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Kentucky Free Printable  for 2024 Kentucky Kentucky Rural Economic Development Act (KREDA) Tax Credit Packet (OBSOLETE)

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Kentucky Rural Economic Development Act (KREDA) Tax Credit Packet (OBSOLETE)
Schedule KREDA Packet

PACKAGE KREDA Kentucky Rural Economic Development Act (KREDA) Tax Credit 2018 KRS 154.22-010 to 102 KREDA t Only use this package if you have received approval for the KREDA credit per KRS 154.22-010 to 102 by the Cabinet for Economic Development. t See instructions. t Attach to form 720, 720S, 765, 765–GP, or 725. 41A720-S16 KREDA (PKG) (10-18) Page 1 of 8 INSTRUCTIONS—PACKAGE KREDA 2018 Purpose of Package—Use this package to report KREDA tax incentives for which your business entity has been approved per KRS 154.22–010 to 102. You must have received preliminary or final approval in accordance with KRS 154.22 on or before June 26, 2009 to determine the credit allowed. Schedule KREDA-T is used by the company which has entered into a financing agreement or tax incentive agreement for a Kentucky Rural Economic Development Act (KREDA) project to maintain a record of the debt service payments or approved costs, whichever is applicable, wage assessments, and tax credits. General Instructions—Only include one incentive project per Package KREDA. If your business entity files a form 720 with the state of Kentucky, you must complete Schedule KREDA (Page 3) and Schedule KREDA-T (Page 7). If your business entity files form 720S, 765, 765–GP, or 725, you must complete Schedule KREDA-SP (Page 5) and Schedule KREDA-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-S16 KREDA (PKG) (10-18) Page 2 of 8 SCHEDULE KREDA Commonwealth of Kentucky Department of Revenue *1800030252* TAX CREDIT COMPUTATION SCHEDULE (FOR A KREDA PROJECT OF A CORPORATION) 2018 Taxable Year Ending Name of Corporation Federal Identification Number __ __ — __ __ __ __ __ __ __ Location of Project City Activation Date of KREDA Incentive Agreement County Mo.  /    / Day __ __ / __ __ Mo. Yr. Kentucky Corporation/LLET Account Number __ __ __ __ __ __ Economic Development Project Number Yr. PART I—Computation of LLET Excluding KREDA Project   1 LLET from Form 720, Part I, line 1........................................................................................................ 1   2 LLET on KREDA project (see instructions).......................................................................................... 2   3 LLET excluding LLET on KREDA project (line 1 less line 2)............................................................... 3 00 00 00 PART II—Computation of Taxable Net Income Excluding Net Income from KREDA Project and KREDA Tax Credit Section A–Computation of Corporation Tax   1 Enter income tax from Form 720, Part II, line 1................................................................................... 1 00   2 LLET of corporation (Part I, line 1)........................................................................................................ 2 00   3 LLET credit allowed (line 2 less $175, but not more than line 1)....................................................... 3 00   4 Total corporation tax (lines 1 and 2 less line 3)................................................................................... 4 00 Section B–Computation of Tax Excluding KREDA Project   1 Enter taxable net income from Form 720, Part III, line 22.................................................................. 1 00   2 Enter net income from KREDA project; if loss, enter -0-.................................................................... 2 00   3 Taxable net income excluding net income from KREDA project (line 1 less line 2). If line 2 is greater than line 1, enter -0-................................................................................................................. 3 00   4 Income tax liability excluding KREDA project (line 3 multiplied by the tax rate of 5%).................. 4 00   5 LLET excluding LLET on KREDA project (Part I, line 3)...................................................................... 5 00   6 Enter LLET from line 5 less $175, but not more than line 4............................................................... 6 00   7 Total tax excluding KREDA project (lines 4 and 5 less line 6)............................................................ 7 00   8 Total tax attributable to KREDA 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 PART III—Limitation   1 Enter tax liability attributable to KREDA project from Part II, Section B, line 8................................ 1 00   2 Enter limitation from Schedule KREDA-T, Column E.......................................................................... 2 00  3 Allowable KREDA tax credit (lesser of line 1 or line 2)....................................................................... 3 Enter allowable credit on Schedule TCS, Part I, Column E and Column F 00 ä 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 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), SkillsTraining Investment Credit Act (STICA), and Incentives for Energy Independence Act (IEIA). 