax year, and are on a “gross” basis. Keep a record of these amounts, so the credits can be carried to the next year. Column D: Subtract column C from column A. These are the allowed credits for the tax year, stated on a “gross” basis. Enter amounts in this column on Form 6395, as indicated. Worksheet B to allocate allowed passive federal-based credits credit basket total potential credits A ratio B unallowed credits C allowed credits D Form 6395 reporting 1 general business credits line 17 2 “specified credits” line 18 3 totals 0405-6395i Rev 02/05/19 - page 2
Form 6395i
More about the Alaska Form 6395i Corporate Income Tax TY 2023
Passive Activity Limitation Instructions
We last updated the Passive Activity Limitation Instructions in February 2024, so this is the latest version of Form 6395i, fully updated for tax year 2023. You can download or print current or past-year PDFs of Form 6395i directly from TaxFormFinder. You can print other Alaska tax forms here.
Other Alaska Corporate Income Tax Forms:
TaxFormFinder has an additional 30 Alaska income tax forms that you may need, plus all federal income tax forms.
| Form Code | Form Name |
|---|---|
| Form 6000 | Alaska Corporation Net Income Tax Return |
| Form 6000i | Forms 6000 and 6020 (Formerly Forms 611 and 611SF) Alaska Corporation Net Income Tax Return Instructions |
| Form 6100 | Oil and Gas Corporation Net Income Tax Return |
| Form 6240 | Payment Voucher-Corporation Net Income Tax |
| Form 6220i | Underpayment of Estimated Tax by Corporations Instructions |
View all 31 Alaska Income Tax Forms
Form Sources:
Alaska usually releases forms for the current tax year between January and April. We last updated Alaska Form 6395i from the Department of Revenue in February 2024.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Alaska Form 6395i
We have a total of ten past-year versions of Form 6395i in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
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