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

Tax Computation Schedule for a KRA Project of a Pass-Through Entity
Schedule KRA-SP
SCHEDULE KRA–SP

*1600010319*

41A720–S36 (10–16)
Commonwealth of Kentucky
DEPARTMENT OF REVENUE

Taxable Year Ending

	
	

__ __ / __ __
Mo.

Yr.  

TAX COMPUTATION SCHEDULE

➤	 See instructions.

(FOR A KRA PROJECT OF A PASS–THROUGH ENTITY)

➤	 Attach to Form 720S, 765 or 765–GP.

KRS 154.34–010 to 120

Name of Pass-through Entity	
Federal Identification Number	
Kentucky Corporation/LLET		
	
		
Account Number
		

__ __ __ __ __ __ __ __ __

Location of Project	
	
	

Activation Date of KRA 	
Incentive Agreement 	

Economic Development
Project Number

 /     / 	

	
City	

__ __ __ __ __ __

	 Mo.	
Day
Yr.
County		

PART I—Computation of KRA Tax Credit and Tax Due
  1.	
  2.	
  3.	
	
  4.	

Kentucky taxable income on KRA project (see instructions)............................................................ 	1	
Net operating loss deduction on KRA project.................................................................................... 	 2	(	
Kentucky taxable income on KRA project after net operating loss deduction
(line 1 less line 2).................................................................................................................................. 	 3		
Income tax on amount from line 3:

	

Taxable Net Income	

	
(a)	 First $3,000......................... 	
	
(b)	 Next $1,000......................... 	
	
(c)	 Next $1,000......................... 	
	
(d)	 Next $3,000......................... 	
	(e)	
Over $8,000 up to $75,000. 	
	(f)	
Over $75,000....................... 	
	

Rate	

00
)	 00
00

Tax

x	2%	
x	3%	
x	4%	
x	5%	
x	5.8%	
x	6%	

00
00
00
00
00
00

(g)	 Total income tax liability of KRA project (add lines 4(a) through 4(f))...................................... 	4(g)	

00

  5.	 LLET on KRA project (see instructions). Not applicable for Form 765–GP...................................... 	5	
00
  6.	 LLET credit allowed (line 5 less $175, but not more than line 4(g)). Not applicable for
	
Form 765–GP......................................................................................................................................... 	6	
00
  7.	 Total tax on KRA project (lines 4(g) and 5 less line 6)....................................................................... 	7	
00
  8.	 Limitation (Column B from Schedule KRA–T).................................................................................... 	8	
00
  9.	 Enter the limitation as provided by KRS 154.34–120(5) (see instructions)...................................... 	9	
00
10.	 Enter the lesser of line 7, 8 or 9 as either:
	
(a)	 KRA tax credit................................................................................................................................ 	 10(a)	00
		or
	
(b)	 Estimated tax payment and complete election in Part II............................................................ 	 10(b)	00
11.	 If line 7 is larger than line 10(a) or 10(b), enter difference here as a liability of the
	
pass–through entity. (Any pass–through entity reflecting a tax liability, complete
	
Tax Payment Summary below and remit payment.)......................................................................... 	11	
00

PART II—Estimated Tax Election
In accordance with KRS 141.415(4)(b),
Name of Pass–through Entity

elects for the taxable year ended	

, in lieu of the KRA tax credit, to have an amount equal

to the lesser of line 7 or line 8 above applied as an estimated tax payment.
➤
Signature of Shareholder, Partner or Member		

TAX PAYMENT SUMMARY (Make check payable to Kentucky State Treasurer.)
Tax	 Interest	Penalty	TOTAL