41A720-S16 (10-18) Page 3 of 8 INSTRUCTIONS—SCHEDULE KREDA 2018 The KREDA 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 maximum 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 LLET attributable to the project per KRS 141.347. State Skills Corporation. A corporation approved for the Kentucky Small Business Tax Credit Program (KSBTC) must attach a copy of the certification from the Kentucky Economic Development Finance Authority. GENERAL INSTRUCTIONS Alternative Methods—Per KRS 141.347(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, 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. Part I—Computation of LLET Excluding KREDA Project Line 2—Use Form 720, Schedule L on page 4 to compute a separate LLET of the KREDA project using only the Kentucky gross receipts and Kentucky gross profits of the project. Enter “KREDA” at the top center of the separate Schedule L and attach it to the tax return when filed. If approved for multiple projects, attach a separate Schedule L of 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. If the corporation has operations other than the KREDA project, it must attach schedules reflecting the computation of Kentucky gross profits and Kentucky gross receipts from the KREDA project per KRS 141.347(6) (b)** or KRS 141.347(7)(b).**** Part II—Computation of Taxable Net Income Excluding Net Income from KREDA Project and KREDA Tax Credit Section B Line 2—Enter net income for KREDA project. If the corporation’s only operation in Kentucky is the KREDA project, the amount entered on Line 1 must also be entered on Line 2. If the corporation has operations other than the KREDA project, it must attach schedules reflecting the computation of the net income from the KREDA project per KRS 141.347(6)(a)* or KRS 141.347(7) (a).*** 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. Part III—Limitation Calculate KREDA tax credit based on the corporation’s tax liability, tax liability attributable to KREDA project, and credit limitation from Schedule KREDA-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, or IEIA) 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 41A720-S16 (10-18) * Per KRS 141.347(6)(a), if the project is a totally separate facility, net income attributable to the project shall be determined by the separate accounting method. ** Per KRS 141.347(6)(b), if the project is a totally separate facility, Kentucky gross receipts or Kentucky gross profits attributable to the project shall be determined under the separate accounting method reflecting only the Kentucky gross receipts or Kentucky gross profits directly attributable to the facility. *** Per KRS 141.347(7)(a), if the KREDA project is an expansion to a previously existing facility, net income attributable to the entire facility shall be determined under the separate accounting method and the net income attributable to the KREDA project shall be determined by apportioning the separate accounting net income of the entire facility to the KREDA project income using a formula approved by the Department of Revenue. A copy of the letter from the Department of Revenue approving the percentage must be attached to this schedule. **** Per KRS 141.347(7)(b), if the KREDA project is an expansion to a previously existing facility, Kentucky gross receipts or Kentucky gross profits attributable to the entire facility shall be determined under the separate accounting method and the Kentucky gross receipts or Kentucky gross profits attributable to the KREDA project shall be determined by apportioning the separate accounting Kentucky gross receipts or Kentucky gross profits of the entire facility to the KREDA project Kentucky gross receipts or Kentucky gross profits. A copy of the letter from the Department of Revenue approving the percentage must be attached to this schedule. Page 4 of 8 SCHEDULE KREDA-SP Commonwealth of Kentucky Department of Revenue TAX COMPUTATION SCHEDULE *1800030254* (FOR A KREDA PROJECT OF A PASS-THROUGH ENTITY) 2018 Taxable Year Ending __ __ / __ __ Mo.    Yr.   Name of Pass-through Entity Federal Identification Number Kentucky Corporation/LLET Account Number __ __ __ __ __ __ __ __ __ Location of Project Activation Date of KREDA Incentive Agreement City __ __ __ __ __ __ Economic Development Project Number  /     / County Mo. Day Yr. PART I—Computation of KREDA Tax Credit and Tax Due   1 Kentucky taxable income on KREDA project (see instructions)....................................................... 1   2 Net operating loss deduction on KREDA project............................................................................... 2 (   3 Kentucky taxable income on KREDA project after net operating loss deduction (line 1 less line 2).................................................................................................................................. 3   4 Income tax liability of KREDA project (line 3 multiplied by the tax rate of 5%).............................. 4   5 LLET on KREDA project (see instructions). Not applicable for Form 765-GP.................................. 5   6 LLET credit allowed (line 5 less $175, but not more than line 4). Not applicable for Form 765-GP......................................................................................................................................... 6   7 Total tax on KREDA project (lines 4 and 5 less line 6)....................................................................... 