Alabama Schedule OC (Other Available Credits) is used to compute and report certain individual income tax credits authorized under Alabama law. Taxpayers must complete Schedule OC and attach it to Form 40 (Resident Return) or Form 40NR (Nonresident Return), as applicable, when claiming eligible credits.
Part A – Credit for Taxes Paid to Other States is available on Form 40 only
The Credit for Taxes Paid to Other States is available only to taxpayers filing Form 40. To claim this credit:
- Complete Schedule CR (Credit for Taxes Paid to Other States).
- Attach a copy of the income tax return filed with the other state or qualifying jurisdiction.
- Attach Form W-2G, when applicable, for gambling winnings taxed by another state.
- Compute the allowable credit using the instructions provided for Schedule CR.
Eligibility Requirements:
- Available only to Alabama residents filing Form 40.
- Applies when the same income is taxed by Alabama and another state or U.S. territory in the same tax year.
- The credit is limited to income that is included in Alabama taxable income and also taxed by the other jurisdiction.
- The credit is generally limited to the amount of Alabama income tax attributable to the double-taxed income.
- Part-year residents may claim the credit only to the extent they are treated as Alabama residents on income taxed by both Alabama and another jurisdiction during the same tax period.
Submission and Filing Requirements
- Schedule OC must be completed and attached to Form 40 or Form 40NR, as applicable.
- Some credits reported on Schedule OC require preapproval, certification, or submission through My Alabama Taxes (MAT), while others require additional supporting documentation.
- Taxpayers must follow the specific instructions and documentation requirements for each credit claimed.
Additional Notes
- Schedule OC is used only to report credits specifically authorized for reporting on the schedule.
- Each credit claimed must meet the eligibility, computation, and documentation requirements provided in Alabama statutes, regulations, and Department of Revenue instructions.
- Nonresidents filing Form 40NR may claim only those credits specifically allowed under Alabama law and the applicable instructions.
Source:
Alabama Department of Revenue – Schedule OC Instructions (Tax Year 2025)
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions. For complex tax situations, consult a CPA or tax attorney.