The Coal Credit, as amended by Act 2023-546 and authorized under Section 40-18-220, enables eligible taxpayers to annually allocate all or a portion of the coal credit to offset their state income taxes, utility taxes paid, or a combination thereof, along with their partners or members (if part of a pass-through entity).
Prerequisites for filing an online Coal Credit claim through My Alabama Taxes:
- An eligible taxpayer engaged in coal production in Alabama submitting a credit claim for tax years 2023 and beyond or.
- Letter from ALDOR directing a company that has been allocated a coal credit to submit an allocation schedule via My Alabama Taxes.
Procedures for Coal producers filing an online Coal Credit Claim through My Alabama Taxes (for tax years 2023 and after):
If you are coal producer filing as a pass-through entity:
- Log in to My Alabama Taxes.
- Once logged in, navigate to the Pass-through Entity under the Accounts tab.
- Click on the Submit a Credit Claim link under Tax incentives and complete the following required fields:
Credit Type – Select Coal Credit from the drop-down menu.
Filing Period – Enter the tax period in which the Coal Credit is being claimed.
Check the box for “Coal producer”. Note! As a coal producer, you must check this box to provide the necessary information for calculating the eligible coal credit for this filing period.
Total tons of Alabama coal produced in the current year – Enter the total tons of coal produced in Alabama during the tax year for which you are filing the credit claim.
Total tons of Alabama coal produced on the base year (or established base year) – Enter the total tons of coal produced in Alabama in the base year.
Base year – If using different base year than 1994, enter the applicable base year in this field. If you specify a base year other than 1994, please be advised that a coal producer must establish the base year by producing Alabama coal for 12 consecutive months in a calendar year.
Coal credit allocated to utility tax – Enter the amount of coal credit that you plan to allocate towards the utility taxes paid. The amount of coal credit you intend to allocate towards utility taxes paid. Note! If you enter an amount here, you must follow additional steps outlined in the Coal Credit Utility Procedures available at Instructions for Claiming the Coal Credit Against Utility Taxes to receive the utility refund.
Coal credit allocated to owners – Enter the amount of coal credit you plan to allocate to your owners. You can either use the owner information spreadsheet to upload the owner details or fill out the owner information table below to allocate the credit.
Attachments – The following attachments are required:
Supporting documentation verifying the coal production in both the base year and the tax year for which you are seeking the coal credit. Failure to attach complete documentation will result in the credit claim to be rejected.
If you are a coal producer filing as a C-Corporation:
- Log in to My Alabama Taxes.
- Once logged in, navigate to the Business Income Tax under the Accounts tab.
- Click on the Submit a Credit Claim link under Tax incentives and complete the following required fields:
Credit Type – Select Coal Credit from the drop-down menu.
Filing Period – Enter the tax period in which the Coal Credit is being claimed.
Total tons of Alabama coal produced in the current year – Enter the total tons of coal produced in Alabama during the tax year for which you are filing the credit claim.
Total tons of Alabama coal produced on the base year (or established base year) – Enter the total tons of coal produced in Alabama in the base year.
Base year – If using different base year than 1994, enter the applicable base year in this field. If you specify a base year other than 1994, please be advised that a coal producer must establish the base year by producing Alabama coal for 12 consecutive months in a calendar year.
Coal credit allocation to income tax – Enter the amount of coal credit that you plan to allocate to income tax.
Coal credit allocated to utility tax – Enter the amount of coal credit that you plan to allocate towards the utility taxes paid. The amount of coal credit you intend to allocate towards utility taxes paid. Note! If you enter an amount here, you must follow additional steps outlined in the Coal Credit Utility Procedures available at Instructions for Claiming the Coal Credit Against Utility Taxes to receive the utility refund.
Attachments – The following attachments are required:
Supporting documentation verifying the coal production in both the base year and the tax year for which you are seeking the coal credit. Failure to attach complete documentation will result in the credit claim to be rejected.
