Schedule Fon-T (Form 41a720-S58) - Tracking Schedule For A Fon Project (Page 2 of 2) in pdf

41A720-S58 (10-13)

Page 2

INSTRUCTIONS—SCHEDULE FON-T

Commonwealth of Kentucky

DEPARTMENT OF REVENUE

of each FON project. Beginning with the first taxable

PURPOSE OF SCHEDULE—This schedule is used by

year of the FON incentive agreement, complete Columns

an entity which has a farming operation networking

A through E using a separate line for each year of the

project (FON) approved by the Cabinet for Economic

agreement. The company shall attach a copy of this

Development as provided by KRS 141.410 to 141.414, to

schedule updated with current year information to the

maintain a record of approved costs and the tax credits

taken for the duration of the project. This information is

Schedule FON or Schedule FON-SP which is filed with

necessary for the company to determine the limitation

the Kentucky tax return for the year.

of the tax credit for each taxable year of the agreement

and to allow the Kentucky Department of Revenue to

For Form 720, all tax credits are entered on Schedule

verify that the tax credit carryover has been properly

TCS, Tax Credit Summary Schedule. The total tax credits

determined.

calculated may exceed the amount that can be used.

Credits must be claimed in the order prescribed by KRS

KRS 141.412 provides that any tax credit not used in the

141.0205. Total credits claimed cannot reduce the LLET

taxable year in which it becomes available may be carried

below the $175 minimum. Total credits claimed cannot

forward to the next succeeding five (5) taxable years

reduce the income tax liability below zero.

until the tax credit has been fully used. The aggregate

tax credit used in any taxable year shall not exceed

SPECIFIC INSTRUCTIONS

the income, Kentucky gross profits or Kentucky gross

receipts, as the case may be, of the qualified farming

Column A—Enter on each line the ending date (month,

operation generated by or arising out of the qualified

day and year) of the taxable year for which the information

farming operation’s participation in a networking project

in Columns B through E is entered.

in that taxable year.

Column B—This column will be blank for the first taxable

GENERAL INSTRUCTIONS

year of the agreement. For each year thereafter, if the

amount entered in Column D for the prior year exceeds

“Approved costs” means costs incurred during the

the amount entered in Column E for the prior year, enter

taxable year by a qualified farming operation for training

the difference. If the amount entered in Column E for the

and improving skills of managers and employees involved

prior year equals the amount entered in Column D for the

in a networking project as provided by KRS 141.410(1).

prior year, enter zero (-0-).

“Qualified farming operation” means an individual,

Column C—Enter the total amount of approved costs for

sole proprietorship, partnership, joint venture, trust,

the taxable year.

unincorporated organization, association, corporation, or

institution, engaged in farming in Kentucky that provides

Column D—Enter the result of adding the amounts

raw materials for food-producing facilities in Kentucky,

entered in Columns B and C. Also, enter this amount on

and that purchases new buildings or equipment, or that

Schedule FON, Part III, Line 2 or Schedule FON-SP, Part

incurs training expenses, to support its participation in

I, Line 8, whichever is applicable.

a networking project.

Column E—The FON tax credit is applied against the

KRS 141.414(3) provides that the net income subject to tax

corporation income tax imposed under KRS 141.040

and the tax credit determined under KRS 141.414(2) shall

and/or the limited liability entity tax imposed under KRS

be excluded in determining each partner’s, member’s,

141.0401. The tax credit calculated for each tax can be

shareholder’s or beneficiary’s distributive share of net

different; however, for tracking purposes, the maximum

income or credit of the pass-through entity or trust.

amount used against either tax is recorded as the amount

A s i n g l e S c h e d u l e F O N -T, Tr a c k i n g S c h e d u l e

claimed. Enter the greater of Column E or Column F from

for a FON Project, shall be maintained for the duration

Schedule TCS for this project.

Schedule Fon-T (Form 41a720-S58) - Tracking Schedule For A Fon Project Page 2

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