Kansas Plugging an Abandoned Oil or Gas Well Credit

Plugging an Abandoned Oil or Gas Well Credit
K-39 Credit for Plugging an Abandoned Oil or Gas Well Rev. 8-19
K-39
(Rev. 8-19)

KANSAS

190818

CREDIT FOR PLUGGING AN ABANDONED OIL OR GAS WELL
For the taxable year beginning,

____________________

, 20

____

; ending

__________________________ ,

20

_______

.

Name of taxpayer (as shown on return)

Social Security Number or Employer ID Number (EIN)

If partner, shareholder or member, enter name of partnership, S corporation, LLC or LLP

Employer ID Number (EIN)

PART A – ABANDONED OIL OR GAS WELL INFORMATION
1. API Number: ______________________________________________________

2. Is this well located on land owned by the above taxpayer?

o Yes o No

If no, you do not qualify for the credit.

Location of Well: _________________________________________________
_____________________________________________________________________

3. Date drilling of this well began: _________________________________

_____________________________________________________________________

Month

Year

(If this date is after January 1, 1970, the well
does not qualify for this credit.)

PART B – PLUGGING COSTS (C Corporations only)
4. Enter the KCC plugging fee for this abandoned well (enclose a copy of the KCC invoice).

4.

________________________

5. All other costs incurred this tax year to plug qualifying well(s).

5.

________________________

6. Total plugging costs eligible for the credit (add lines 4 and 5).

6.

________________________

7. Credit percentage allowed.

7.

________________________

8. Credit (multiply line 6 by line 7).

8.

________________________

9.

________________________

10. Enter the amount of any prior year’s credit in excess of statutory limitation.

10.

________________________

11. Total credit available this tax year (add lines 8, 9, and 10).

11.

________________________

12. Amount of your Kansas tax liability for this tax year after all credits other than this credit.

12.

________________________

13. Credit this tax year (enter the lesser of lines 11 or 12 here and on the appropriate line of
Form K-40, Form K-120, or Form K-41).

13.

________________________

14.

________________________

50%

PART C – COMPUTATION OF THIS YEAR'S CREDIT
9. Amount of carry forward from prior year. Enter the amount from line 14 of the prior year’s
Schedule K-39. (Not applicable for first year credit is claimed.)

If line 13 is less than line 11, complete PART D.

PART D – COMPUTATION OF CREDIT CARRY FORWARD
14. Subtract line 13 from line 11. This is the amount of credit to carry forward to next year’s return.
Enter this amount on line 9 of next year’s Schedule K-39.

INSTRUCTIONS FOR SCHEDULE K-39
GENERAL INFORMATION
K.S.A. 79-32,207 provides for an income tax credit for taxpayers
who make expenditures during the tax year to plug an abandoned
oil or gas well on their land in accordance with the rules and
regulations of the Kansas Corporation Commission (KCC). The
credit is 50% of expenditures made during the tax year. If the credit
exceeds the tax liability for the taxable year the expenditures are
made, any unused credit may be carried forward until used. The
total amount of credits taken by all taxpayers (including any carry
over) may not exceed $250,000 in any fiscal year.
For tax year 2013, and all tax years thereafter, new credits shall
be available to only corporations that are subject to the Kansas
corporate income tax (i.e., C corporations). New credits are not
available to individuals, partnerships, S corporations, limited
liability companies, and other pass-through entities.
Carry Forward of Unused Credits: If this credit was earned prior
to tax year 2013 and a carry forward credit remains available
to a taxpayer, that taxpayer may continue to claim that credit.
However, that carry forward credit shall be subject to limitations
and requirements in place at the time the credit was earned.
An abandoned oil or gas well is any well: 1) that the KCC
(Kansas Corporation Commission) has the authority to plug,
replug, or repair because such well is polluting or is likely to pollute
any usable water strata or supply, or causing the loss of usable
water; 2) on which drilling began prior to January 1, 1970; and 3)
that is located on land owned by the taxpayer claiming this credit.
Fiscal Year Credit Limitation. Qualifying taxpayers will receive
the credit on a “first come, first serve” basis. The credit will be
denied after the statutory fiscal year credit limit of $250,000
has been reached. However, the amount of credit denied for
this reason may be entered on line 10 of the subsequent year’s
Schedule K-39.

SPECIFIC LINE INSTRUCTIONS
IMPORTANT: If you incurred expenses to plug more than
one qualifying abandoned oil or gas well this tax year as
certified by the KCC, retain a schedule for your records
showing the information in Part A for each well as it may be
requested at a later date.
Begin by completing the information at the top of the schedule.
PART A – ABANDONED WELL INFORMATION
LINE 1 – Enter the API (American Petroleum Institute) number and
physical location of the abandoned well.
LINE 2 – Check one of the boxes. Only wells located on land
owned by the taxpayer claiming the credit qualify for the credit.
LINE 3 – Enter date drilling of this well began (only wells on which
drilling began prior to January 1, 1970 qualify for the credit).
PART B – PLUGGING COSTS (C Corporations only)
LINE 4 – Enter the KCC plugging fee for the abandoned well.
Enclose a copy of KCC plugging invoice, even if the fee was
waived by KCC.
LINE 5 – Enter the total of other expenses incurred this tax year
to plug the abandoned well. If you plugged more than one
qualifying well, enter the total for all qualifying wells.

LINE 6 – Enter the total of lines 4 and 5.
LINE 7 – The amount of credit allowed is 50% of the total costs
incurred this tax year.
LINE 8 – Multiply line 6 by line 7. This is the amount of plugging
expenditures available for credit this tax year.
PART C – COMPUTATION OF THIS YEAR'S CREDIT
LINE 9 – Enter any carry forward from line 14 of your prior year’s
Schedule K-39.
LINE 10 – Enter the amount of credit denied from the prior year’s
Schedule K-39 because the fiscal year credit limit had been
reached.
LINE 11 – Add lines 8, 9, and 10 and enter the result. This is your
total credit available this tax year.
LINE 12 – Enter amount of your Kansas tax liability after all credits
other than the credit for plugging an abandoned well.
LINE 13 – Enter the lesser of lines 11 or 12. Enter this amount on
the appropriate line of Form K-40, Form K-41, or Form K-120.
PART D – COMPUTATION OF CREDIT CARRY FORWARD
LINE 14 – Subtract line 13 from line 11. This is the amount of credit
you will have available to enter on line 9 of your next year’s
Schedule K-39.
IMPORTANT: Do not send enclosures with this schedule.
Retain copies of the following documents with your tax
records as the Kansas Department of Revenue reserves
the right to request them as necessary to verify your tax credit.
• KCC Form CP-4.
• An itemized list of expenses with copies of invoices for
plugging costs and the KCC invoice indicating that the
Commission has verified the plugging. List the expenses of
each well separately.
• If applicable, the Kansas Department of Revenue letter of
denied credit for line 10.

TAXPAYER ASSISTANCE
For information about plugging an abandoned oil or gas well or
your certification, contact the KCC:
Kansas Corporation Commission
Conservation Division
266 N Main St, Ste 220
Wichita, KS 67202-1513
Phone: 316-337-6200
Website: kcc.ks.gov/conservation
For assistance in completing this schedule contact the Kansas
Department of Revenue:
Taxpayer Assistance Center
Scott Office Building
120 SE 10th Ave
PO Box 750260
Topeka KS 66699-0260
Phone: 785-368-8222
Fax: 785-291-3614
Additional copies of this credit schedule and other tax forms
are available from our website at: ksrevenue.gov