Schedule K-39 - Credit For Plugging An Abandoned Oil Or Gas Well (Page 2 of 2) in pdf

INSTRUCTIONS FOR SCHEDULE K-39

PART B — PLUGGING COSTS

GENERAL INFORMATION

LINE 4—Enter the KCC plugging fee for the abandoned well.

K.S.A. 79-32,207 provides for an income tax credit for taxpayers

Enclose a copy of KCC plugging invoice, even if the fee was

who make expenditures during the tax year to plug an abandoned

waived by KCC.

oil or gas well on their land in accordance with the rules and

regulations of the Kansas Corporation Commission (KCC). The

LINE 5— Enter the total of other expenses incurred this tax year

credit is 50% of the expenditures made during the tax year. If the

to plug the abandoned well. If you plugged more than one

credit exceeds the income tax liability for the taxable year the

qualifying well, enter the total for all qualifying wells.

expenditures are made, any unused credit may be carried forward

LINE 6—Enter the total of lines 4 and 5.

until used. The total amount of credits taken by all taxpayers

LINE 7—The amount of credit allowed is 50% of the total costs

(including any credit carry over) may not exceed $250,000 in any

incurred this tax year.

fiscal year.

LINE 8—Multiply line 6 by line 7. This is the amount of plugging

An abandoned oil or gas well is any well: 1) that the KCC

expenditures available for credit this tax year.

has the authority to plug, replug, or repair because such well is

polluting or is likely to pollute any usable water strata or supply,

PART C — COMPUTATION OF THIS YEAR’S CREDIT

or causing the loss of usable water; 2) on which drilling began

LINE 9—Enter any carry forward from line 14 of your prior year’s

prior to January 1, 1970; and 3) that is located on land owned by

Schedule K-39.

the taxpayer claiming this credit.

LINE 10—Enter the amount of credit from the prior year’s

Fiscal Year Credit Limitation. Qualifying taxpayers will receive

Schedule K-39 denied because the fiscal year credit limit

the credit on a “first come, first serve” basis. The credit will be

had been reached.

denied after the statutory fiscal year credit limit of $250,000 has

LINE 11—Add lines 8, 9, and 10 and enter the result. This is your

been reached. However, the amount of credit denied for this

reason may be entered on line 10 of the subsequent year’s

total credit available this tax year.

Schedule K-39.

LINE 12—Enter the amount of your Kansas tax liability after all

credits other than the credit for plugging an abandoned well.

Partnerships and S Corporations: Partners and shareholders

should enter on line 5 of Schedule K-39 their proportionate share

LINE 13—Enter the lesser of lines 11 or 12. Enter this amount

of the costs incurred this tax year by the partnership or

on the appropriate line of Form K-40, Form K-41, or Form

S corporation (enclose computation).

K-120.

Required Information: Retain copies of the following

PART D — COMPUTATION OF CREDIT CARRY FORWARD

documents and information with your records, as KDOR (Kansas

LINE 14—Subtract line 13 from line 11. This is the amount of

Department of Revenue) reserves the right to request them as

credit you will have available to enter on line 9 of your next

necessary.

year’s Schedule K-39.

• KCC Form CP-4.

• An itemized list of expenses with copies of invoices for

TAXPAYER ASSISTANCE

plugging costs and the KCC invoice indicating that the

Commission has verified the plugging. List the expenses

For information about plugging an abandoned oil or gas well

of each well separately.

or your certification, contact the:

• If applicable, the KDOR letter of denied credit for line 10.

Kansas Corporation Commission

SPECIFIC LINE INSTRUCTIONS

Conservation Division

130 S. Market, Room 2078

PART A — ABANDONED WELL INFORMATION

Wichita, KS 67202-3802

If you incurred expenses to plug more than one qualifying

Phone: (316) 337-6200

abandoned oil or gas well this tax year as certified by

the KCC, retain a schedule for your records showing the

information in Part A for each well. KDOR reserves the right to

For assistance in completing this schedule contact KDOR:

request this information if needed.

Tax Operations

LINE 1—Enter the API (American Petroleum Institute) number

Docking State Office Building, 1st fl.

and physical location of the abandoned well.

915 SW Harrison St.

Topeka, KS 66625-2007

LINE 2—Check one of the boxes. Only wells located on land

owned by the taxpayer claiming the credit qualify for the credit.

Phone: (785) 368-8222

LINE 3—Enter date drilling of this well began (only wells on which

Fax: (785) 291-3614

drilling began prior to January 1, 1970 qualify for the credit).

Web site:

Schedule K-39 - Credit For Plugging An Abandoned Oil Or Gas Well Page 2

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