INT-2: Report of Investment in Project for Income Tax Capital Credit (Revision)

Who files this form

The project entity uses Form INT-2 to report the actual capital costs of a qualifying project and the date it was placed in service for Alabama’s income tax capital credit.

The project entity’s filing covers all shareholders, partners, members, owners, or beneficiaries of the investing companies who are entitled to the credit. The entity qualifying for the credit must meet the capital credit requirements.

For a joint venture, a legal project entity must be created so the investing companies can receive the credit.

What you'll need

Have these records and details ready:

• Project information: The project number assigned by the Alabama Department of Revenue, project and entity names, FEIN, addresses, contact information, filing status, and NAICS code where required.
• Project description and service date: Describe the activities and every phase, if applicable. Attach extra sheets if needed.
• Actual capital costs: Include building, land, equipment, architectural and engineering, landscaping, and other costs.
• Asset depreciation schedule: This required attachment must show each asset’s description, in-service date, and cost.
• Employee list: Attach a list of all employees working at the project, showing each employee’s name, Social Security number, hire date, termination date if applicable, and average hourly wage.
• Credit allocations: Provide every participant entitled to the credit, with their name, address, Social Security number or FEIN, and percentage allocation. Attach extra sheets if needed.
• Facility closure details, if applicable: Provide the closure date, employee count at closure, and facility location.

How to file

File Form INT-2 after the project has been placed in service and its actual capital costs are known.

Complete the project information, cost and employment entries, and participant allocations. Attach the supporting schedules and lists. An authorized person must sign and enter their title and the date.

Mail the completed form to:

Alabama Department of Revenue

ATTN: Capital Credit Program Administrator

P.O. Box 327001

Montgomery, AL 36132-7001

For questions about the form or capital credit, call (334) 242-1175.

Common mistakes

• Leaving out the assigned project number. The form requires the number originally assigned by the Alabama Department of Revenue.
• Selecting more than one filing status. Check only one project filing status.
• Reporting only part of a phased project. Describe every phase, include the actual costs of all phases, and use the date the last phase was placed in service. The credit does not begin until that last phase is in service, and earlier tax liability is not subject to the credit.
• Omitting the depreciation schedule. It is required to verify project costs.
• Leaving participants off the allocation list. Provide a complete list of everyone entitled to receive the capital credit.

Questions people ask

How is the annual credit calculated?

Multiply total actual project costs on line 6a by 5%. This is the maximum annual credit available against income tax or financial institution excise tax liability generated by the qualifying project, as applicable, for 20 years beginning in the year the project is placed in service.

What does “placed in service” mean?

It is the earlier of the date the project’s depreciation period begins or the date the project begins a specifically designed function for producing revenue. For a phased project, enter the date the last phase was placed in service.

Which entity should a single-member LLC list?

If the LLC elects corporate treatment for federal tax purposes, enter the LLC as the project entity. If it is treated as a disregarded entity, enter its parent as the project entity and the LLC’s name as the project name.

Can a project keep its Favored Geographic Area status if the county loses that designation?

Yes. The designation is determined when Form INT is filed. A qualifying project keeps that status even if the county later loses it, as long as the project otherwise remains in compliance with the law.

Official sources

• https://www.revenue.alabama.gov/wp-content/uploads/2021/10/INT2-1.pdf