Instructions And Worksheet For Schedule K-59 - High Performance Incentive Program
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3INSTRUCTIONS FOR SCHEDULE K-59
GENERAL INFORMATION
reported on your Employers’ Quarterly Wage Report and Contribution
Return, Form K-CNS 1001.
Schedule K-59 provides an investment schedule and a carry forward
Line 5: Multiply line 4 by 2% and enter the result.
schedule. Please read all directions before completing this schedule.
Line 6: Subtract line 5 from line 3 and enter the result.
The High Performance Incentive Program (HPIP) provides for two types
Line 7: Enter the amount from line 6 or $50,000, whichever is less. This is
of credits: 1) Training and Education Credit (K.S.A. 74-50,132); and, 2)
the total training and education credit for the amount of cash investment
Investment Tax Credit (K.S.A. 79-32,160a(e)).
made.
Certification from the Kansas Department of Commerce (KDOC) is the
initial requirement for either of the credits and must be maintained with
Line 8: Partners, shareholders, or members must enter their proportionate
your records.
share percentage in the partnership or S corporation. All other
Training and Education Credit. A qualified firm that invests in the
taxpayers enter 100%.
training and education of its employees and pays higher than average
Line 9: Enter on line 9 the lesser of line 7 multiplied by line 8 OR your
wages is eligible to receive a tax credit. The credit is the amount of training
Kansas tax liability. This is the share of the credit for the amount
and education expenditures that exceed 2% of the wages, limited to
invested this year. Enter this amount on the appropriate line of Form K-
$50,000. The credit must be used in the tax year it is earned. There is no
40, Form K-41, Form K-120, or Form K-130.
carry forward provision for this credit.
Apply this credit to your tax liability before any other credits.
Investment Tax Credit. A qualified firm may be eligible to receive a
This amount cannot exceed your tax liability.
10% investment tax credit for investment in excess of $50,000 in a Qualified
Business Facility (QBF). This credit may be carried forward for the next
PART C - HPIP INVESTMENT CREDIT
10 tax years as long as the firm is recertified in the tax year the carry
forward is used. Schedule K-59 must be completed for each QBF in the
Qualified business facility investment is the value of the real and tangible
initial year and, if necessary, for any carry forward year for each location.
personal property, except inventory or property held for sale to customers
in the ordinary course of the taxpayer’s business, which constitutes the
Do not send any enclosures with this credit schedule. If additional
qualified business facility, or which is used by the taxpayer in the operation
information is needed, the Department of Revenue reserves the
of the QBF, during the taxable year for which the HPIP investment tax
right to request it at a later date.
credit is claimed. The value of such property during the taxable year shall
be: (1) its original cost if owned by the taxpayer; or (2) eight times the net
A “qualified firm” is a for-profit business establishment, subject to
annual rental rate if leased by the taxpayer.
state income, sales or property taxes, identified:
All three of the following conditions must be met for property to be
• under the North American Industry Classification System (NAICS)
eligible for the HPIP investment tax credit:
designation 2211 through 2213, major groups 3311 through 3399,
major groups 4231 through 4251, major groups 4811 through 5191,
• Only those expenditures for real and tangible personal property
major groups 5211 through 7213, and major groups 8111 through
made during the certification period will qualify for the credit:
9281; OR
• The property must be capable of being used by the taxpayer or must
• as a corporate or regional headquarters or back-office operation of
be used by the taxpayer in the operation of the QBF during the
a national or multinational corporation regardless of NAICS
certification period (no property classified or defined as construction
designation.
in process); and
A business establishment may be assigned a NAICS designation
• Only that property identified on the capital investment project form
according to the primary business activity at a single physical location in
submitted to KDOC shall be eligible.
Kansas.
Current Year Investment Calculation:
There are additional qualifications to meet the definition of “qualified
firm.” Contact KDOC for information.
The QBF investment for HPIP purposes is computed based on a monthly
A “qualified business facility investment” is the value of the real
average of the HPIP qualified investment made during the certified or
and tangible personal property, except inventory or property held for sale
recertified months that fall within the taxpayer’s tax year. The investment
to customers in the ordinary course of business, which constitutes the
or expenditures must meet the qualifications listed above. This property
qualified business facility. See K.S.A. 79-32,154(e).
will also be present in the property factor for apportionment purposes. The
“Corporate headquarters” is a facility where principal officers of
QBF investment shall be determined by dividing the sum of the total
the corporation are housed and from which direction, management or
cumulative value of such HPIP property on the last business day of each
administrative support for transactions is provided.
full calendar month during the portion of the taxable year during which the
QBF was in operation by the number of full calendar months the QBF is in
LINE BY LINE INSTRUCTIONS
operation.
Base Year Investment Calculation:
PART A – GENERAL INFORMATION
For investment in a QBF, which facility existed and was operated by the
Line 1: Enter the period certified by KDOC.
taxpayer prior to the investment, a base amount of investment will be
Line 2: Enter the certification number received from KDOC.
deducted from the current year’s HPIP investment average. The base shall
PART B – HPIP TRAINING AND EDUCATION CREDIT
consist of the average HPIP investment made by the taxpayer in all prior
years at this QBF. This property will also be present in the property factor
The training and education credit is authorized through the High
for apportionment purposes. The base QBF investment for HPIP purposes
Performance Incentive Program (HPIP) and shall be claimed in the tax year
shall be determined by dividing the sum of the total cumulative value of
for which the company is certified. If the HPIP certification period should
such HPIP property on the last business day of each full calendar month
overlap two tax years, the taxpayer shall have the choice of which tax
during the portion of the prior taxable year during which the QBF was in
year to claim the training and education tax credit.
operation by the number of full calendar months the QBF was in operation.
Line 3: Enter the total qualified business cash investment in the training
Only HPIP QBF investment that is related to the facility will be in the base.
and education of the qualified firm’s employees during the 12-month
Line 10: Enter the street address and city of the qualified business
measurement period specified on your HPIP eligibility form or certification
facility.
letter. Do not include spending used to match the state’s Kansas
Lines 11a through 11l:
Industrial Retraining (KIR) program.
Column (1) – Filing Period: Enter the months in the order of the filing
Line 4: Enter the total dollar amount expended for payroll costs for both
period being used by the legal entity.
full time and part time positions. This should correspond to the amount
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