Enlarge image
Instructions for Form 6395
Alaska Passive Activity Limitation
GENERAL INSTRUCTIONS Lines 5a–5c: These are federal “specified credits” from a
passive activity that are not allowable for Alaska purposes. See
Purpose of Form instructions for Lines 2a and 2b above.
Form 6395 limits federal-based credits from passive activities,
and supports Form 6390 Alaska federal-based credits. This Line 7: This amount is the total potential federal-based credits,
form is required if such credits are to be claimed on Form 6000, before 18% limitation and before apportionment, subject to the
6100, or 6150. Under AS 43.20.021(d), where a credit allowed tax limitation.
under the Internal Revenue Code is also allowed in computing
Alaska income tax, it is limited to 18% of the amount of credit Line 8: Enter the apportionment factor from the applicable
determined for federal income tax purposes and apportioned, Schedule I from Form 6000, 6100, or 6150.
if applicable
Line 11: Enter the unallowed passive activity credits from the
previous years, after the 18% limitation and post-apportionment
Adoption Of The Internal Revenue Code (using the apportionment factor in the year generated). Attach
Under AS 43.20.021, Alaska adopts the Internal Revenue a schedule of each credit, by year generated and used.
Code, Sections 1–1399 and 6001–7872, with full force and
effect, unless excepted to or modified by provisions of Alaska Line 12: This is the amount of federal-based credits (after 18%
law. In addition, AS 43.20.160 and AS 43.20.300 require the limitation and apportionment) subject to the Alaska tax
Department to apply, as far as practicable, the administrative limitation.
and judicial interpretations of the federal income tax law.
Line 13: Calculate the Alaska tax attributable to net passive
Note that Alaska law does not adopt Internal Revenue Code income and net active income, by applying federal rules
Sections 1400–1400U, which grant tax benefit for activities explained in the instructions for line 7 of the federal Form 8810,
in certain geographic zones, including those in “Enterprise on an as-if Alaska basis. Use the Alaska income tax rates in
Zones” and “Gulf Opportunity Zones.” If the taxpayer qualifies AS 43.20.011, when calculating “tax attributable” amounts. In
for special federal treatment under these code sections, this place of federal “income tax before credits,” use the Alaska
may require that the taxpayer recompute some federal-based regular income tax (Schedule D, line 7 of Form 6000, 6100, or
credits for Alaska purposes. 6150) less Alaska incentive credits allowed against regular tax
(from Form 6390, line 12b).
Other Related Forms
Form 6390 is required to claim credits reported on Form 6395. Line 14: The amount of unallowed passive activity credits on
Both forms are required to be attached to Form 6000, 6100, or line 14 must be allocated to the credit baskets (general business
6150 to claim such federal-based credits. credits, “specified credits,” and eligible small business credits).
This is done for each credit basket, based on a ratio of credits
If You Need Help before tax limitation. Complete Worksheets A and B below
If you have questions, need additional information or require to allocate the credits. (The amount on line 14 is after 18%
other assistance, see the DOR’s website at limitation and apportionment, if applicable.)
www.tax.alaska.gov, or call:
Line 15: The amount of allowed passive activity credits on line
Juneau: 907-465-2320 15 must be allocated to the credit baskets (general business
Anchorage: 907-269-6620 credits, “specified credits,” and eligible small business credits).
This is done for each credit basket, based on a ratio of credits
before tax limitation. Complete Worksheets A and B below
SPECIFIC INSTRUCTIONS
to allocate the credits. (The amount on line 15 is after 18%
limitation and apportionment, if applicable.)
Line 2a: Alaska allows the federal investment credit only to
the extent attributable to Alaska property. See AS 43.20.036(b).
On line 2a enter the amount of federal investment credit, Line 16: The purpose of line 16 is to gross up the credits on
line 15 to an amount that is pre-18% and pre-apportionment, if
attributable to passive activities, that is not attributable to
applicable (“gross”).
Alaska property.
Line 2b: Alaska does not allow credits for backup withholding, Line 17: Enter the amount of allowed passive general business
credits (at “gross”) from Worksheet B below, here and on Form
credit for employer social security and Medicare taxes paid
6390, line 4.
on certain employee tips, and other federal credits that are tax
reimbursements. See 15 AAC 20.145(f). Also note that Alaska
does not adopt Internal Revenue Code Sections 1400–1400U, Line 18: Enter the amount of allowed passive “specified credits”
and eligible small business credits (at “gross”) from Worksheet
which may affect allowable federal-based credits.
B below, here and on Form 6390, line 21.
0405-6395i Rev 02/05/19 - page 1