7   8 Limitation (Column E from Schedule KREDA-T)................................................................................ 8   9 Enter the lesser of line 7 or line 8 as either: (a) KREDA tax credit........................................................................................................................... 9(a) or (b) Estimated tax payment and complete election in Part II............................................................ 9(b) 10 If line 7 is larger than line 9(a) or 9(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.)......................................................................... 10 00 ) 00 00 00 00 00 00 00 00 00 00 PART II—Estimated Tax Election In accordance with KRS 141.347(4)(b), Name of Pass-through Entity elects for the taxable year ended , in lieu of the KREDA tax credit, to have an amount equal to the lesser of line 7 or line 8 above applied as an estimated tax payment. ä Signature of Shareholder, Partner, or Member Date TAX PAYMENT SUMMARY (Make check payable to Kentucky State Treasurer.) Tax Interest Penalty TOTAL 41A720-S18 (10-18) Page 5 of 8 INSTRUCTIONS –SCHEDULE KREDA-SP PURPOSE OF SCHEDULE—This schedule is used by a passthrough entity to determine the credit allowed against the Kentucky income tax and LLET attributable to the project per KRS 141.347. 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 KREDASP to determine the KREDA tax credit and the tax due, if any, from the KREDA 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 KREDA project and the KREDA credit is applied against the tax of the KREDA project. Consequently, the pass-through entity must use Form 720S(K), Form 765(K), or Form 765-GP(K) to exclude the net income from the KREDA 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, KIRASP, KJDA-SP, KBI-SP, KRA-SP, or 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 KREDA project, the amount entered on Line 1 is the net income (loss) from Form 720S, 765, or 765-GP. If the passthrough entity has operations other than the KREDA project, a schedule must be attached reflecting the computation of the net income (loss) from the KREDA project in accordance with the following instructions, and such amount entered 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 141.347(6), if the project is a totally separate facility, net income, Kentucky gross receipts, and Kentucky gross profits attributable to the project must be determined by a separate accounting method. Expansion of Existing Facility—Per KRS 141.347(7), if the KREDA project is an expansion to a previously existing facility, the net income, Kentucky gross receipts, and Kentucky gross profits must be determined under a separate accounting method reflecting the entire facility, and the net income, Kentucky gross receipts, and Kentucky gross profits must 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 percentage must be attached to the schedule. A l t e r n a t i ve M e t h o d s—Pe r K RS 141. 3 47 ( 8 ) , i f t h e 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, and 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. A copy of the letter from the Department of Revenue approving the alternative method must be attached to this schedule. 41A720-S18 (10-18) 2018 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. If the economic development project is an expansion to a previously existing facility, net income of the entire facility 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 and Kentucky gross profits must 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 must 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 KREDA project, if any, being carried forward from previous years. Note: Just as the income from a KREDA 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 KREDA 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 Forms 720S or 765, Schedule L on page 6 or Form 725 on page 4, to compute a separate LLET of the KREDA project using only the Kentucky gross receipts and Kentucky gross profits of the project. Enter “KREDA” at the top center of the separate Schedule L and attach it to the tax return when filed. If approved for multiple projects, attach a separate Schedule L of 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 141.347(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. Page 6 of 8 SCHEDULE KREDA-T Commonwealth of Kentucky Department of Revenue TRACKING SCHEDULE FOR A KREDA PROJECT *1800030253* 2018 Name of Entity Entity Type Corporation Federal Identification Number   Kentucky Corporation/LLET Limited Liability Pass-through Entity       Account Number General Partnership Other __ __ __ __ __ __ __ __ __   __ __ __ __ __ __ _______________________ Location of Project Activation Date of KREDA   Economic Development Incentive Agreement   Project Number City County A Taxable Year Ended B Excess Debt Service Payment/Approved Costs (Col. E – Col. F from Prior Year) _ _ / _ _ / _ _ Mo. Day Yr. C* D E F Debt Service Payment or Approved Costs Employee Wage Assessments Withheld KREDA Credit Limitation (Col. B + C – D) KREDA Tax Credit Claimed – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – + – = – * Debt Service Payment refers to KREDA projects subject to the provisions of KRS 154.22-010 to 154.22-100 in effect prior to July 15, 2002. Approved Costs refers to KREDA projects subject to the provisions of KRS 154.22-010 to 154.22-102 in effect after July 14, 2002. 