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

Tax Computation Schedule for a KJDA Project of a Pass-Through Entity
41A720-S29.p65
SCHEDULE

KJDA-SP

For taxable year ended

TAX COMPUTATION SCHEDULE

41A720-S29
(12-04)

__ __ / __ __
Mo.

(FOR A KJDA PROJECT OF
S CORPORATIONS OR PARTNERSHIPS)

Commonwealth of Kentucky
DEPARTMENT OF REVENUE

Yr.

KRS 154.24-010 to 160
Name of S Corporation or Partnership

Federal Identification Number

Kentucky Account Number
(if applicable)

__–_______
Location of Project

City

_____ _

Activation Date of KJDA Service
and Technology Agreement

Economic Development
Project Number

__/__/__

County

Mo.

Day

Yr.

PART I. Computation of KJDA Tax Credit and Tax Due
1. Kentucky taxable net income from KJDA project (see instructions) ................................................... 1
2. Compute tax on amount from line 1:
Taxable Net Income
(a)
(b)
(c)
(d)
(e)
(f)

Rate

Tax

First $3,000 .......................
x
2%
Next $1,000 ......................
x
3%
Next $1,000 ......................
x
4%
Next $3,000 ......................
x
5%
All over $8,000 .................
x
6%
Total income tax liability of KJDA project (add lines 2(a) through 2(e)) ................................. 2(f)

3. Limitation (Column F from Schedule KJDA-T) ...................................................................................... 3
4. Enter lesser of line 2(f) or line 3 as either:
(a) KJDA tax credit ............................................................................................................................. 4(a)
or
(b) Estimated tax payment and complete election in Part II .......................................................... 4(b)
5. If line 2(f) is larger than line 4(a) or 4(b), enter difference here as the net income tax
liability of the S corporation or partnership. (Any partnership reflecting a tax liability
complete Tax Payment Summary below and remit payment. Any S corporation reflecting
a tax liability enter this amount on Form 720S, Part II, line 10, and remit payment.) ....................... 5

PART II. Estimated Tax Election

In accordance with KRS 141.407(4)(b),
Name of S Corporation or Partnership

elects for the taxable year ended

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

to the lesser of line 2(f) or line 3 above applied as an estimated tax payment.

➤
Signature of Corporate Officer or General Partner

Title

Date

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

Interest

Penalty

TOTAL

Form 720S, Kentucky S Corporation Income and License Tax Return, or Form 765, Kentucky Partnership Income
Return, including this schedule must be mailed to Economic Development Tax Credits, Corporation Income and
License Tax Branch, Kentucky Department of Revenue, P.O. Box 181, Frankfort, Kentucky 40602-0181.

INSTRUCTIONS—SCHEDULE KJDA-SP
PURPOSE OF SCHEDULE—This schedule is to be used by
any S corporation or partnership which has entered into a
service and technology agreement for a Kentucky Jobs
Development Act (KJDA) project to determine the credit
allowed against the Kentucky income tax liability in
accordance with KRS 141.407 on the income from the project.
GENERAL INSTRUCTIONS
S corporations and partnerships generally are not subject to
Kentucky income tax at the entity level; rather, the shareholders or partners of such entities are subject to Kentucky
income tax in their individual or corporate capacity on their
distributive share of the entity's net income. However, for
purposes of determining the KJDA income tax credit, S corporations and partnerships are subject to tax on net income
from the project, and the credit is applied against the entity's
tax liability. The net income subject to tax at the entity level
and the credit are excluded from the shareholders' or partners' distributive share of income or credits. Use Kentucky
Schedule K for S Corporations With Economic Development
Projects (Form 720S) or Kentucky Schedule K for Partnerships With Economic Development Projects (Form 765).
The S corporation or partnership should first complete Form
720S, Kentucky S Corporation Income and License Tax
Return, or Form 765, Kentucky Partnership Income Return,
to determine net income (loss), deductions, etc., from the
entire operations of the S corporation or partnership. The
S corporation or partnership should then complete Schedule
KJDA-SP to determine the KJDA tax credit and the tax due,
if any, by the S corporation or partnership after application
of the credit.
License Tax—This credit applies only to income tax and cannot be applied against the corporation license tax.
Multiple Projects—An S corporation or partnership with
multiple economic development projects must complete an
applicable schedule (Schedule KREDA-SP, Schedule
KIDA-SP, Schedule KJDA-SP, Schedule KIRA-SP or
Schedule KEOZ-SP) to determine the credit and net tax
liability, if any, for each project.
PART I INSTRUCTIONS
Line 1—If the S corporation's or partnership's only operation
is the KJDA project, the amount entered on line 1 is the net
of both separately stated and nonseparately stated income
and deduction items from Form 720S or Form 765, respectively. If the corporation has operations other than the KJDA
project, schedules must be attached reflecting the computation of the net income from the KJDA project in accordance
with the following instructions, and such amount entered
on line 1.
Separate Facility—In accordance with KRS 141.407(6), if the
project is a totally separate facility, net income attributable
to the project shall be determined by the separate accounting method.

Expansion of Existing Facility—In accordance with KRS
141.407(7), if the KJDA project is an expansion to an existing facility, the net income of the entire facility shall be
determined by the separate accounting method and multiplied by a percentage approved by the Kentucky Department
of Revenue to determine net income attributable to the
project. A copy of the letter from the Department of Revenue
approving the percentage must be attached to this schedule.
Alternative Methods—In accordance with KRS 141.407(8), 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 from the facility at which the project is located,
the approved company shall determine net income
attributable to the project using an alternative method
approved by the Department of Revenue. Thus, if any method
other than separate accounting is used to determine the
net income from the project, a copy of the letter from the
Department of Revenue approving the alternative method
must be attached to this schedule.
Computing Net Income by Separate Accounting—To
compute net income from the facility by separate accounting,
gross income directly attributable to the facility shall be
reduced by expenses directly attributable to the facility and
overhead expenses apportioned to the facility. The amounts
of gross receipts and expenses to be included in this separate
accounting computation should be determined in accordance
with KRS 141.010 in effect for the year.
All gross receipts generated by the sale of product(s) produced by the facility as well as any miscellaneous income
generated by the facility shall be included as gross income
directly attributable to the facility.
Expenses directly attributable to the facility include, but are
not limited to: cost of goods sold, labor, rent, depreciation,
interest, supplies, maintenance, legal fees and selling
expenses.
Overhead expenses apportioned to the facility are general
corporate expenses that are not directly attributable to a
specific facility. Overhead expenses shall be reduced by
income items such as interest, royalties, etc., that are not
directly attributable to a specific facility before being
apportioned to the facility. The net expenses shall be
apportioned to the facility by a ratio of total receipts of the
facility over total receipts of the corporation.
Line 4—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. Enter
an amount on either (a) or (b); in no case should there be an
entry on both (a) and (b). In accordance with KRS 141.347(5)
this estimated payment is excluded in determining each
shareholder's distributive share of net income and credits.
Thus, the shareholders of the S corporation or partners in a
partnership are not entitled to claim any portion of this
estimated payment against their Kentucky individual income
tax liability.