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41A720–S53 (10–12)

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Commonwealth of Kentucky

DEPARTMENT OF REVENUE

INSTRUCTIONS—SCHEDULE KBI

The KBI tax credit is applied against the corporation income tax imposed by KRS 141.040 and/or the limited liability entity tax

(LLET) imposed by KRS 141.0401. The amount of tax credit against each tax can be different; however, for tracking purposes, the

maximum amount of credit used against either tax is the amount that is used for the tax year.

Bluegrass State Skills Corporation. A corporation approved

PURPOSE OF SCHEDULE—This schedule is used by a

corporation which has entered into an agreement for

for the Kentucky Small Business Investment Credit Program

a Kentucky Business Investment Program (KBI) project

(KSBIC) must attach a copy of the certification from the

Kentucky Economic Development Finance Authority.

to determine the credit allowed against the Kentucky

corporation income tax liability and LLET attributable to the

project in accordance with KRS 141.415.

Alternative Methods — In accordance with KRS 141.415(8),

if the approved company can show that the nature of the

GENERAL INSTRUCTIONS

operations and activities of the approved company are such

that it is not practical to use separate accounting to determine

net income, Kentucky gross receipts or Kentucky gross profits

Part I—Computation of LLET Excluding KBI Project

from the facility at which the project is located, the approved

Line 2—Using Schedule LLET, create a new Schedule LLET to

company shall determine net income, Kentucky gross receipts

compute the LLET of the KBI project using only the Kentucky

or Kentucky gross profits attributable to the project using an

alternative method approved by the Department of Revenue.

gross receipts and Kentucky gross profits of the project. Enter

Thus, if any method other than separate accounting is used, a

“KBI” at the top center of the Schedule LLET and attach it to

the tax return.

copy of the letter from the Department of Revenue approving

the alternative method must be attached to this schedule.

If the corporation has operations other than the KBI project,

* In accordance with KRS 141.415(6)(a), if the project is a

it must attach schedules reflecting the computation of

Kentucky gross profits and Kentucky gross receipts from the

totally separate facility, net income attributable to the

KBI project in accordance with KRS 141.415(6)(b)** or KRS

project shall be determined by the separate accounting

141.415(7)(b).****

method.

** In accordance with KRS 141.415(6)(b), if the project is

Part II—Computation of Taxable Net Income Excluding Net

a totally separate facility, Kentucky gross receipts or

Income from KBI Project and KBI Tax Credit

Kentucky gross profits attributable to the project shall

Section B

be determined under the separate accounting method

reflecting only the Kentucky gross receipts or Kentucky

gross profits directly attributable to the facility.

Line 2—Enter net income from the KBI project. If the

corporation’s only operation in Kentucky is the KBI project,

the amount entered on Line 1 must be entered on Line 2. If

*** In accordance with KRS 141.415(7)(a), if the KBI project

the corporation has operations other than the KBI project,

is an expansion to a previously existing facility, net

income attributable to the entire facility shall be

it must attach schedules reflecting the computation of the

net income from the KBI project in accordance with KRS

determined under the separate accounting method and

141.415(6)(a)* or KRS 141.415(7)(a).***

the net income attributable to the KBI project shall be

determined by apportioning the separate accounting

net income of the entire facility to the KBI project

See form for computation.

income using a formula approved by the Department

of Revenue. A copy of the letter from the Department

Part III—Limitation

of Revenue approving the formula must be attached

Calculate KBI tax credit based on the corporation’s tax

to this schedule.

liability, tax liability attributable to KBI project, and balance of

**** In accordance with KRS 141.415(7)(b), if the KBI project is

approved costs from Schedule KBI-T. Enter credit on Schedule

TCS, Part I, Column E and Column F.

an expansion to a previously existing facility, Kentucky

gross receipts or Kentucky gross profits attributable to

A corporation with more than one economic development

the entire facility shall be determined under the separate

accounting method and the Kentucky gross receipts or

project must separately compute the tax credit derived

from each project. Complete an applicable tax computation

Kentucky gross profits attributable to the KBI project

schedule (Schedule KREDA, Schedule KIDA, Schedule KEOZ,

shall be determined by apportioning the separate

Schedule KJRA, Schedule KIRA, Schedule KJDA, Schedule

accounting Kentucky gross receipts or Kentucky gross

profits of the entire facility to the KBI project Kentucky

KBI, Schedule KRA or Schedule IEIA) for each project. A

gross receipts or Kentucky gross profits. A copy of the

corporation approved for the Skills Training Investment Credit

Act (STICA) or Metropolitan College Consortium Tax Credit

letter from the Department of Revenue approving the

(MCC) must attach a copy of the certification(s) from the

formula must be attached to this schedule.

Form 41a720-S53 Draft - Schedule Kbi - Tax Credit Computation Schedule (For A Kbi Project Of A Corporation) Page 2

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