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Kentucky Incentives for Energy Independence Act (IEIA) Tax Credit Package
Extracted from PDF file 2023-kentucky-schedule-ieia-package.pdf, last modified July 2022Incentives for Energy Independence Act (IEIA) Tax Credit Package
PACKAGE IEIA Incentives For Energy Independence Act (IEIA) Tax Credit 2022 KRS 154.27-010 to 100 IEIA t Only use this package if you have received approval for the IEIA credit per KRS 154.27-010 to 100 by the Cabinet for Economic Development. t See instructions. t Attach to form 720, 720U, PTE, or 725. 41A720-S50 IEIA (PKG) (10-22) Page 1 of 8 INSTRUCTIONS—PACKAGE IEIA 2022 Purpose of Package – Use this package to report IEIA tax incentives for which your business entity has been approved per KRS 154.27–010 to 100. You must have received preliminary or final approval in accordance with KRS 154.27 to determine the credit allowed. Schedule IEIA-T is used by the company which has entered into a financing agreement or tax incentive agreement for an Incentives for Energy Independence Act (IEIA) project to maintain a record of approved costs and tax credits. General Instructions – Only include one incentive project per Package IEIA. If your business entity files a form 720 or 720U with the state of Kentucky, you must complete Schedule IEIA (Page 3) and Schedule IEIA-T (Page 7). If your business entity files form PTE or 725, you must complete Schedule IEIA-SP (Page 5) and Schedule IEIA-T (Page 7). First and Last Year Prorations—Tax incentives are only available to be claimed during the term of the incentive agreement. Tax incentives claimed during the first and last years of an incentive agreement must be prorated accordingly. Separate period accounting is recommended, but a proration factor may be used if separate period accounting is not available. To determine the proration factor in the first year of the incentive agreement, divide the number of days from the activation date until the end of your taxable year by the total number of days in your taxable year. Multiply the total income by the proration factor to determine the project income when separate period accounting is not available. To determine the proration factor in the last year of the incentive agreement, divide the number of days from the first day of your taxable year through the end of the incentive agreement term by the total number of days in your taxable year. Multiply the total income by the proration factor to determine the project income when separate period accounting is not available. 41A720-S50 IEIA (PKG) (10-22) Page 2 of 8 SCHEDULE IEIA Commonwealth of Kentucky Department of Revenue TAX CREDIT COMPUTATION SCHEDULE (FOR AN IEIA PROJECT OF A CORPORATION) Taxable Year Ending Name of Corporation Federal Identification Number __ __ — __ __ __ __ __ __ __ Location of Project Activation Date of IEIA Incentive Agreement 2022 __ __ / __ __ Mo. Yr. Kentucky Corporation/LLET Account Number __ __ __ __ __ __ Economic Development Project Number / / City County Mo. Day Yr. PART I—Computation of LLET Excluding IEIA Project 1 LLET from Form 720, Part II, line 1 or Form 720U, Schedule U8, Section E, line 1................................ 1 2 LLET on IEIA project from Schedule L–ECON (see instructions)............................................................ 2 3 LLET excluding LLET on IEIA project (line 1 less line 2).......................................................................... 3 PART II—Computation of Taxable Net Income Excluding Net Income from IEIA Project and IEIA Tax Credit Section A–Computation of Corporation Tax 1 Enter income tax from Form 720, Part III, line 1 or Form 720U, Schedule U5, Section D, line 8........... 1 2 LLET of corporation (Part I, line 1).......................................................................................................... 2 3 LLET credit allowed (line 2 less $175, but not more than line 1)............................................................. 3 4 Total corporation tax (lines 1 and 2 less line 3)....................................................................................... 4 Section B–Computation of Tax Excluding IEIA Project 1 Enter taxable net income from Form 720, Part I, line 43 or Form 720U, Schedule U5, Section D, line 7...................................................................................................................................... 1 2 Enter net income from IEIA project; if loss, enter -0-............................................................................... 2 3 Taxable net income excluding net income from IEIA project (line 1 less line 2). If line 2 is greater than line 1, enter -0-.................................................................................................................... 3 4 Income tax liability excluding IEIA project (line 3 multiplied by the tax rate of 5%)................................. 4 5 LLET excluding LLET on IEIA project (Part I, line 3)............................................................................... 5 6 Enter LLET from line 5 less $175, but not more than line 4.................................................................... 6 7 Total tax excluding IEIA project (lines 4 and 5 less line 6)...................................................................... 7 8 Total tax attributable to IEIA project (Section A, line 4 less Section B, line 7) Continue to Part III and enter this amount on Part III, line 1................................................................... 