Date

	 41A720–S36 (10–16)
Commonwealth of Kentucky
DEPARTMENT OF REVENUE

INSTRUCTIONS–SCHEDULE KRA–SP

PURPOSE OF SCHEDULE—This schedule is used by any pass–through
entity which has entered into a tax incentive agreement for a Kentucky
Reinvestment Act (KRA) project to determine the credit allowed against
the Kentucky income tax and LLET in accordance with KRS 141.415
on the income and Kentucky gross receipts or Kentucky gross profits
from the project.
Pass–through entities should first complete Form 720S, 765 or
765–GP to determine net income (loss), deductions, etc., from the
entire operations of the pass–through entity. The pass–through entity
should then complete Schedule KRA–SP to determine the KRA tax
credit and the tax due, if any, from the KRA project. A pass–through
entity is subject to tax as provided by KRS 141.020 and KRS 141.0401
on the net income and the Kentucky gross receipts or Kentucky gross
profits from the project and the KRA credit is applied against the tax
of the KRA project. Consequently, the pass–through entity must use
Form 720S(K), Form 765(K) or Form 765–GP(K) in lieu of Schedule K
(Form 720S), Schedule K (Form 765) or Schedule K (Form 765–GP)
in order to exclude the net income from the KRA project from the
partners, members or shareholders’ distributive share income, and
Schedule LLET(K) in lieu of Schedule LLET in order to exclude the
Kentucky gross receipts or the Kentucky gross profits of the KRA
project from the LLET at the entity level.
Multiple Projects—A pass–through entity with multiple economic
development projects must complete an applicable schedule (Schedule
KREDA–SP, Schedule KIDA–SP, Schedule KEOZ–SP, Schedule KJRA–SP,
Schedule KIRA–SP, Schedule KJDA–SP, Schedule KBI–SP, Schedule
KRA–SP or Schedule IEIA–SP) to determine the credit and net tax
liability, if any, for each project.
Line 1—If the pass–through entity’s only operation is the KRA project,
the amount entered on Line 1 is the net income (loss) from Form 720S,
765 or 765–GP. If the pass–through entity has operations other than the
KRA project, a schedule must be attached reflecting the computation
of the net income (loss) from the KRA project in accordance with the
following instructions, and such amount entered on Line 1.
Separate Facility—In accordance with KRS 141.415(6), if the KRA project
is a totally separate facility, net income, Kentucky gross receipts, and
Kentucky gross profits attributable to the project shall be determined
by a separate accounting method.
Expansion of Existing Facility—In accordance with KRS 141.415(7),
if the KRA project is an expansion to a previously existing facility,
the net income, Kentucky gross receipts and Kentucky gross profits
shall be determined under a separate accounting method reflecting
the entire facility, and the net income, Kentucky gross receipts and
Kentucky gross profits shall be determined by apportioning the net
income, Kentucky gross receipts and Kentucky gross profits of the
entire facility to the economic development project by a formula
approved by the Department of Revenue. A copy of the letter from
the Department of Revenue approving the formula must be attached
to the schedule.
Alternative Me thods—In ac c ordanc e with K RS 141.415 ( 8 ) ,
if the approved company c an show that the nature of the
o p e r a t i o n s a n d a c t i v i t i e s o f t h e a p p r ove d c o m p a ny a r e
such that it is not practical to use a separate accounting method to
determine the net income, Kentucky gross receipts and Kentucky
gross profits from the facility at which the economic development
project is located, the approved company shall use an alternative
method approved by the Department of Revenue. A copy of the letter
from the Department of Revenue approving the alternative method
must be attached to this schedule.
Separate Accounting—If the economic development project is
a totally separate facility, net income shall reflect only the gross
income, deductions, expenses, gains and losses allowed under this

Page 2

chapter directly attributable to the facility and overhead expenses
apportioned to the facility; and Kentucky gross receipts or Kentucky
gross profits shall reflect only Kentucky gross receipts or Kentucky
gross profits directly attributable to the facility.
If the economic development project is an expansion to a previously
existing facility, net income of the entire facility shall reflect only
the gross income, deductions, expenses, gains and losses allowed
under this chapter directly attributable to the facility and overhead
expenses apportioned to the facility; and Kentucky gross receipts and
Kentucky gross profits shall reflect only Kentucky gross receipts and
Kentucky gross profits directly attributable to the facility. Net income,
Kentucky gross receipts and Kentucky gross profits of the entire facility
attributable to the economic development project shall be determined
by apportioning the net income, Kentucky gross receipts and Kentucky
gross profits by a formula approved by the Department of Revenue.
Line 2—Enter the net operating loss from the KRA project, if any, being
carried forward from previous years.
Note: Just as the income from a KRA project does not flow through to
partners, members or shareholders, neither do the losses.The project’s
net operating loss from prior years must be subtracted from the project
income before calculating the KRA credit.
General Partnership—Lines 5 and 6 of this schedule shall not be
completed by a general partnership as a general partnership is not
subject to LLET.
Line 5—Using Schedule LLET, create a new Schedule LLET to compute
the LLET of the KRA project using only the Kentucky gross receipts
and Kentucky gross profits of the project. Enter “KRA” at the top
center of the Schedule LLET and attach it to the tax return.
Limitation—For an approved company which received preliminary
approval for a reinvestment project prior to February 1, 2010, the
amount of incentives allowed in any tax year shall not exceed the
lesser of: (i) the tax liability of the approved company related to the
reinvestment project for that taxable year, or (ii) the approved costs
that have not yet been recovered.
For an approved company which received preliminary approval for
a reinvestment project on or after February 1, 2010, the amount of
incentives allowed in any tax year shall not exceed the lesser of: (i)
the tax liability of the approved company related to the reinvestment
project for that taxable year, (ii) twenty percent (20%) of the total
amount of the approved costs, or (iii) the approved costs that have
not yet been recovered.
Line 9—Enter: (i) the total amount of the approved costs, if the company
received preliminary approval for the project prior to February 1, 2010;
or (ii) twenty percent (20%) of the total amount of the approved costs,
if the company received preliminary approval for the project on or
after February 1, 2010.
Line 10—In lieu of the tax credit, the approved company may elect,
on an annual basis, to apply as an estimated tax payment an amount
equal to the allowable tax credit. Any estimated tax payment shall
be in satisfaction of the tax liability of the partners, members or
shareholders of the pass–through entity, and shall be paid on behalf
of the partners, members or shareholders. Enter an amount on either
(a) or (b), but in no case shall there be an entry on both (a) and (b).
In accordance with KRS 141.415(5), this estimated tax payment is
excluded in determining each partner, member or shareholder’s
distributive share income or credit from a pass–through entity.
Accordingly, the partners, members or shareholders are not entitled
to claim any portion of this estimated tax payment against their
Kentucky income tax liability.