Form 765-Gp - Kentucky General Partnership Income Return

Tax Credit Summary

Kentucky Small Business Investment Credit Program—KRS

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

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

141.384 provides a (Kentucky Small Business Investment

the credit approved in the first year of eligibility.

Credit Program (KSBIC)) nonrefundable tax credit against the

taxes imposed by KRS 141.020 or 141.040 and KRS 141.0401. A

small business shall not be eligible to apply for the credit and

For taxable years beginning after December 31, 2004, a

receive final approval for the credit until one year after the small

taxpayer which purchases recycling and /or composting

business: (a) creates and fills one or more eligible positions

equipment to be used exclusively in Kentucky for recycling or

composting post-consumer waste material that qualifies as a

over the base employment, and that position or positions are

created and filled for twelve months; and (b) invests $5,000 or

Major Recycling Project is entitled to a nonrefundable credit

more in qualifying equipment or technology. The maximum

against the taxes imposed by KRS 141.020, KRS 141.040 and

amount of credits that may be committed in each fiscal year

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

by the Kentucky Economic Development Finance Authority

installed cost of the recycling or composting equipment limited

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

(KEDFA) shall be capped at $3 million. The maximum amount

of credit for each small business for each year shall not exceed

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

$25,000. To claim the KSBIC credit, a copy of the notification

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

received from KEDFA must be attached to the tax return. A

recycling or composting equipment to be used exclusively in

partner, member or shareholder of a pass-through entity shall

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

average hourly wage of more than 300 percent of the federal

attach a copy of Schedule K-1, Form 720S, 765 or 765-GP to the

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

partner’s, member’s or shareholder’s tax return each year to

claim the tax credit. The tax credit not used during the year of

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

approval by KEDFA may be carried forward up to five years.

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

the amount of credit approved by the Department of Revenue

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

Skills Training Investment Tax Credit—To claim the STICA credit,

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

a copy of the Bluegrass State Skills Corporation certification(s)

reflecting the amount of credit awarded must be attached. The

the approval of the recycling credit application.

credit shall be claimed on the income tax return filed for the

taxable year during which the final authorizing resolution is

A taxpayer is entitled to claim the recycling credits in KRS

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

adopted by the Bluegrass State Skills Corporation. If the amount

recycling and/or composting equipment. KRS 141.390

of the credit exceeds the income tax liability for the taxable year

during which the final authorizing resolution is adopted by the

Bluegrass State Skills Corporation, the excess may be carried

Kentucky Investment Fund Tax Credit—A taxpayer which makes

forward for three successive years. If the credit claimed is being

a cash contribution to an investment fund approved by KEDFA

carried forward from a prior year, attach a schedule reflecting

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

the computation of the amount of credit available to be carried

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

forward in addition to the Bluegrass State Skills Corporation

proportional ownership share of all qualified investments made

certification(s). KRS 141.405

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

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

Certified Rehabilitation Tax Credit—This credit is allowed only

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

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

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

Heritage Council. Credit is allowed against the taxes imposed

KEDFA reflecting the amount of credit granted and the year in

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

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

qualified rehabilitation expenses on certified historic structures.

tax return claiming this credit.

Information regarding this credit is available at

ky.gov. KRS 171.397

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

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

Unemployment Tax Credit—If a taxpayer has hired a Kentucky

credit amount approved by the authority for the investment

resident classified as unemployed for at least 60 days and

fund which is proportionally available to the investor. Example:

the resident remains in the employ of the taxpayer for 180

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

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

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

the taxpayer may be entitled to the unemployment tax credit

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

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

x 10% x 50%).

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

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

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

must be certified by the Education and Workforce Development

exceeds the tax liabilities, the excess credit may be carried

Cabinet, Department of Workforce Investment, Office of

forward, but the carryforward of any excess tax credit shall

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

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

the certification must be maintained by the taxpayer. For

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

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

credit may first be claimed, shall be lost.

be attached to the return claiming this credit. KRS 141.065

Information regarding the approval process for these credits

Recycling/Composting Tax Credit—A taxpayer, which purchases

may be obtained from the Cabinet for Economic Development,

recycling and/or composting equipment to be used exclusively

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

in Kentucky for recycling or composting post-consumer waste

141.068

materials, may be entitled to a nonrefundable credit against

the taxes imposed by KRS 141.020, KRS 141.040 and KRS

Coal Incentive Tax Credit—Effective for tax returns filed after

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

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

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

owns and operates a coal-fired electric generating plant may

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

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

of credit approved by the Department of Revenue must be

imposed by KRS 141.020, KRS 141.040 and KRS 141.0401 and

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

then against tax imposed by KRS 136.120. Application for this

Form 765-Gp - Kentucky General Partnership Income Return - 2012 Page 10

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