8 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 PART III—Limitation 1 Enter tax liability attributable to IEIA project from Part II, Section B, line 8............................................. 1 00 2 Enter limitation from Schedule IEIA-T, Column C................................................................................... 2 00 3 Allowable IEIA tax credit (lesser of line 1 or line 2)................................................................................. 3 Enter allowable credit on Schedule TCS, Part I, Column E and Column F 00 Economic development project means a project authorized under the Kentucky Rural Economic Development Act (KREDA), Metropolitan College Consortium Tax Credit (MCC), Kentucky Small Business Tax Credit Program (KSBTC), Kentucky Selling Farmer Tax Credit (KSFTC), Kentucky Industrial Development Act (KIDA), Kentucky Jobs Retention Agreement (KJRA), Kentucky Industrial Revitalization Act (KIRA), Kentucky Jobs Development Act (KJDA), Kentucky Business Investment Program (KBI), Kentucky Reinvestment Act (KRA), Skills Training Investment Credit Act (STICA), Incentives for Energy Independence Act (IEIA), and Incentives for Energy-related Business Act (IEBA). 220312 41A720-S50 IEIA (10-22) Page 3 of 8 INSTRUCTIONS—SCHEDULE IEIA 2022 The IEIA tax credit is applied against the corporation income tax imposed by KRS 141.040 and/or the limited liability entity tax (LLET) imposed by KRS 141.0401. The amount of tax credit against each tax can be different; however, for tracking purposes, the larger amount of credit used against either tax is the amount that is used for the tax year. PURPOSE OF SCHEDULE—This schedule is used by a corporation to determine the credit allowed against the Kentucky corporation income tax and/or LLET attributable to the project per KRS 141.421. GENERAL INSTRUCTIONS Part I—Computation of LLET Excluding IEIA Project Line 2— Use Schedule L–ECON to compute a separate LLET of the IEIA project using only the Kentucky gross receipts and Kentucky gross profits of the project and attach it to the return when filed. If approved for multiple projects, attach a separate Schedule L–ECON for each project’s LLET computation. In the first and last years of each project, only calculate Kentucky gross receipts and gross profits received during the term of the incentive agreement. Part II—Computation of Taxable Net Income Excluding Net Income from IEIA Project and IEIA Tax Credit Section B Line 2— Enter net income from IEIA project. If the corporation’s only operation in Kentucky is the IEIA project, the amount entered on Line 1 must also be entered on Line 2. In the first and last years of each project, only calculate Kentucky net income received during the term of the incentive agreement. See form for computation. 41A720-S50 IEIA (10-22) Part III—Limitation Calculate IEIA tax credit based on the corporation’s tax liability, tax liability attributable to IEIA project, and credit limitation from Schedule IEIA-T. Enter credit on Schedule TCS, Part I, Column E and Column F. A corporation with more than one economic development project must separately compute the tax credit derived from each project. Complete the applicable tax computation schedules (KREDA, KIDA, KJRA, KIRA, KJDA, KBI, KRA, IEIA, or IEBA) for each project. A corporation approved for the Skills Training Investment Credit Act (STICA) or Metropolitan College Consortium Tax Credit (MCC) must attach a copy of the certification(s) from the Bluegrass State Skills Corporation. A corporation approved for the Kentucky Small Business Tax Credit Program (KSBTC) or Kentucky Selling Farmer Tax Credit (KSFTC) must attach a copy of the certification from the Kentucky Economic Development Finance Authority. Alternative Methods—Per KRS 141.421(7), if the approved company can show that the nature of the operations and activities of the approved company are such that it is not practical to use separate accounting to determine net income, Kentucky gross receipts, or Kentucky gross profits from the facility where the project is located, the approved company must determine net income, Kentucky gross receipts, or Kentucky gross profits attributable to the project using an alternative method approved by the Department of Revenue. Thus, if any method other than separate accounting is used, a copy of the letter from the Department of Revenue approving the alternative method must be attached to this schedule. Page 4 of 8 SCHEDULE IEIA-SP TAX COMPUTATION SCHEDULE (FOR AN IEIA PROJECT OF A 2022 PASS–THROUGH ENTITY) Commonwealth of Kentucky Department of Revenue Taxable Year Ending __ __ / __ __ Mo. Yr. Name of Pass-through Entity Federal Identification Number Kentucky Corporation/LLET Account Number __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Location of Project City Activation Date of IEIA Incentive Agreement Economic Development Project Number / / County Mo. Day Yr. PART I—Computation of IEIA Tax Credit and Tax Due 1 Kentucky taxable income on IEIA project (see instructions).................................................................. 1 2 Net operating loss deduction on IEIA project......................................................................................... 