41A720-S17 (10-18) Page 7 of 8 INSTRUCTIONS—SCHEDULE KREDA-T PURPOSE OF SCHEDULE—This schedule is used to maintain a record of the debt service payments or approved costs, whichever is applicable, wage assessments and tax credits (income tax and LLET) for the duration of the agreement. This information is necessary for the company to determine the limitation of the tax credit for each year of the agreement and to allow the Kentucky Department of Revenue to verify that the credit has been properly computed. GENERAL INSTRUCTIONS The 2002 General Assembly amended KRS 154.22010 to 154.22-100, effective on July 15, 2002. Projects that received preliminary approval from the Kentucky Economic Development Finance Authority (KEDFA) prior to July 15, 2002, and have entered into a financing agreement no later than June 30, 2003, shall be subject to KRS 154.22-010 to 154.22-100 as in effect prior to July 15, 2002. A separate Schedule KREDA-T, Tracking Schedule for a KREDA Project, must be maintained for the duration of each KREDA project. Beginning with the first tax year of the KREDA financing agreement or tax incentive agreement, complete Columns A through F using a separate line for each year of the agreement. The company must attach a copy of this schedule updated with current year information to the Schedule KREDA or Schedule KREDA-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 amount 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. 2018 SPECIFIC INSTRUCTIONS Column A—Enter on each line the ending date (month, day, and year) of the tax year for which the information requested in Columns B through F is entered. Column B—This column will always be blank for the first taxable year of the agreement. For each year thereafter, if the amount entered in Column E for the prior year exceeds the amount entered in Column F for the prior year, enter the difference. If the amount entered in Column F for the prior year equals the amount entered in Column E for the prior year, enter zero (-0-). Column C—Enter the total amount of debt service payment or approved costs, whichever is applicable per the agreement, for the taxable year. Debt service payment includes both principal and interest paid per the financing agreement. Column D—Enter the total amount of employee wage assessments (both the state and local portion) withheld from the salaries of employees during the taxable year. Column E—Enter the result of adding the amounts entered in Columns B and C and subtracting the amount entered in Column D. Also, enter on Schedule KREDA, Part III, Line 2 or Schedule KREDA-SP, Part I, Line 8, whichever is applicable. Column F—The tax credit calculated for each tax can be different; however, for tracking purposes, the maximum amount used against either tax is recorded as the amount claimed. Enter the greater of Column E or Column F from Schedule TCS for this project. Activation Date of KREDA Incentive Agreement—For projects which received preliminary approval from the Kentucky Economic Development Finance Authority (KEDFA) prior to July 15, 1996, enter the date the financing agreement was executed. For projects which received preliminary approval from KEDFA on or after July 15, 1996, enter the date established by the approved company as the activation date for implementation of the inducements authorized by the financing agreement. 41A720-S17 (10-18) Page 8 of 8
Extracted from PDF file 2019-kentucky-schedule-kreda-packet.pdf, last modified October 2018

More about the Kentucky Schedule KREDA Packet Corporate Income Tax Tax Credit

Only use this package if you have received approval for the KREDA credit per KRS 154.22-010 to 102 by the Cabinet for Economic Development. Attach to form 720, 720S, 765, 765GP, or 725. *Available up to 2018

We last updated the Kentucky Rural Economic Development Act (KREDA) Tax Credit Packet (OBSOLETE) in March 2021, and the latest form we have available is for tax year 2019. This means that we don't yet have the updated form for the current tax year. Please check this page regularly, as we will post the updated form as soon as it is released by the Kentucky Department of Revenue. You can print other Kentucky tax forms here.


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Related Kentucky Corporate Income Tax Forms:

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 KREDA Packet.

Form Code Form Name
Schedule KREDA-T Tracking Schedule for a KREDA Project
Schedule KREDA Tax Credit Computation Schedule

Download all KY tax forms 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 KREDA Packet from the Department of Revenue in March 2021.

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Schedule KREDA Packet 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 KREDA Packet

We have a total of seven past-year versions of Schedule KREDA Packet 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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