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41A720-S24 (10-12)

Page 2

Commonwealth of Kentucky

INSTRUCTIONS—SCHEDULE KIRA

DEPARTMENT OF REVENUE

The KIRA tax credit is applied against 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;

however, for tracking purposes, the maximum amount of credit used against either tax is the amount that is used

for the tax year.

PURPOSE OF SCHEDULE—This schedule is used by

the Kentucky Small Business Investment Credit Program

a corporation which has entered into a tax incentive

(KSBIC) must attach a copy of the certification from the

agreement for a Kentucky Industrial Revitalization Act

Kentucky Economic Development Finance Authority.

(KIRA) project to determine the credit allowed against the

Kentucky corporation income tax and LLET attributable

Alternative Methods—In accordance with KRS 141.403(8),

to the project in accordance with KRS 141.403.

if the approved company can show that the nature of the

operations and activities of the approved company are

GENERAL INSTRUCTIONS

such that it is not practical to use separate accounting

to determine net income, Kentucky gross receipts or

Part I—Computation of LLET Excluding KIRA Project

Kentucky gross profits from the facility at which the

Line 2—Using Schedule LLET, create a new Schedule

project is located, the approved company shall determine

LLET to compute the LLET of the KIRA project using

net income, Kentucky gross receipts or Kentucky gross

only the Kentucky gross receipts and Kentucky gross

profits attributable to the project using an alternative

profits of the project. Enter “KIRA” at the top center of

method approved by the Department of Revenue. Thus,

the Schedule LLET and attach it to the tax return.

if any method other than separate accounting is used,

a copy of the letter from the Department of Revenue

If the corporation has operations other than the

approving the alternative method must be attached to

KIRA project, it must attach schedules reflecting the

this schedule.

computation of Kentucky gross profits and Kentucky

gross receipts from the KIRA project in accordance with

In accordance with KRS 141.403(6)(a), if the project is a

KRS 141.403(6)(b)** or KRS 141.403(7)(b).****

totally separate facility, net income attributable to the

project shall be determined by the separate accounting

Part II—Computation of Taxable Net Income Excluding

method.

Net Income from KIRA Project and KIRA Tax Credit

In accordance with KRS 141.403(6)(b), if the project is

Section B

a totally separate facility, Kentucky gross receipts or

Kentucky gross profits attributable to the project shall

Line 2—Enter net income for KIRA project. If the

be determined under the separate accounting method

corporation’s only operation in Kentucky is the KIRA

reflecting only the Kentucky gross receipts or Kentucky

project, the amount entered on Line 1 must be entered

gross profits directly attributable to the facility.

on Line 2. If the corporation has operations other than

the KIRA project, it must attach schedules reflecting the

***

In accordance with KRS 141.403(7)(a), if the KIRA

computation of the net income from the KIRA project in

project is an expansion to a previously existing facility,

accordance with KRS 141.403(6)(a)* or KRS 141.403(7)

net income attributable to the entire facility shall be

(a).***

determined under the separate accounting method and

the net income attributable to the KIRA project shall be

See form for computation.

determined by apportioning the separate accounting

net income of the entire facility to the KIRA project

Part III—Limitation

income using a formula approved by the Department of

Calculate KIRA tax credit based on the corporation’s tax

Revenue. A copy of the letter from the Department of

liability, tax liability attributable to KIRA project, and

Revenue approving the percentage must be attached

credit limitation from Schedule KIRA-T. Enter credit on

to this schedule.

Schedule TCS, Part I, Column E and Column F.

****

In accordance with KRS 141.403(7)(b), if the KIRA project

A corporation with more than one economic development

is an expansion to a previously existing facility, Kentucky

projec t must separately compute the tax credit

gross receipts or Kentucky gross profits attributable to

derived from each project. Complete an applicable tax

the entire facility shall be determined under the separate

computation schedule (Schedule KREDA, Schedule

accounting method and the Kentucky gross receipts or

KIDA, Schedule KEOZ, Schedule KJRA, Schedule

Kentucky gross profits attributable to the KIRA project

KIRA, Schedule KJDA, Schedule KBI, Schedule KRA or

shall be determined by apportioning the separate

Schedule IEIA) for each project. A corporation approved

accounting Kentucky gross receipts or Kentucky gross

for the Skills Training Investment Credit Act (STICA) or

profits of the entire facility to the KIRA project Kentucky

Metropolitan College Consortium Tax Credit (MCC) must

gross receipts or Kentucky gross profits. A copy of the

attach a copy of the certification(s) from the Bluegrass

letter from the Department of Revenue approving the

State Skills Corporation. A corporation approved for

percentage must be attached to this schedule.

Schedule Kira - Tax Credit Computation Schedule (For A Kira Project Of A Corporation) Page 2

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