Schedule KRCC-B: Recipient’s Share Of Capital Credit For Business Entities, Including Trusts (Revision)

Who files this form

Schedule KRCC-B is for business entities, including trusts, that receive a share of capital credit. It calculates the recipient’s Alabama tax liability generated by the qualifying project.

Complete a separate Schedule KRCC-B for each project and attach it to the income tax return along with Form K-RCC received from the distributing entity.

Do not use Schedule KRCC-B if the taxpayer is the project entity.

What you'll need

• Form K-RCC from the distributing entity: Part III, line 3 supplies the recipient’s share of project income in Alabama. Part III, line 5 supplies the recipient’s share of available capital credit.
• Recipient and project details: Recipient’s name and FEIN, project number, project entity name, project’s placed-in-service date, and distributing entity’s name and FEIN.
• Recipient’s Alabama income tax return: Needed for income and tax liability amounts when using the allocation method.
• Returns for the with/without method: Complete two federal and two Alabama income tax returns through the tax liability line, with and without project income as directed. Keep the second returns for audit purposes; do not file them with the first returns.

How to file

Complete Schedule KRCC-B for each project. Enter the recipient and project information, then calculate the capital credit in Part III.

• If using the allocation method, complete Part IV and carry its line 5 amount to Part III, line 2.
• If using the with/without method, follow the two-step calculation printed on the form.
• On Part III, line 4, enter the lesser of line 2, the tax liability generated by project income, and line 3, the available capital credit.

Attach both Schedule KRCC-B and the Form K-RCC received from the distributing entity to the income tax return. The text does not provide a mailing address or e-file directions.

Common mistakes

• Do not use this schedule if the taxpayer is the project entity.
• Do not combine projects on one schedule. Complete a separate Schedule KRCC-B for each project.
• Remember to attach both Form K-RCC and Schedule KRCC-B to the income tax return.
• Complete Part IV only when using the allocation method.
• Under the with/without method, keep the second returns for audit purposes. Do not file them with the first returns.

Questions people ask

How much capital credit can be applied to the recipient’s tax liability?

Enter the lesser of the Alabama tax liability generated by project income and the recipient’s share of capital credit available for the tax year.

How is the allocation percentage calculated?

Divide the recipient’s share of project income in Alabama by the recipient’s total income entered in Part IV. If project income is greater than total income, enter 100%.

What income goes on Part IV, line 2?

Use the recipient’s total income from the Alabama income tax return. For a C corporation, enter Alabama income before the federal income tax deduction. For a fiduciary or estate, add Alabama taxable income and total ESBT income.

What does the with/without method involve?

First, complete two federal returns through the tax liability line: one including project operations income and a second excluding project income in Alabama. Then complete two Alabama returns on the same basis, using the applicable federal income tax deduction from the federal calculations. The difference between the Alabama tax liabilities is the tax liability generated by project income. The form gives separate calculation rules for members of consolidated filing groups.

Official sources

• https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25schkrccb.pdf