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Tax Credit Summary Schedule—Schedule TCS

Schedule TCS is used by corporations and limited liability pass–through entities to apply tax credits for entities subject to the corporation

income tax imposed by KRS 141.040 and/or the limited liability entity tax (LLET) imposed by KRS 141.0401. The amount of tax credit

against each tax can be different. Taxpayer as used in this section refers to corporations and limited liability pass–through entities.

Economic Development Tax Credits—This section is completed

or Bluegrass State Skills Corporation (telephone: 502-564-

only if a limited liability pass-through entity has been approved

2021).

for one of more of the credits authorized by the: (i) Metropolitan

Certified Rehabilitation Tax Credit—This credit is allowed only

College Consortium Tax Credit (MCC – KRS 141.381); (ii)

if the taxpayer has been approved for the credit by the Kentucky

Kentucky Small Business Investment Credit Program (KSBIC

Heritage Council. Credit is allowed against the taxes imposed

– KRS 141.384); or (iii) Skills Training Investment Credit Act

by KRS 141.020, KRS 141.040, KRS 141.0401 and KRS 136.505

(STICA – KRS 154.12).

for qualified rehabilitation expenses on certified historic

structures. Information regarding this credit is available at

A limited liability pass-through entity shall not enter income

KRS 171.397

or LLET tax credits on Schedule TCS from: (i) Kentucky

Rural Economic Development Act (KREDA – KRS 154.22); (ii)

Unemployment Tax Credit—If a taxpayer has hired a Kentucky

Kentucky Industrial Development Act (KIDA – KRS 154.28);

resident classified as unemployed for at least 60 days and

(iii) Kentucky Economic Opportunity Zone Act (KEOZ – KRS

the resident remains in the employ of the taxpayer for 180

154.23); (iv) Kentucky Jobs Retention Agreement (KJRA – KRS

consecutive days during the tax year (a qualified person),

154.25); (v) Kentucky Industrial Revitalization Act (KIRA – KRS

the taxpayer may be entitled to the unemployment tax credit

154.26); (vi) Kentucky Jobs Development Act (KJDA – KRS

against the taxes imposed by KRS 141.020, KRS 141.040

154.24); (vii) Kentucky Business Investment Program (KBI

and KRS 141.0401. For each qualified person, a one–time

– KRS 154.32); (viii) Kentucky Reinvestment Act (KRA – KRS

nonrefundable credit of $100 may be claimed. The period

154.34); or (ix) Incentives for Energy Independence Act (IEIA

of unemployment must be certified by the Education and

– KRS 154.27).

Workforce Development Cabinet, Department of Workforce

Investment, Office of Employment and Training, Frankfort,

A limited liability pass-through entity shall file Schedule

KY, and a copy of the certification must be maintained by

KREDA-SP, Schedule KIDA-SP, Schedule KEOZ-SP, Schedule

the taxpayer. For certification questions, call (502) 564–7456.

KJRA-SP, Schedule KIRA-SP, Schedule KJDA-SP, Schedule

Schedule UTC must be attached to the return claiming this

KBI-SP, Schedule KRA-SP or Schedule IEIA-SP to compute the

credit. KRS 141.065

tax credits for these programs.

Recycling/Composting Tax Credit—A taxpayer, which

To claim the STICA or MCC credit, a copy of the tax credit

purchases recycling and/or composting equipment to be

certification(s) received from Bluegrass State Skills Corporation

used exclusively in Kentucky for recycling or composting

post– consumer waste materials, may be entitled to a

reflecting the amount of credit awarded shall be attached to

nonrefundable credit against the taxes imposed by KRS

the tax return. The credit for either the STICA or MCC shall

be claimed on the tax return filed for the taxable year during

141.020, KRS 141.040 and KRS 141.0401 in an amount equal to

which the final authorizing resolution is adopted by Bluegrass

50 percent of the installed cost of the equipment. Application

State Skills Corporation. The STICA credit not used during

for this credit must be made on Schedule RC, and a copy of

the year in which the final authorizing resolution is adopted

the schedule reflecting the amount of credit approved by the

by Bluegrass State Skills Corporation may be carried forward

Department of Revenue must be attached to the tax return on

three successive years; the MCC credit not used during the

which the credit is claimed. The amount of this credit claimed

year in which the final authorizing resolution is adopted by

for the tax year may not exceed 25 percent of the tax liability

and cannot exceed 10 percent of the credit approved in the

Bluegrass State Skills Corporation may be carried forward to

tax years ending before April 15, 2013. If a STICA or MCC credit

first year of eligibility.

is being carried forward from a prior year, attach a schedule

For taxable years beginning after December 31, 2004, a

reflecting the original credit available, the amount of the credit

taxpayer which purchases recycling and /or composting

used each year and the balance of the credit.

equipment to be used exclusively in Kentucky for recycling or

composting post–consumer waste material that qualifies as a

To claim the KSBIC credit, a copy of the tax credit notification

Major Recycling Project is entitled to a nonrefundable credit

received from Kentucky Economic Development Finance

against the taxes imposed by KRS 141.020, KRS 141.040 and

Authority (KEDFA) reflecting the amount of credit awarded

KRS 141.0401. The credit is an amount equal to 50 percent of the

shall be attached to the tax return. The credit for the KSBIC

installed cost of the recycling or composting equipment limited

shall be claimed on the tax return for the taxable year during

to: 50 percent of the excess of the total of each tax liability

which the credit was approved by KEDFA. The tax credit not

over the baseline tax liability of the taxpayer or $2,500,000. To

used during the year of approval by KEDFA may be carried

qualify, the taxpayer must: (1) invest more than $10,000,000

forward up to five years. If a KSBIC credit is being carried

in recycling or composting equipment to be used exclusively

forward from a prior year, attach a schedule reflecting the

in this state; (2) have more than 750 full–time employees

original credit available, the amount of the credit used each

with an average hourly wage of more than 300 percent of the

year and the balance of the credit.

federal minimum wage; and (3) have plant and equipment

with a total cost of more than $500,000,000. Application for

Economic development tax credits are allowed against the

this credit must be made on Schedule RC, and a copy of the

taxes imposed by KRS 141.020 or KRS 141.040 and KRS

schedule reflecting the amount of credit approved by the

141.0401.

Department of Revenue must be attached to the tax return on

which the credit is claimed. The credit is limited to a period

Information regarding the approval process for these credits

of 10 years commencing with the approval of the recycling

may be obtained from the Cabinet for Economic Development,

credit application.

Department for Financial Incentives (telephone: 502-564-4554)

Instructions For Form 725 - Kentucky Single Member Llc Individually Owned Llet Return - 2011 Page 9

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