Please review the information in full and submit the online allocation schedule. Once the annual allocation has been made, the allocation cannot be amended. Any unused credit associated with the annual allocation can be carried forward for up to five years.
What to expect after submitting the coal credit through MAT:
- Once the Coal Credit claim is submitted through My Alabama Taxes, ALDOR will review the claim. The Office of Economic Development may require additional information if the supporting documents are incomplete or not provided. Please note that lack of proper documentation to support the credit claim will delay the process.
- Once ALDOR approves the requested credit amount, the taxpayer will receive a web notice.
- If you allocated a portion of the credit to utility taxes, please follow the instructions outlined here Instructions for Claiming the Coal Credit Against Utility Taxes
- If you have allocated a credit to another business entity, they are required to complete their own coal credit allocation before they can claim the credit
Procedures for a pass-through entity that has been allocated Coal Credit (for tax years 2023 and after):
- Log in to My Alabama Taxes.
- Once logged in, navigate to the Pass-through Entity under the Accounts tab.
- Click on the Submit a Credit Claim link under Tax incentives and complete the following required fields:
Credit Type – Select Coal Credit from the drop-down menu.
Filing Period – Enter the tax period in which the Coal Credit is being claimed.
Coal producer box – DO NOT check this box. This is intended for coal producers only and does not apply to your credit claim.
Total credit sought in the current year – enter the allocated amount as stated in the letter you received from ALDOR regarding your coal credit allocation.
Coal credit allocated to utility tax – Enter the amount of coal credit that you plan to allocate towards the utility taxes paid. The amount of coal credit you intend to allocate towards utility taxes paid. Note! If you enter an amount here, you must follow additional steps outlined in the Coal Credit Utility Procedures available at Instructions for Claiming the Coal Credit Against Utility Taxes to receive the utility refund.
Coal credit allocated to owners – Enter the amount of coal credit you plan to allocate to your owners. You can either use the owner information spreadsheet to upload the owner details or fill out the owner information table below to allocate the credit.
Attachments – The following attachment is required:
Letter from ALDOR instructing you to submit an allocation schedule through My Alabama Taxes for the allocated coal credit. Note! Failure to attach this letter will result in automatic rejection of your credit claim.
Please review the information in full and submit the online allocation schedule. Once the annual allocation has been made, the allocation cannot be amended. Any unused credit associated with the annual allocation can be carried forward for up to five years.
What to expect once you have submitted the credit claim through MAT:
- Once the Coal Credit claim is submitted through My Alabama Taxes, ALDOR will review the claim. The Office of Economic Development may require additional information if the supporting documents are incomplete or not provided. Please note that lack of proper documentation to support the credit claim will delay the process.
- Once ALDOR approves the requested credit amount, the taxpayer will receive a web notice. If approved by ALDOR, the allocation cannot be amended.
- If you allocated a portion of the credit to utility taxes, please follow the instructions outlined here Instructions for Claiming the Coal Credit Against Utility Taxes
- If you have allocated a credit to another business entity, they are required to complete their own coal credit allocation before they can claim the credit.
Procedures for a C-Corporation that has been allocated Coal Credit (for tax years beginning on and after 2023):
If you are a C-Corporation that has been allocated a coal credit, please email the Office of Economic Development at incentives@revenue.alabama.gov with the following information:
- The tax year for which you are eligible to claim the coal credit–
- The amount of coal credit to be allocated to income tax– $
- The amount of coal credit to be allocated to utility taxes paid – $
Required attachment: Letter from ALDOR notifying you of your coal credit allocation. Note! Failure to attach this letter will result in automatic rejection of your credit claim.
What to expect after submitting the information above:
- You will receive an email response confirming the approval of the allocation submitted.
- Once the annual allocation has been made and approved by ALDOR, the allocation cannot be amended. Any unused credit associated with the annual allocation can be carried forward for up to five years.
- If you allocated a portion of the credit to utility taxes, an additional step is required on your end. Please refer to the instructions provided here: Instructions for Claiming the Coal Credit Against Utility Taxes.
Additional Information