Instructions 2012 Kentucky Corporation Income Tax And Llet Return

GENERAL INFORMATION

Other Entities—Foreign Sales Corporations (FSCs) and interest–

deferred or interest–charged Domestic International Sales

Corporations (DISCs) are subject to Kentucky income tax to the

Internal Revenue Code Reference Date—Effective for taxable

same extent as other corporations.

years beginning after December 31, 2006, Kentucky Revised

Statute (KRS) 141.010(3) was amended to define “Internal

Additionally, certain organizations which must file special

Revenue Code” (IRC) for Kentucky income tax purposes to

returns for federal purposes, e.g., homeowners associations,

mean the IRC in effect on December 31, 2006, exclusive of

political organizations, real estate investment trusts and

any amendments made subsequent to that date, other than

regulated investment companies must file Form 720. Only

amendments that extend provisions in effect on December 31,

political organizations filing a federal Form 1120POL must file

2006, that would otherwise terminate and as modified by KRS

Form 720.

141.0101. For property placed in service after September 10, 2001,

Corporations Not Required to File—Corporations which are

only the depreciation and expense deductions allowed under

exempt by law from Kentucky income tax and LLET include

Sections 168 and 179 of the Internal Revenue Code in effect

financial institutions as defined in KRS 136.500, insurance

on December 31, 2001, exclusive of any amendments made

companies, savings and loan associations, corporations

subsequent to that date shall apply. KRS 141.010(3)

exempted by IRC Section 501, and religious, educational,

charitable and like corporations not conducted for profit. KRS

Kentucky Tax Registration Application—Prior to doing business

141.040 and KRS 141.0401

in Kentucky, each corporation should complete a Kentucky Tax

Substitute Forms—Any form to be used in lieu of an official

Registration Application, Revenue Form 10A100, to register for

Department of Revenue form must be submitted to the

a Kentucky Corporation/LLET Account Number. This account

department for prior approval.

number will be used for remitting the corporation income tax

as required by KRS 141.040 and the LLET as required by KRS

Required Forms and Information—Each corporation must enter

141.0401. The application is available at Kentucky Taxpayer

all applicable information on Form 720, attach a schedule for each

Service Centers (see page 15) or from the Department of Revenue,

line item or line item instruction which states "attach schedule,"

Taxpayer Registration Section, Frankfort, KY 40620 or at www.

and Kentucky forms or schedules, if applicable.

revenue.ky.gov (click on Business). The application may be faxed

Required Federal Forms and Schedules

to (502) 227-0772.

All corporations must provide a copy of the following federal

Who Must File—LLET and Corporation Income Tax

forms submitted to the Internal Revenue Service:

LLET—The limitations imposed and protections provided

1. Form 1120, all pages—If Form 1120 is not filed, attach copies

by the United States Constitution or Pub. L. No. 86–272 do

of the income statement, cost of goods sold schedule and

not apply to the tax imposed by KRS 141.0401. A Kentucky

balance sheet of the federal form filed. If the corporation is

Corporation Income Tax and LLET Return, Form 720, must

not required to submit a balance sheet for federal income tax

be filed by every corporation (a) organized under the

purposes, attach the balance sheet prepared on a consistent

laws of this state; (b) having its commercial domicile in

basis from the books and records of the corporation.

this state; (c) owning or leasing property in this state; (d)

2. Form 1125-A—Cost of Goods Sold

having one or more individuals performing services in this

3. Form 1125-E—Compensation of Officers

state; (e) maintaining an interest in a pass–through entity

4. Form 851—Affiliations Schedule

doing business in this state; (f) deriving income from or

5. Form 4797—Sales of Business Property

attributable to sources within this state, including deriving

6. Schedule D—Capital Gains and Losses

income directly or indirectly from a trust doing business

7. Form 3800—General Business Credit

in this state, or deriving income directly or indirectly from

8. Form 5884—Work Opportunity Credit

a single member limited liability company that is doing

9. Schedules for items on Form 1120, Schedule L, which state

business in this state and is disregarded as an entity

"attach schedule."

separate from its single member for federal income tax

Electronic Funds Transfer (EFT)—LLET estimated tax payments are

purposes; or (g) directing activities at Kentucky customers

not permitted by EFT. The Department of Revenue is accepting

for the purposes of selling them goods or services. KRS

electronically filed Corporation Income/Limited Liability Entity Tax

141.0401 and KRS 141.010(25)

estimated tax voucher payments only for corporation income tax.

Before filing by EFT, the corporation must have a valid six–digit

Corporation Income Tax—Except for the limitations

Kentucky Corporation/LLET account number and have registered

imposed and protections provided by the United States

with the Department of Revenue to file EFT. Using an incorrect

Constitution or Pub. L. No. 86–272, a Kentucky corporation

account number, such as an account number for withholding or

income tax and LLET return must be filed by every

sales and use tax, will result in the payment being credited to

corporation meeting the provisions listed above. KRS

another corporation’s account. For more information contact the

141.040 and KRS 141.010(25)

Department of Revenue at 1–800–839–4137 or (502) 564–6020.

The EFT registration form is available at

Disregarded Entities—A limited liability company (LLC) is treated

See E–File & E–Payment Options (click on KY E–Tax). The direct

for Kentucky LLET and income tax purposes in the same manner

link is

as it is treated for federal income tax purposes. Therefore, a single

member LLC that is disregarded for federal income tax purposes

EFT is not available for a corporation's LLET estimated tax payments,

shall be included in the return filed by its single member (parent

return payment or extension payment.

entity). KRS 141.010(25), KRS 141.200(10) and 103 KAR 16:300

Accounting Procedures—Kentucky income tax law requires a

Pass-through Entities—Corporations doing business in Kentucky

corporation to report income on the same calendar or fiscal

solely as a partner or member in a pass-through entity will file

year and to use the same methods of accounting required for

Form 720 pursuant to the provisions of KRS 141.010, 141.120

federal income tax purposes. Any federally approved change

and 141.206.

in accounting periods or methods must be reported to the

Instructions 2012 Kentucky Corporation Income Tax And Llet Return - 2012 Page 4

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