Instructions 2012 Kentucky Corporation Income Tax And Llet Return

Clean Coal Incentive Tax Credit—Effective for tax years ending

commercial building deduction under 26 U.S.C. § 179D, as it

on or after December 31, 2006, a nonrefundable, nontransferable

existed on December 31, 2007. The total credit is limited to $500.

credit against the taxes imposed by KRS 136.120, KRS 141.020,

KRS 141.436

KRS 141.040 or KRS 141.0401 shall be allowed for a clean coal

ENERGY STAR Home or ENERGY STAR Manufactured Home Tax

facility. As provided by KRS 141.428, a clean coal facility means

Credit—A nonrefundable tax credit against the tax imposed under

an electric generation facility beginning commercial operation

KRS 141.040, and KRS 141.0401 is allowed if a taxpayer builds a

on or after January 1, 2005, at a cost greater than $150 million

new ENERGY STAR home located in the Commonwealth for use

that is located in the Commonwealth of Kentucky and is certified

as a principal place of residence, or sells a new ENERGY STAR

by the Energy and Environment Cabinet as reducing emissions

manufactured home to a buyer who uses that home as a principal

of pollutants released during generation of electricity through

place of residence in the Commonwealth. The tax credit shall

the use of clean coal equipment and technologies. The amount

equal: (a) $800 if the taxpayer builds an ENERGY STAR home;

of the credit shall be $2 per ton of eligible coal purchased that is

or (b) $400 if the taxpayer sells an ENERGY STAR manufactured

used to generate electric power at a certified clean coal facility,

home. The tax credit shall not apply if the tax credit has been

except that no credit shall be allowed if the eligible coal has been

previously taken by another taxpayer on the same ENERGY STAR

used to generate a credit under KRS 141.0405 for the taxpayer,

home or ENERGY STAR manufactured home, or the taxpayer has

parent or subsidiary. KRS 141.428

taken the energy efficiency products tax credit. KRS 141.437

Ethanol Tax Credit—Producers of ethanol are entitled to a tax

Railroad Maintenance and Improvement Tax Credit—For tax

credit against the taxes imposed by KRS 141.020, KRS 141.040

years beginning on or after January 1, 2010, an owner of any

and KRS 141.0401. The taxpayer must file a claim for ethanol credit

Class II railroad or Class III railroad located in Kentucky or any

with the Department of Revenue by January 15 each year for

person who transports property using the rail facilities of a Class

ethanol produced in the previous calendar year. The department

II railroad or Class III railroad located in Kentucky or furnishes

shall issue a credit certification (Schedule ETH) to the taxpayer by

railroad–related property or services to a Class II railroad or Class

April 15. The credit certification must be attached to the tax return

III railroad located in Kentucky, but only with respect to miles of

claiming this credit. KRS 141.4242 and 103 KAR 15:110

railroad track assigned to the person by a Class II railroad or Class

III railroad, shall be entitled to a nonrefundable credit against

Cellulosic Ethanol Tax Credit—Producers of cellulosic ethanol

taxes imposed by KRS 141.020 or 141.040 and KRS 141.0401 in

are entitled to a tax credit against the taxes imposed by

an amount equal to fifty percent of the qualified expenditures

KRS 141.020, KRS 141.040 and KRS 141.0401. The taxpayer

paid or incurred to maintain or improve railroads located in

must file a claim for ethanol credit with the Department

Kentucky, including roadbeds, bridges, and related structures,

of Revenue by January 15 each year for cellulosic ethanol

that are owned or leased as of January 1, 2008, by a Class II or

produced in the previous calendar year. The department shall

Class III railroad.

issue a credit certification (Schedule CELL) to the taxpayer by

April 15. The credit certification must be attached to the tax

The credit allowed shall not exceed the product of $3,500

return claiming this credit. KRS 141.4244 and 103 KAR 15:120

multiplied by the sum of: (i) The number of miles of railroad

track in Kentucky owned or leased by the eligible taxpayer as

Energy Efficiency Products Tax Credit—A nonrefundable tax credit

of the close of the taxable year; and (ii) The number of miles of

against the tax imposed under KRS 141.020 or 141.040 and KRS

railroad track in Kentucky assigned to the eligible taxpayer by

141.0401 is allowed as follows:

a Class II railroad or Class III railroad which owns or leases the

railroad track as of the close of the taxable year. KRS 141.385

(i) For a taxpayer’s residence or single–family or multifamily

residential rental unit, 30 percent of the installed cost of qualified

Railroad Expansion Tax Credit—For tax years beginning on or

insulation, qualified energy–efficient windows and storm doors,

after January 1, 2010: (a) a corporation that owns fossil energy

and qualified energy property that meets the performance, quality,

resources subject to tax under KRS 143.020 or 143A.020 or

and certification standards of and that would have been eligible

biomass resources and transports these resources using rail

for the federal credit for residential property expenditures under

facilities; or (b) a railway company subject to tax under KRS

26 U.S.C. § 25C, as it existed on December 31, 2007. The total

136.120 that serves a corporation that owns fossil energy

credit is limited to $500.

resources subject to tax under KRS 143.020 or 143A.020 or

biomass resources shall be entitled to a nonrefundable tax credit

(ii) For a taxpayer’s residence or single–family residential rental

against taxes imposed under KRS 141.040 and 141.0401 equal to

unit, 30 percent of the installed cost of an active solar space–

twenty–five percent of the expenditures paid or incurred by the

heating system, passive solar space–heating system, combined

corporation or railway company to expand or upgrade railroad

active solar space–heating and water-heating system, solar

track, including roadbeds, bridges, and related track structures,

water–heating system, and wind turbine or wind machine, or $3

to accommodate the transport of fossil energy resources or

per watt of direct current of a solar photovoltaic system. The total

biomass resources.

credit is limited to $500.

The credit amount approved for a calendar year for all taxpayers

(iii) For a multifamily residential rental unit or commercial

under KRS 141.386 shall be limited to $1 million. If the total

property, 30 percent of the installed cost of an active solar

amount of approved credit exceeds $1 million, the department

space–heating system, passive solar space–heating system,

shall determine the amount of credit each corporation and

combined active solar space–heating and water–heating system,

railroad company receives by multiplying $1 million by a fraction,

solar water–heating system, and wind turbine or wind machine,

the numerator of which is the amount of approved credit for a

or $3 per watt of direct current of a solar photovoltaic system.

corporation or railway company and the denominator of which

The total credit is limited to $1,000.

is the total approved credit for all corporations and railway

(iv) For commercial property, 30 percent of the installed cost of an

companies.

energy–efficient interior lighting system that meets the maximum

Each corporation or railway company eligible for the credit

reduction in lighting power density requirements for the federal

provided under this section shall file a railroad expansion

energy–efficient commercial building deduction under 26 U.S.C.

tax credit claim on forms prescribed by the department by

§ 179D, as it existed on December 31, 2007. The total credit is

the fifteenth day of the first month following the close of the

limited to $500.

preceding calendar year. The department shall determine the

(v) For commercial property, 30 percent of the installed cost of an

amount of the approved credit and issue a credit certificate to

energy–efficient heating, cooling, ventilation, or hot water system

the corporation or railway company by the fifteenth day of the

that meets the requirements for the federal energy–efficient

third month following the close of the calendar year. KRS 141.386

Instructions 2012 Kentucky Corporation Income Tax And Llet Return - 2012 Page 13

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