Schedule J (Form 740) - Kentucky Farm Income Averaging - 2011 Page 2
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2SCHEDULE J (Form 740) 2011
Page 2
42A740-J
Instructions for Schedule J
Purpose of Form—Use Form Schedule J to elect to figure your
Line 8—Compute the tax on line 7 using the 2008 tax table or
2011 Kentucky income tax by averaging, over the previous 3
by using the tax rate schedule above.
years, all or part of your 2011 Kentucky taxable income from
your trade or business of farming or fishing. This election
Line 9—If you used Schedule J to figure your tax for:
may give you a lower tax if your 2011 Kentucky income from
farming or fishing is high and your taxable income for one or
2010 (that is, you entered the amount from the 2010
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more of the 3 prior years was low.
Schedule J, line 22 on line 12 of your 2010 Form 740), enter
on line 9 the amount from your 2010 Schedule J, line 15.
Important Reminders when completing Kentucky Schedule J:
2009 but not 2010, enter on line 9 the amount from your
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You must file a federal Schedule J in order to complete a
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2009 Schedule J, line 3.
Kentucky Schedule J.
Otherwise, enter the taxable income from your 2009 Form 740,
Use Kentucky figures when completing Kentucky Schedule J.
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line 11 or Form 740-EZ, line 3. If the amount entered is zero or
If income from another state is included in the elected
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less, see federal instructions.
farm income on line 2, you must also compute the tax
without the other state’s income to determine the state tax
Line 12—Compute the tax on line 11 using the 2009 tax table or
limitation for credit for tax paid to other states.
by using the tax rate schedule above.
You may need copies of your original or amended income
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Line 13—If you used Schedule J to figure your tax for:
tax returns for 2008, 2009 and 2010 to figure your tax on
Kentucky Schedule J.
2010 (that is, you entered the amount from the 2010
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Schedule J, line 22 on line 12 of your 2010 Form 740), enter
Keep a copy of your 2011 income tax returns to use for
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on line 13 the amount from your 2010 Schedule J, line 3.
your income averaging in 2012, 2013 or 2014.
For definitions of farming business, fishing business and
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Otherwise, enter the taxable income from your 2010 Form 740,
elected farm income, see federal instructions.
line 11 or Form 740-EZ, line 3. If the amount entered is zero or
less, see federal instructions.
Compute your tax using the Tax Table for the appropriate
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year or use the following tax rate schedule.
Line 16—Compute the tax on line 11 using the 2010 tax table or
by using the tax rate schedule above.
If taxable income is:
Tax before credit is:
Line 18—If you used Schedule J to figure your tax for:
$
0
–
$ 3,000
2% of taxable income
$ 3,001
–
$ 4,000
3% of taxable income minus $30
$ 4,001
–
$ 5,000
4% of taxable income minus $70
2010, enter the amount from your 2010 Schedule J, line 12.
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$ 5,001
–
$ 8,000
5% of taxable income minus $120
$ 8,001
–
$ 75,000
5.8% of taxable income minus $184
2009 but not 2010, enter the amount from your 2009
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$ 75,001 and up 6% of taxable income minus $334
Schedule J, line 16.
2008 but not 2009 or 2010, enter the amount from your
General Instructions
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2008 Schedule J, line 4.
Line 2, Elected Farm Income—See federal instructions.
Otherwise, enter the tax from your 2008 Form 740, line 12 or
Line 4—Compute the tax using the 2011 tax table or by using
Form 740-EZ, line 4.
the tax rate schedule above.
Line 19—If you used Schedule J to figure your tax for:
Line 5—If you used Schedule J to figure your tax for:
2010, enter the amount from your 2010 Schedule J, line 16.
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2010 (that is, you entered the amount from the 2010
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2009 but not 2010, enter the amount from your 2009
Schedule J, line 22 on line 12 of your 2010 Form 740), enter
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on line 5 the amount from your 2010 Schedule J, line 11.
Schedule J, line 4.
2009 but not 2010, enter on line 5 the amount from your
Otherwise, enter the tax from your 2009 Form 740, line 12 or
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Form 740-EZ, line 4.
2009 Schedule J, line 15.
2008 but not 2009 or 2010, enter on line 5 the amount from
Line 20—If you used Schedule J to figure your tax for:
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your 2008 Schedule J, line 3.
2010, enter the amount from your 2010 Schedule J, line 4.
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Otherwise, enter the taxable income from your 2008 Form 740,
line 11 or Form 740-EZ, line 3. If the amount entered is zero or
Otherwise, enter the tax from your 2010 Form 740, line 12 or
Form 740-EZ, line 4.
less, see federal instructions.
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