KIRA: Kentucky Industrial Revitalization Act (KIRA) Tax Credit (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
The Kentucky Industrial Revitalization Act (KIRA) tax credit package reports approved business tax incentives and calculates the allowable KIRA credit. It also tracks approved project costs, wage assessment fees, and tax credits, including local wage assessment credits claimed.
Who files this form
Use the 2025 KIRA package to report approved Kentucky Industrial Revitalization Act tax incentives. The package cover says to use it only if you have received final approval for the KIRA credit from the Cabinet for Economic Development.
The schedules you must complete depend on your Kentucky return:
- Form 720 or 720U: Complete Schedule KIRA and Schedule KIRA-T.
- Form PTE or 725: Complete Schedule KIRA-SP and Schedule KIRA-T.
Include only one incentive project in each KIRA package.
What you'll need
Have these records available:
- Your Kentucky tax return and the entity's federal identification number and Kentucky Corporation/LLET account number.
- The project's location, project number, incentive agreement activation date, and taxable year ending date.
- Your incentive agreement and approved costs verified by the Kentucky Economic Development Finance Authority.
- Project income, Kentucky gross receipts and gross profits, wage assessments, and tax credits claimed.
- For pass-through entities, any project net operating loss carried forward from earlier years.
Required schedules and attachments, as applicable:
- Schedule KIRA or KIRA-SP, plus an updated Schedule KIRA-T.
- Schedule L-ECON for each project's LLET computation. General partnerships do not complete the LLET lines on Schedule KIRA-SP.
- Supporting schedules showing project income and applicable gross receipts or gross profits when the entity has other operations.
- A Department of Revenue approval letter if you use an alternative accounting method or an approved allocation percentage for an expansion of an existing facility.
- Schedule TCS to report tax credits.
Pass-through entities must also use Form PTE(K) to exclude KIRA project net income from owners' distributive share income.
How to file
- Complete a separate KIRA package for each incentive project. Use Schedule KIRA for Form 720 or 720U, or Schedule KIRA-SP for Form PTE or 725.
- Update Schedule KIRA-T with current-year information. Use its Column E amount as the credit limitation on Schedule KIRA, Part III, line 2, or Schedule KIRA-SP, Part I, line 8.
- Complete the applicable credit computation and required supporting schedules. Report tax credits on Schedule TCS.
- Attach the package to Form 720, 720U, PTE, or 725. Attach the updated Schedule KIRA-T to Schedule KIRA or KIRA-SP, and attach a copy to the Wage Assessment Report and Annual Reconciliation.
The supplied text does not give a mailing address or e-file instructions.
Common mistakes
- Combining projects: Include only one incentive project per package and maintain a separate Schedule KIRA-T for each project.
- Claiming incentives outside the agreement term: First-year and last-year incentives must be prorated. Separate period accounting is recommended; a proration factor may be used if it is unavailable.
- Passing credits or losses through to owners: KIRA credits and project losses do not pass through to members, partners, or shareholders. Subtract prior-year project net operating losses before calculating the pass-through entity's credit.
- Entering both credit and estimated payment amounts: On Schedule KIRA-SP, enter an amount on line 9(a) or 9(b), never both.
- Overstating usable credits: Total credits cannot reduce LLET below $175 or income tax liability below zero. Credits must be claimed in the prescribed order.
- Using an incomplete account number: The Kentucky Corporation/LLET account number must have nine digits. Add leading zeros if it has six digits.
Questions people ask
What taxes can the KIRA credit offset?
For corporations, the credit applies against Kentucky corporation income tax and/or the limited liability entity tax (LLET) attributable to the project. Schedule KIRA-SP determines the credit against Kentucky income tax and/or LLET attributable to a pass-through entity's project.
What is Schedule KIRA-T for?
It tracks approved costs, wage assessments, and tax credits over the agreement's duration. Keep a separate schedule for each project and update it each year to determine the credit limitation.
Which approved-cost percentage should I use?
For the taxable year that includes the revitalization agreement date, Schedule KIRA-T calls for 50 percent or 75 percent of verified approved costs. Use the percentage specified in your agreement.
Can a pass-through entity choose an estimated tax payment instead of the credit?
Yes. The approved company may make this election annually for an amount equal to the allowable credit. Enter the amount on Schedule KIRA-SP, line 9(b), and complete Part II. The payment must satisfy owners' tax liabilities and be paid on their behalf, but the instructions state that owners cannot claim any portion of it against their Kentucky income tax liability.
Do I add the income tax credit and LLET credit together for tracking?
No. For Schedule KIRA-T tracking, record the greater of the credit claimed against LLET or income tax, not their combined total.