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Valid for companies paying Corporate Income Tax, Insurance Premium Tax/Title Insurance Premium Tax, Mining License Tax, Oil & Gas Property Tax, Oil & Gas Production & Transportation Tax, and Fisheries Business Tax, and/or Fisheries Resource Landing Tax in the State of Alaska.

NEW Alaska Education Tax Credit Benefits beginning January 1, 2011 till December 31, 2018

The legislature expanded the Alaska Higher Education Tax Credit to increase the credit amount for corporations making contributions in support of education. The revised law will allow companies to take up to a $5 million tax credit when they support the University of Alaska.

In addition to receiving the Alaska Education Tax Credit with a donation to the University of Alaska, businesses may also qualify for additional tax savings at the federal level.

State tax credit:

o    50% of contributions up to $100,000

o    100% of contributions $100,001 - $300,000

o    50% of contributions $300,001 - $10,000,000

o    Total claimed Alaska Education Tax Credits may not exceed $5,000,000

Gift Amount
Alaska Educational Tax Credit Estimated Federal Tax Benefit*
Total Tax Savings (State and Federal)
Net cost of Donation
$10,000 $5,000 $1,750 $6,750 $3,250
$50,000 $25,000 $8,750 $33,750 $16,250
$100,000 $50,000 $17,500 $67,500 $32,500
$200,000 $150,000 $17,500 $167,500 $32,500
$300,000 $250,000 $17,500 $267,500 $32,500
$400,000 $300,000 $35,000 $335,000 $65,000
$500,000 $350,000 $52,500 $402,500 $97,500
$1,000,000 $600,000 $140,000 $740,000 $260,000
$9,800,000 $5,000,000 $1,680,000 $6,680,000 $3,120,000
 

*Assumes a federal tax rate of 35%. This calculation is simplified and actual results may vary depending upon the unique circumstances of each taxpayer. Please contact your tax consultant for further information.

 
 

Example of application of the Alaska Education Tax Credit to multiple taxes: XYZ Corporation wishes to make a $1 million gift to the University. XYZ Corporation pays State of Alaska Income Taxes and Oil &Gas Production Tax—they could claim a $300,000 credit on State of Alaska Income Tax AND claim $700,000 on Oil & Gas Production Tax. The formula of 50% of contributions up to $100,000; 100% of contributions $100,001- $300,000; and 50% of contributions $300,001 - $10,000,000 would be applied to EACH credit claimed.

 
 

BOTTOM LINE – THE NET COST TO THE DONOR TO MAKE A $1M GIFT IS $260,000.

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