2 ( ) 3 Kentucky taxable income on IEIA project after net operating loss deduction (line 1 less line 2)................................................................................................................................... 3 4 Income tax liability of IEIA project (line 3 multiplied by the tax rate of 5%)............................................ 4 5 LLET on IEIA project from Schedule L–ECON (see instructions). Not applicable for general partnerships............................................................................................................................ 5 6 LLET credit allowed (line 5 less $175, but not more than line 4). Not applicable for general partnerships............................................................................................................................ 6 7 Total tax on IEIA project (lines 4 and 5 less line 6)................................................................................. 7 8 Limitation (Column C from Schedule IEIA-T)......................................................................................... 8 9 Enter the lesser of line 7 or line 8 as either: (a) IEIA tax credit.................................................................................................................................. 9(a) or (b) Estimated tax payment and complete election in Part II................................................................. 9(b) 10 Tax Due on the Project—If line 7 is larger than line 9(a) or 9(b), enter the difference here as a liability of the pass–through entity and add to the tax due on Form PTE, Part II, line 16 or Form 725, Part II, line 15............................................................................................... 10 00 00 00 00 00 00 00 00 00 00 00 PART II—Estimated Tax Election In accordance with KRS 141.421(4)(b), elects for the taxable year ended Name of Pass–through Entity , in lieu of the IEIA 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 220326 41A720-S52 IEIA-SP (10-22) Date Page 5 of 8 INSTRUCTIONS–SCHEDULE IEIA–SP PURPOSE OF SCHEDULE—This schedule is used by a pass–through entity to determine the credit allowed against the Kentucky income tax and/or LLET attributable to the project per KRS 141.421. Pass–through entities should first complete Form PTE to determine net income (loss), deductions, etc., from the entire operations of the pass–through entity. The pass– through entity should then complete Schedule IEIA–SP to determine the IEIA tax credit and the tax due, if any, from the IEIA project. A pass–through entity is subject to tax per KRS 141.020 and KRS 141.0401 on the net income and the Kentucky gross receipts or Kentucky gross profits from the IEIA project and the IEIA credit is applied against the tax of the IEIA project. Consequently, the pass–through entity must use Form PTE(K) to exclude the net income from the IEIA project from the partners’, members’, or shareholders’ distributive share income. Multiple Projects—A pass–through entity with multiple economic development projects must complete the applicable schedules (KREDA–SP, KIDA–SP, KJRA–SP, KIRA–SP, KJDA–SP, KBI–SP, KRA–SP, IEIA–SP, or IEBA‑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 IEIA project, the amount entered on Line 1 is the net income (loss) from Form PTE. If the pass–through entity has operations other than the IEIA project, a schedule must be attached reflecting the computation of the net income (loss) from the IEIA project in accordance with the following instructions and enter on Line 1. In the first and last years of each project, only calculate Kentucky taxable income received during the term of the incentive agreement. Separate Facility—Per KRS 141.421(6), if the project is a totally separate facility, net income, Kentucky gross receipts, or Kentucky gross profits attributable to the project must be determined by a separate accounting method. Alternative Methods—Per KRS 141.421(7), if the approved company can show that the nature of the operations and activities of the approved company are such that it is not practical to use a separate accounting method to determine the net income, Kentucky gross receipts, or Kentucky gross profits from the facility where the economic development project is located, the approved company must use an alternative method approved by the Department of Revenue. 2022 Separate Accounting—If the economic development project is a totally separate facility, net income must 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 or Kentucky gross profits must reflect only Kentucky gross receipts or Kentucky gross profits directly attributable to the facility. Line 2—Enter the net operating loss from the IEIA project, if any, being carried forward from previous years. Note: Just as the income from a IEIA 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 IEIA credit. General Partnership—Lines 5 and 6 of this schedule should not be completed by a general partnership as a general partnership is not subject to LLET. Line 5— Use Schedule L–ECON to compute a separate LLET of the IEIA project using only the Kentucky gross receipts and Kentucky gross profits of the project and attach it to the return when filed. If approved for multiple projects, attach a separate Schedule L–ECON for each project’s LLET computation. In the first and last years of each project, only calculate Kentucky LLET received during the term of the incentive agreement. Line 9—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 must be in satisfaction of the tax liability of the partners, members, or shareholders of the pass–through entity and must be paid on behalf of the partners, members, or shareholders. Enter an amount on either (a) or (b), but in no case should there be an entry on both (a) and (b). Per KRS 141.421(5), this estimated tax payment is excluded in determining each partner’s, member’s, 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. A copy of the letter from the Department of Revenue approving the alternative method must be attached to this schedule. 