Alaska's Education Tax Credit
Get the ULTIMATE ROI on your investment in Alaska's future! The Alaska Educational Tax Credit allows corporations to take up to a $5 million tax credit when they support the University of Alaska campuses like KPC. This legislation applies to accredited Alaska two-year or four-year colleges, secondary school level vocational education courses, programs, and facilities. The tax credit is designed to allow companies or corporations an opportunity to lessen their tax burdens while at the same time benefiting the University of Alaska. Companies who pay any of the following taxes can realize a substantial tax savings:
- Corporate Income Tax
- Insurance Premium Tax/Title Insurance Premium Tax
- Oil and Gas Production and Transportation Tax
- Oil and Gas Property Tax
- Fisheries Business Tax and/or Fisheries Landing Tax
- Mining License Tax
A company who owes any of these taxes has the option of making a contribution to the University Foundation and claim the Alaska Educational Tax Credit for up 50 percent of the first $100,000 of a gift, and up to 100 percent of the next $100,001-$300,000 of the donation. For donations $300,001-$10,000,000, 50 percent is eligible for the AETC, up to a maximum of $5 million in any one tax year.
- A company owes the state of Alaska $300,000 in taxes (any of the taxes listed above)
- The company claims $250,000 using the Alaska Educational Tax Credit against their tax liability of (50 percent of the first $100,000 plus 100 percent of the remaining $200,000 of the gift to the University)
- BOTTOM LINE: The University has greatly benefited from the $300,000 gift and the company's tax bill has been reduced from $300,000 to only $32,500*
*The Federal Tax Savings for the charitable contribution is calculated using an assumed marginal tax rate of 35%. This calculation is simplified and actual results may vary depending upon the unique circumstances of each taxpayer. Contact your tax adviser or the State of Alaska Department of Revenue for further information.