Instructions For Form 720 - Kentucky Corporation Income Tax And Llet Return

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

the taxes imposed by KRS 141.040 or 141.020 and KRS 141.0401

attributable to the project in accordance with KRS 141.412.

only if a corporation has been approved for one of more of

The annual tax credit shall be available for the first five (5)

the credits authorized by the: (i) Kentucky Rural Economic

years that the farming operation is involved in the networking

Development Act (KREDA – KRS 154.22); (ii) Metropolitan College

project. The annual tax credit shall be equal to the approved

Consortium Tax Credit (MCC – KRS 141.381); (iii) Kentucky Small

costs incurred by the qualified farming operation during the tax

Business Investment Credit Program (KSBIC – KRS 141.384) (iv)

year and shall not exceed the income, Kentucky gross profits

Kentucky Industrial Development Act (KIDA – KRS 154.28); (v)

or Kentucky gross receipts, as the case may be, of the qualified

Kentucky Economic Opportunity Zone Act (KEOZ – KRS 154.23);

farming operation generated by or arising out of the qualified

(vi) Kentucky Jobs Retention Agreement (KJRA – KRS 154.25);

farming operation's participation in a networking project.

(vii) Kentucky Industrial Revitalization Act (KIRA – KRS 154.26);

Schedule FON must be attached to the tax return claiming the

(viii) Kentucky Jobs Development Act (KJDA – KRS 154.24); (ix)

credit. KRS 141.412

Kentucky Business Investment Program (KBI – KRS 154.32); (x)

Kentucky Reinvestment Act (KRA – KRS 154.34); (xi) Skills Training

Certified Rehabilitation Tax Credit—This credit is allowed only

Investment Credit Act (STICA – KRS 154.12); or (xii) Incentives

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

for Energy Independence Act (IEIA – KRS 154.27).

Heritage Council. Credit is allowed against the taxes imposed

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

To qualify for the KREDA, KIDA, KEOZ, KJRA, KIRA, KJDA, KBI,

qualified rehabilitation expenses on certified historic structures.

KRA, or IEIA credits, a corporation shall be approved by the

Information regarding this credit is available at

Kentucky Economic Development Finance Authority (KEDFA) and

ky.gov. KRS 171.397

shall have executed and activated the appropriate agreement

with KEDFA. Form(s) and instructions for the computation of the

Unemployment Tax Credit—If a taxpayer has hired a Kentucky

credit(s) will be mailed to the approved taxpayer. To claim any

resident classified as unemployed for at least 60 days and

of these credits, the applicable tax credit schedule or schedules

the resident remains in the employ of the taxpayer for 180

must be attached to the tax return.

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

the taxpayer may be entitled to the unemployment tax credit

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

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

certification(s) received from Bluegrass State Skills Corporation

141.0401. For each qualified person, a one–time nonrefundable

reflecting the amount of credit awarded shall be attached to

credit of $100 may be claimed. The period of unemployment

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

must be certified by the Education and Workforce Development

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

Cabinet, Department of Workforce Investment, Office of

the final authorizing resolution is adopted by Bluegrass State

Employment and Training, Frankfort, KY, and a copy of the

Skills Corporation. The STICA credit not used during the year in

certification must be maintained by the taxpayer.

which the final authorizing resolution is adopted by Bluegrass

State Skills Corporation may be carried forward three successive

For certification questions, call (502) 564-7456. Schedule

years; the MCC credit not used during the year in which the

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

final authorizing resolution is adopted by Bluegrass State Skills

141.065

Corporation may be carried forward to tax years ending before

April 15, 2017. If a STICA or MCC credit is being carried forward

Recycling/Composting Tax Credit—A taxpayer, which purchases

from a prior year, attach a schedule reflecting the original credit

recycling and/or composting equipment to be used exclusively

available, the amount of the credit used each year and the

in Kentucky for recycling or composting post–consumer waste

balance of the credit.

materials, may be entitled to a nonrefundable credit against

the taxes imposed by KRS 141.020, KRS 141.040 and KRS

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

141.0401 in an amount equal to 50 percent of the installed cost

received from KEDFA reflecting the amount of credit awarded

of the equipment. Application for this credit must be made on

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

Schedule RC, and a copy of the schedule reflecting the amount

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

of credit approved by the Department of Revenue must be

the credit was approved by KEDFA. The tax credit not used during

attached to the tax return on which the credit is claimed. The

the year of approval by KEDFA may be carried forward up to

amount of this credit claimed for the tax year may not exceed

five years. If a KSBIC credit is being carried forward from a prior

25 percent of the tax liability and cannot exceed 10 percent of

year, attach a schedule reflecting the original credit available,

the credit approved in the first year of eligibility.

the amount of the credit used each year and the balance of the

credit.

For taxable years beginning after December 31, 2004, a taxpayer

which purchases recycling and/or composting equipment to

Economic development tax credits are allowed against the taxes

be used exclusively in Kentucky for recycling or composting

imposed by KRS 141.040 and KRS 141.0401.

post–consumer waste material that qualifies as a Major

Recycling Project is entitled to a nonrefundable credit against

Information regarding the approval process for these credits

the taxes imposed by KRS 141.020, KRS 141.040 and KRS

may be obtained from the Cabinet for Economic Development,

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

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

installed cost of the recycling or composting equipment limited

Bluegrass State Skills Corporation (telephone: 502-564-2021).

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

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

Farming Operation Networking Tax Credit—A qualified

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

farming operation which has a farm operation networking

recycling or composting equipment to be used exclusively in

project approved by the Cabinet for Economic Development as

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

provided by KRS 141.410 to 141.414 is allowed a credit against

Instructions For Form 720 - Kentucky Corporation Income Tax And Llet Return - 2013 Page 11

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