41A720-S52 IEIA-SP (10-22) Page 6 of 8 SCHEDULE IEIA-T TRACKING SCHEDULE FOR AN IEIA PROJECT Commonwealth of Kentucky Department of Revenue 2022 Name of Entity Entity Type Corporation Federal Identification Number Limited Liability Pass-through Entity General Partnership Other ________________________________________ __ __ __ __ __ __ __ __ __ Location of Project Activation Date of IEIA Incentive Agreement City County A Taxable Year Ended Kentucky Corporation/LLET Account Number __ __ __ __ __ __ Economic Development Project Number _ _ / _ _ / _ _ Mo. Day Yr. B C D E Carry Forward Balance of Approved Incentive for Wage Assessments Carry Forward Balance of Approved Incentive for Income Tax and LLET IEIA Wage Assessments Credit Claimed IEIA Tax Credit Claimed on Return 220323 41A720-S51 IEIA-T (10-22) Page 7 of 8 INSTRUCTIONS—SCHEDULE IEIA-T PURPOSE OF SCHEDULE—This schedule is used to maintain a record of the approved costs permitted to be recovered through: (i) Kentucky income tax imposed by KRS 141.040 or 141.020, and the LLET imposed by KRS 141.0401; or (ii) wage assessments. GENERAL INSTRUCTIONS A separate Schedule IEIA–T, Tracking Schedule for an IEIA Project, must be maintained for the duration of each IEIA project. Beginning with the first taxable year of the IEIA agreement, complete Columns A through E using a separate line for each year of the agreement. The company must attach a copy of this schedule updated with the current year information to the Schedule IEIA or Schedule IEIA-SP which is filed with the Kentucky tax return. All tax credits are entered on Schedule TCS, Tax Credit Summary Schedule. The total tax credits calculated may exceed the tax credits that can be used. Credits must be claimed in the order prescribed by KRS 141.0205. Total credits claimed cannot reduce the LLET below the $175 minimum nor the income tax liability below zero. SPECIFIC INSTRUCTIONS Column A—Enter on each line the ending date (month, day, and year) of the taxable year for which the information in Columns B through E is entered. 41A720-S51 IEIA-T (10-22) 2022 Column B—For the first taxable year of the agreement, enter the approved incentive to be recovered by wage assessments per the Tax Incentive Agreement. For each subsequent year: (i) if the amount entered in Column B for the prior year exceeds the amount entered in Column D for the prior year, enter the difference; or (ii) if the amount entered in Column D for the prior year equals the amount entered in Column B for the prior year, enter zero (–0–). Column C—For the first taxable year of the agreement, enter the approved incentive to be recovered by tax credits against income tax and LLET per the Tax Incentive Agreement. For each subsequent year: (i) if the amount entered in Column C for the prior year exceeds the amount entered in Column E for the prior year, enter the difference; or (ii) if the amount entered in Column E for the prior year equals the amount entered in Column C for the prior year, enter zero (–0–). Column D—Enter the IEIA wage assessments withheld during the current year. IEIA wage assessments taken cannot exceed the balance of the incentive in Column B. Column E—The tax credit calculated for each tax can be different; however, for tracking purposes, the greater of the credit claimed against LLET or income tax is recorded as the amount claimed. Enter the greater of Column E or Column F from Schedule TCS for this project, if applicable. Otherwise, enter zero (-0-). Page 8 of 8
Schedule IEIA package
More about the Kentucky Schedule IEIA package Corporate Income Tax Tax Credit TY 2023
We last updated the Incentives for Energy Independence Act (IEIA) Tax Credit Package in February 2024, so this is the latest version of Schedule IEIA package, fully updated for tax year 2023. You can download or print current or past-year PDFs of Schedule IEIA package directly from TaxFormFinder. You can print other Kentucky tax forms here.
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TaxFormFinder has an additional 129 Kentucky income tax forms that you may need, plus all federal income tax forms. These related forms may also be needed with the Kentucky Schedule IEIA package.
| Form Code | Form Name |
|---|---|
| Schedule IEIA-SP | Tax Computation Schedule for a IEIA Project of a Pass-Through Entity |
| Schedule IEIA-T | Tracking Schedule for an IEIA Project |
View all 130 Kentucky Income Tax Forms
Form Sources:
Kentucky usually releases forms for the current tax year between January and April. We last updated Kentucky Schedule IEIA package from the Department of Revenue in February 2024.
Schedule IEIA package is a Kentucky Corporate Income Tax form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Kentucky Schedule IEIA package
We have a total of nine past-year versions of Schedule IEIA package in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
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