Instructions For Form 725 (State Form 41a725(I)) - Kentucky Single Member Llc Individually Owned Llet Return - 2012 Page 13
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16the denominator of which is the total approved credit for all
New Markets Development Program Tax Credit—KRS 141.432
to 141.434 was created to encourage taxpayer investment in
corporations and railway companies.
qualified low-income communities. A taxpayer that makes a
Each corporation or railway company eligible for the credit
qualified equity investment as provided by KRS 141.432(7)
provided under this section shall file a railroad expansion
in a qualified community development entity as provided by
tax credit claim on forms prescribed by the department by
KRS 141.432(6) shall be entitled to a nonrefundable tax credit
the fifteenth day of the first month following the close of the
against the taxes imposed by KRS 141.020, 141.040, 141.0401,
preceding calendar year. The department shall determine the
136.320, 136.330, 136.340, 136.350, 137.370, 136.390 or 304.3-
amount of the approved credit and issue a credit certificate to
270. The total amount of tax credits that may be awarded by
the corporation or railway company by the fifteenth day of the
the department shall be limited to $5 million. “Qualified low-
third month following the close of the calendar year. KRS 141.386
income community investment” means any capital or equity
investment in, or loan to, any qualified active low-income
ENDOW Kentuck y Tax Credit—A taxpayer making an
community business made after June 4, 2010. With respect to
endowment gift to a permanent endowment fund of a qualified
any one qualified active low-income community business, the
community foundation, or county-specific component fund,
maximum amount of qualified active low-income community
or affiliate community foundation, which has been certified
investments that may be made in the business, on a collective
under KRS 147A.325, is entitled to a tax credit equal to twenty
basis with all of its affiliates, with the proceeds of qualified
percent (20%) of the endowment gift, not to exceed $10,000.
equity investments that have been certified under KRS 141.433
The nonrefundable tax credit is allowed against the taxes
shall be $10 million, whether made by one or several qualified
imposed by KRS 141.020 or 141.040 and KRS 141.0401 and if
community development entities.
not use in the year the tax credit is awarded may be carried
forward for a period not to exceed five years. The department
The amount of the credit shall be equal to 39% of the purchase
shall issue a credit certification (Schedule ENDOW) to a
taxpayer upon receiving proof that the endowment gift was
price of the qualified equity investment made by the taxpayer.
made to the approved community foundation as provided by
A taxpayer is allowed to claim zero percent (0%) for each of
KRS 141.438(7). Schedule ENDOW must be attached to the
the first two credit allowance dates, seven percent (7%) for the
taxpayer’s tax return each year to claim the credit. A partner,
third allowance date, and eight percent (8%) for the next four
member or shareholder of a pass-through entity shall attach a
allowance dates. “Credit allowance date” means with respect
copy of Schedule K-1, Form 720S, 765 or 765-GP to the partner’s,
to any qualified equity investment: (a) the date on which the
member’s or shareholder’s tax return each year to claim the
investment is initially made; and (b) each of the six anniversary
tax credit.
dates of that date thereafter. KRS 141.434
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