Form 41a720s(I) - Kentucky S Corporation Income Tax And Llet Return

141.040 and KRS 141.0401 equal to 4.5 percent of expenditures

of the credit may not be carried forward or back. For information

for Kentucky coal (less transportation costs). Unused portions

regarding the program, contact the Education and Workforce

of this credit may not be carried forward or back. Schedule CC

Development Cabinet, Kentucky Adult Education, Council on

must be attached to the tax return claiming this credit. KRS

Postsecondary Education. The GED–Incentive Program Final

141.041

Report (DAEL–31) for each employee that completed a learning

contract during the tax year must be attached to the tax return

Enterprise Zone Tax Credit—The last enterprise zone expired

claiming the credit. KRS 151B.127

on December 31, 2007. Previous tax credit carryforwards are

allowed for enterprise zones that previously expired. Schedule

Voluntary Environmental Remediation Tax Credit—The

EZC must be attached. KRS 154.45-090

taxpayer must have an agreed order and be approved by the

Energy and Environment Cabinet under the provisions of KRS

Kentucky Investment Fund Tax Credit—A taxpayer which makes

224.01–518. Maximum tax credit allowed to be claimed per

a cash contribution to an investment fund approved by KEDFA

taxable year is 25 percent of the approved credit. This credit

in accordance with KRS 154.20–250 to 154.20–284 is entitled

may be claimed against the taxes imposed by KRS 141.020,

to a nonrefundable credit equal to 40 percent of the investor’s

KRS 141.040 and KRS 141.0401. For more information regarding

proportional ownership share of all qualified investments made

credit for voluntary environmental remediation property,

by the investment fund and verified by the authority. The credit

contact the Energy and Environment Cabinet at (502) 564–3350.

may be applied against the taxes imposed by KRS 141.020, KRS

Schedule VERB must be attached to the tax return claiming this

141.040, KRS 141.0401, KRS 136.320, KRS 136.300, KRS 136.310,

credit. KRS 141.418

KRS 136.505 and KRS 304.3–270. A copy of the notification from

KEDFA reflecting the amount of credit granted and the year in

Biodiesel Tax Credit—The 2007 Second Extraordinary Session

which the credit may first be claimed must be attached to the

amended KRS 141.422 to include renewable diesel to be subject

tax return claiming this credit.

to the biodiesel tax credit. Producers and blenders of biodiesel

and producers of renewable diesel are entitled to a tax credit

The tax credit amount that may be claimed by an investor in

against the taxes imposed by KRS 141.020, KRS 141.040 and

any tax year shall not exceed 50 percent of the initial aggregate

KRS 141.0401. The taxpayer must file a claim for biodiesel

credit amount approved by the authority for the investment

credit with the Department of Revenue by January 15 each year

fund which is proportionally available to the investor. Example:

for biodiesel produced or blended and the renewable diesel

An investor with a 10 percent investment in a fund which has

produced in the previous calendar year. The department shall

been approved for a total credit to all investors of $400,000 is

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

limited to $20,000 maximum credit in any given year ($400,000

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

x 10% x 50%).

return claiming this credit. KRS 141.423 and 103 KAR 15:140

If the amount of credit that may be claimed in any tax year

Kentucky Environmental Stewardship Tax Credit—For tax years

exceeds the tax liabilities, the excess credit may be carried

beginning on or after January 1, 2006, an approved company

forward, but the carryforward of any excess tax credit shall

may be entitled to a credit against the taxes imposed by KRS

not increase the limitation that may be claimed in any tax year.

141.020, KRS 141.040 or KRS 141.0401 on the income and the

Any credit not used in 15 years, including the year in which the

LLET of the approved company generated by or arising out of a

credit may first be claimed, shall be lost.

project as determined under KRS 154.48–020. An “environmental

stewardship product” means any new manufactured product

or substantially improved existing manufactured product that

Information regarding the approval process for these credits

may be obtained from the Cabinet for Economic Development,

has a lesser or reduced adverse effect on human health and

the environment or provides for improvement to human health

Department of Financial Incentives at (502) 564–4554. KRS

and the environment when compared with existing products or

141.068

competing products that serve the same purpose. A company

must have eligible costs of at least $5 million and within six

Coal Incentive Tax Credit—Effective for tax returns filed after

months after the activation date, the approved company

July 15, 2001, an electric power company or a company that

compensates a minimum of 90 percent of its full-time employees

owns and operates a coal-fired electric generating plant may

whose jobs were created or retained with base hourly wages

be entitled to a coal incentive tax credit first against the taxes

equal to either: (1) 75 percent of the average hourly wage for the

imposed by KRS 141.020, KRS 141.040 and KRS 141.0401 and

commonwealth; or (2) 75 percent of the average hourly wage

then against tax imposed by KRS 136.120. Application for this

for the county in which the project is to be undertaken. The

credit is made on Schedule CI, Application for Coal Incentive Tax

maximum amount of negotiated inducement that can be claimed

Credit, and a copy of the credit certificate issued by the

by a company for any single tax year may be up to 25 percent

Kentucky Department of Revenue must be attached to the tax

of the authorized inducement. The agreement shall expire on

return on which the credit is claimed. KRS 141.0405

the earlier of the date the approved company has received

inducements equal to the approved costs of its project, or 10

Qualified Research Facility Tax Credit—A taxpayer is entitled

years from the activation date. For more information, contact

to a credit against the taxes imposed by KRS 141.020, KRS

the Cabinet for Economic Development, Department of Financial

141.040 and KRS 141.0401 of 5 percent of the qualified costs of

Incentives at (502) 564–4554.

construction, remodeling, expanding and equipping facilities

in Kentucky for “qualified research.” Any unused credit may

KRS 141.430 was amended to provide that for tax years

be carried forward 10 years. Schedule QR, Qualified Research

beginning on or after June 4, 2010, the base tax year is reduced

Facility Tax Credit, must be attached to the tax return on which

by 50 percent. The base tax year is the combined income tax

this credit is claimed. Federal Form 6765, Credit for Increasing

and LLET for the first taxable year after December 31, 2005, that

Research Activities, must also be attached if applicable. See

ends immediately prior to the activation date. If the base tax

instructions for Schedule QR for more information regarding

year is for a taxable year beginning before January 1, 2007, the

this credit. KRS 141.395

LLET will not apply. KRS 141.430

GED Incentive Tax Credit—A taxpayer is entitled to a credit

Caution: An approved company under the Environmental

against the taxes imposed by KRS 141.020, KRS 141.040 and KRS

Stewardship Act shall not be entitled to the recycling credit

141.0401. The credit reflected on this line must equal the sum

provided under the provisions of KRS 141.390 for equipment

of the credits reflected on the attached GED–Incentive Program

used in the production of an environmental stewardship

Final Reports. This credit may be claimed only in the year during

project.

which the learning contract was completed and unused portions

Form 41a720s(I) - Kentucky S Corporation Income Tax And Llet Return - 2012 Page 16

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