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

average hourly wage of more than 300 percent of the federal

must be attached to the tax return on which this credit is claimed.

minimum wage; and (3) have plant and equipment with a total

Federal Form 6765, Credit for Increasing Research Activities, must

cost of more than $500,000,000. Application for this credit must

also be attached if applicable. See instructions for Schedule QR

be made on Schedule RC, and a copy of the schedule reflecting

for more information regarding this credit. KRS 141.395

the amount of credit approved by the Department of Revenue

must be attached to the tax return on which the credit is claimed.

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

The credit is limited to a period of 10 years commencing with

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

the approval of the recycling credit application.

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

the credits reflected on the attached GED–Incentive Program

A taxpayer is entitled to claim the recycling credits in KRS

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

141.390(2)(a) and (b), but cannot claim both for the same

which the learning contract was completed and unused portions

recycling and/or composting equipment. KRS 141.390

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

regarding the program, contact the Education and Workforce

Coal Conversion Tax Credit—A corporation which converts

Development Cabinet, Kentucky Adult Education, Council on

boilers from other fuels to Kentucky coal or which substitutes

Postsecondary Education at (502) 573–5114. The GED–Incentive

Kentucky coal for other fuels in a boiler capable of burning

Program Final Report (DAEL–31) for each employee that completed

coal and other fuels to produce energy for specific purposes

a learning contract during the tax year must be attached to the

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

tax return claiming the credit. KRS 151B.127

141.040 and KRS 141.0401 equal to 4.5 percent of expenditures

for Kentucky coal (less transportation costs). Unused portions

Voluntary Environmental Remediation Tax Credit—The

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

taxpayer must have an agreed order and be approved by the

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

Energy and Environment Cabinet under the provisions of KRS

141.041

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

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

Kentucky Investment Fund Tax Credit—A taxpayer which makes

may be claimed against the taxes imposed by KRS 141.020,

a cash contribution to an investment fund approved by KEDFA

KRS 141.040 and KRS 141.0401. For more information regarding

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

credit for voluntary environmental remediation property, contact

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

the Energy and Environment Cabinet, Division of Compliance

proportional ownership share of all qualified investments made

Assistance at (800) 926–8111. Schedule VERB must be attached

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

to the tax return claiming this credit. KRS 141.418

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

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

Biodiesel Tax Credit—Producers and blenders of biodiesel

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

and producers of renewable diesel are entitled to a tax credit

KEDFA reflecting the amount of credit granted and the year in

against the taxes imposed by KRS 141.020, KRS 141.040 and

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

KRS 141.0401. The taxpayer must file a claim for biodiesel

tax return claiming this credit.

credit with the Department of Revenue by January 15 each year

for biodiesel produced or blended and the renewable diesel

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

produced in the previous calendar year. The department shall

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

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

amount approved by the authority for the investment fund which

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

is proportionally available to the investor. Example: An investor

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

with a 10 percent investment in a fund which has been approved

for a total credit to all investors of $400,000 is limited to $20,000

Kentucky Environmental Stewardship Tax Credit—For tax years

maximum credit in any given year ($400,000 x 10% x 50%).

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

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

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

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

exceeds the tax liabilities, the excess credit may be carried

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

forward, but the carryforward of any excess tax credit shall not

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

increase the limitation that may be claimed in any tax year. Any

stewardship product” means any new manufactured product

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

or substantially improved existing manufactured product that

may first be claimed, shall be lost.

has a lesser or reduced adverse effect on human health and

the environment or provides for improvement to human health

Information regarding the approval process for these credits

and the environment when compared with existing products or

may be obtained from the Cabinet for Economic Development,

competing products that serve the same purpose. A company

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

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

141.068

months after the activation date, the approved company

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

Coal Incentive Tax Credit—Effective for tax returns filed after July

whose jobs were created or retained with base hourly wages

15, 2001, an electric power company or a company that owns and

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

operates a coal-fired electric generating plant may be entitled

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

to a coal incentive tax credit first against the taxes imposed by

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

KRS 141.020, KRS 141.040 and KRS 141.0401 and then against

amount of negotiated inducement that can be claimed by a

tax imposed by KRS 136.120. Application for this credit is made

company for any single tax year may be up to 25 percent of the

on Schedule CI, Application for Coal Incentive Tax Credit, and a

authorized inducement. The agreement shall expire on the earlier

copy of the credit certificate issued by the Kentucky Department

of the date the approved company has received inducements

of Revenue must be attached to the tax return on which the credit

equal to the approved costs of its project, or 10 years from the

is claimed. KRS 141.0405

activation date. For more information, contact the Cabinet for

Economic Development, Department of Financial Incentives at

(502) 564–4554.

Qualified Research Facility Tax Credit—A taxpayer is entitled to a

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

KRS 141.0401 of 5 percent of the qualified costs of construction,

KRS 141.430 was amended to provide that for tax years beginning

remodeling, expanding and equipping facilities in Kentucky for

on or after June 4, 2010, the base tax year is reduced by 50

"qualified research." Any unused credit may be carried forward

percent. The base tax year is the combined income tax and

10 years. Schedule QR, Qualified Research Facility Tax Credit,

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

Instructions For Form 720 - Kentucky Corporation Income Tax And Llet Return - 2013 Page 12

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