Form 765-Gp - Kentucky General Partnership Income Return

credit is made on Schedule CI, Application for Coal Incentive Tax

percent of the average hourly wage for the county in which the

Credit, and a copy of the credit certificate issued by the

project is to be undertaken. The maximum amount of negotiated

Kentucky Department of Revenue must be attached to the tax

inducement that can be claimed by a company for any single tax

return on which the credit is claimed. KRS 141.0405

year may be up to 25 percent of the authorized inducement. The

agreement shall expire on the earlier of the date the approved

Qualified Research Facility Tax Credit—A taxpayer is entitled

company has received inducements equal to the approved costs

to a credit against the taxes imposed by KRS 141.020, KRS

of its project, or 10 years from the activation date. For more

141.040 and KRS 141.0401 of 5 percent of the qualified costs of

information, contact the Cabinet for Economic Development,

construction, remodeling, expanding and equipping facilities

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

in Kentucky for “qualified research.” Any unused credit may

be carried forward 10 years. Schedule QR, Qualified Research

KRS 141.430 was amended to provide that for tax years

Facility Tax Credit, must be attached to the tax return on which

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

this credit is claimed. Federal Form 6765, Credit for Increasing

by 50 percent. The base tax year is the combined income tax

Research Activities, must also be attached if applicable. See

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

instructions for Schedule QR for more information regarding

ends immediately prior to the activation date. If the base tax

this credit. KRS 141.395

year is for a taxable year beginning before January 1, 2007, the

LLET will not apply. KRS 141.430

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

Caution: An approved company under the Environmental

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

Stewardship Act shall not be entitled to the recycling credit

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

provided under the provisions of KRS 141.390 for equipment

of the credits reflected on the attached GED–Incentive Program

used in the production of an environmental stewardship

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

project.

which the learning contract was completed and unused portions

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

Clean Coal Incentive Tax Credit—Effective for tax years ending

regarding the program, contact the Education and Workforce

on or after December 31, 2006, a nonrefundable, nontransferable

Development Cabinet, Kentucky Adult Education, Council on

credit against taxes imposed by KRS 136.120, KRS 141.020, KRS

Postsecondary Education. The GED–Incentive Program Final

141.040 or KRS 141.0401 shall be allowed for a clean coal facility.

Report (DAEL–31) for each employee that completed a learning

As provided by KRS 141.428, a clean coal facility means an

contract during the tax year must be attached to the tax return

electric generation facility beginning commercial operation on

claiming the credit. KRS 151B.127

or after January 1, 2005, at a cost greater than $150 million that

is located in the Commonwealth of Kentucky and is certified by

Voluntary Environmental Remediation Tax Credit—The

the Energy and Environment Cabinet as reducing emissions of

taxpayer must have an agreed order and be approved by the

pollutants released during generation of electricity through the

Energy and Environment Cabinet under the provisions of KRS

use of clean coal equipment and technologies. The amount of

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

the credit shall be $2 per ton of eligible coal purchased that is

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

used to generate electric power at a certified clean coal facility,

may be claimed against the taxes imposed by KRS 141.020,

except that no credit shall be allowed if the eligible coal has been

KRS 141.040 and KRS 141.0401. For more information regarding

used to generate a credit under KRS 141.0405 for the taxpayer,

credit for voluntary environmental remediation property,

parent or subsidiary. KRS 141.428

contact the Energy and Environment Cabinet at (502) 564–3350.

Schedule VERB must be attached to the tax return claiming this

credit. KRS 141.418

Ethanol Tax Credit—Producers of ethanol are entitled to a tax

credit against the taxes imposed by KRS 141.020, KRS 141.040

Biodiesel Tax Credit—The 2007 Second Extraordinary Session

and KRS 141.0401. The taxpayer must file a claim for ethanol

amended KRS 141.422 to include renewable diesel to be subject

credit with the Department of Revenue by January 15 each

to the biodiesel tax credit. Producers and blenders of biodiesel

year for ethanol produced in the previous calendar year. The

and producers of renewable diesel are entitled to a tax credit

department shall issue a credit certification (Schedule ETH)

against the taxes imposed by KRS 141.020, KRS 141.040 and

to the taxpayer by April 15. The credit certification must be

KRS 141.0401. The taxpayer must file a claim for biodiesel

attached to the tax return claiming this credit. KRS 141.4242

credit with the Department of Revenue by January 15 each year

and 103 KAR 15:110

for biodiesel produced or blended and the renewable diesel

produced in the previous calendar year. The department shall

Cellulosic Ethanol Tax Credit —Producers of cellulosic ethanol

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

are entitled to a tax credit against the taxes imposed by KRS

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

141.020, KRS 141.040 and KRS 141.0401. The taxpayer must

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

file a claim for ethanol credit with the Department of Revenue

by January 15 each year for cellulosic ethanol produced in the

Kentucky Environmental Stewardship Tax Credit—For tax

previous calendar year. The department shall issue a credit

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

certification (Schedule CELL) to the taxpayer by April 15. The

company may be entitled to a credit against the taxes imposed

credit certification must be attached to the tax return claiming

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

this credit. KRS 141.4244 and 103 KAR 15:120

and the LLET of the approved company generated by or

arising out of a project as determined under KRS 154.48–020.

Energy Efficiency Products Tax Credit—A nonrefundable tax

An “environmental stewardship product” means any new

credit against the tax imposed under KRS 141.020 or 141.040

manufactured product or substantially improved existing

and KRS 141.0401 is allowed as follows:

manufactured product that has a lesser or reduced adverse

effect on human health and the environment or provides for

improvement to human health and the environment when

(i) For a taxpayer’s residence or single-family or multifamily

compared with existing products or competing products that

residential rental unit, 30% of the installed cost of qualified

serve the same purpose. A company must have eligible costs

insulation, qualified energy-efficient windows and storm doors,

of at least $5 million and within six months after the activation

and qualified energy property that meets the performance,

date, the approved company compensates a minimum of 90

quality, and certification standards of and that would have been

percent of its full–time employees whose jobs were created or

eligible for the federal credit for residential property expenditures

retained with base hourly wages equal to either: (1) 75 percent

under 26 U.S.C. § 25C, as it existed on December 31, 2007. The

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

total credit is limited to $500.

Form 765-Gp - Kentucky General Partnership Income Return - 2012 Page 11

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