Kentucky Tax Credit Computation Schedule for a KESA Project of a Pass-Through Entity

Tax Credit Computation Schedule for a KESA Project of a Pass-Through Entity
Schedule KESA-SP
SCHEDULE KESA-SP
41A720KESA-SP (10-16)
Commonwealth of Kentucky
DEPARTMENT OF REVENUE

*1600010324*

	
	
	➤ 	 See instructions.

Taxable Year Ending

	

__ __ / __ __
Mo.	Yr.

TAX CREDIT COMPUTATION SCHEDULE
(FOR A KESA PROJECT OF A PASS-THROUGH ENTITY)
KRS 154.48-010 to 035

➤	 Attach to Form 720S, 725, 765 or 765-GP.
Name of Pass-through Entity	
Federal Identification Number	
		

Kentucky Corporation/LLET
Account Number

Location of Project	
	
	

Environmental Stewardship
Project Number

	

City	

Activation Date of KESA	
Incentive Agreement	

 /    
/
	

	 Mo.	
Day
Yr.
County		

PART I—Base Year Net Tax
  1.	 Compute the tax imposed by KRS 141.020.........................................................................	1	
  2.	 Compute the tax imposed by KRS 141.0401. Not applicable for Form 765-GP................	2	
  3.	 LLET credit permitted by KRS 141.0401(3). Not applicable for Form 765-GP...................	3	
  4.	 Base year tax (total of lines 1 and 2 less line 3)..................................................................	4	
  5.	 Base year net tax (enter 50% of line 4)................................................................................	5	

00
00
00
00
00

PART II—Current Year Net Tax
  1.	 Compute the tax imposed by KRS 141.020.........................................................................	1	
  2.	 Compute the tax imposed by KRS 141.0401. Not applicable for Form 765-GP................	2	
  3.	 LLET credit permitted by KRS 141.0401(3). Not applicable for Form 765-GP...................	3	
  4.	 Current year net tax (total of lines 1 and 2 less line 3).......................................................	4	

00
00
00
00

PART III—KESA Credit
  1.	 Enter credit available: (Part II, Line 4 less Part I, Line 5; if less than -0-, enter -0-)........... 	1	
  2.	 Enter 25% of total authorized inducement per KESA agreement..................................... 	2	
  3.	 Enter the lesser of line 1 or line 2, and enter this amount on Schedule TCS,
	
Part II, Column E and on Schedule K of Form 720S, 765 or 765-GP.................................. 	3	

00
00
00

The KESA tax credit is applied against the income tax imposed by KRS 141.020 or KRS 141.040 and the limited liability
entity tax (LLET) imposed by KRS 141.0401. The amount of tax credit against each tax can be different.

	 41A720KESA-SP (10-16)

Page 2

Commonwealth of Kentucky
DEPARTMENT OF REVENUE

INSTRUCTIONS—SCHEDULE KESA-SP
The KESA tax credit is applied against the income tax imposed by KRS 141.020 or KRS 141.040 and the limited liability
entity tax (LLET) imposed by KRS 141.0401. The amount of tax credit against each tax can be different.

PURPOSE OF SCHEDULE—For taxable years ending
on or after June 4, 2010, this schedule is used by a
pass-through entity which has an approved Kentucky
Environmental Stewardship Act (KESA) project
as provided by KRS 154.48–025 to determine the
environmental stewardship tax credit allowed against
its LLET attributable to the project in accordance with
KRS 141.430 and distributed to its partners, members
or shareholders.
KRS 141.430(2) provides that for each taxable year
beginning with the year in which the activation date
defined in KRS 154.48–010(1) occurs and ending
with the year in which the project terminates, a
limited liability pass-through entity’s environmental
stewardship tax credit is determined by subtracting
the base year tax from the current year combined
individual income tax and LLET; however, the tax credit
claimed for any single tax year cannot exceed 25% of
the total authorized inducement. The base year tax is
the combined individual income tax and LLET for the
first taxable year after December 31, 2005, that ends
immediately prior to the activation date. If the base
year is for a taxable year beginning before January 1,
2007, the LLET will not apply. For taxable years ending
on or after June 4, 2010, the base year tax is reduced
by fifty percent (50%).
GENERAL INSTRUCTIONS
Part I—Base Year Net Tax
Enter the tax computed before the application of any
tax credits.
Line 1—This is the income tax imposed by KRS 141.020

on the taxable net income of the pass-through entity
for the base year.
Line 2—This is the LLET imposed by KRS 141.0401
on the limited liability pass-through entity for the
base year (not applicable for years beginning before
January 1, 2007).
Line 3—This is the LLET credit permitted by KRS
141.0401(3) for the base year (not applicable for years
beginning before January 1, 2007).
Part II—Current Year Net Tax
Enter the tax computed before the application of any
tax credits.
Line 1—This is the income tax imposed by KRS 141.020
on the taxable net income of the pass-through entity
for the current taxable year.
Line 2—This is the LLET imposed by KRS 141.0401 on
the limited liability pass-through entity for the current
taxable year.
Line 3—This is the LLET credit permitted by KRS
141.0401(3) for the current taxable year.
Part III—KESA Credit
Line 3—This is the lesser of Part III, Line 1 or Line 2.
For this taxable year, enter on Schedule KESA-T,
Column C the greater of Part III, Line 3 or the tax credit
allowed against the applicable tax.