KJDA: Kentucky Jobs Development Act (KJDA) Tax Credit (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
This Kentucky package reports tax incentives approved under the Kentucky Jobs Development Act (KJDA) and calculates the allowable tax credit. It also tracks approved project costs, wage assessments, and tax credits, including local wage assessment credits claimed.
Who files this form
Use the 2024 KJDA package only if your business has received approval for the Kentucky Jobs Development Act credit from the Cabinet for Economic Development. The package says you must have received preliminary or final approval on or before June 26, 2009.
The schedules you complete depend on your Kentucky return:
- Form 720 or 720U: Complete Schedule KJDA and Schedule KJDA-T.
- Form PTE or 725: Complete Schedule KJDA-SP and Schedule KJDA-T.
Use a separate package for each incentive project.
What you'll need
Have these records ready:
- Your entity name, federal identification number, Kentucky Corporation/LLET account number, and taxable year ending date.
- The project's location, project number, and incentive agreement activation date.
- Your applicable Kentucky return and records of project income, Kentucky gross receipts, and Kentucky gross profits.
- Records for Schedule KJDA-T, including verified start-up costs for the activation year, rental payments, state wage assessments, local wage assessment credits, in-lieu-of credits, and prior-year credit balances.
Attach these items when applicable:
- Schedule L–ECON for each project's LLET computation.
- Schedules showing project income computations when the entity has other operations. Corporations with other operations must also attach schedules showing the project's Kentucky gross receipts and gross profits computations.
- The Department of Revenue approval letter for an alternative accounting method or an approved allocation percentage for an expansion project.
- An updated Schedule KJDA-T with Schedule KJDA or KJDA-SP. Also attach a copy to the Wage Assessment Report and Annual Reconciliation.
How to file
Attach the KJDA package to Form 720, 720U, PTE, or 725, as applicable.
- Complete one package for each project.
- Complete Schedule KJDA for a corporation filing Form 720 or 720U, or Schedule KJDA-SP for an entity filing Form PTE or 725.
- Update Schedule KJDA-T with current-year information and attach it to the applicable computation schedule filed with your Kentucky return.
- Include the required supporting schedules and approval letters. Enter tax credits on Schedule TCS, the Tax Credit Summary Schedule.
The supplied text does not give a mailing address or e-file instructions.
Common mistakes
- Combining projects in one package. Only one incentive project may be included per KJDA package.
- 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 KJDA credits or project losses through to owners. The instructions say these do not pass through to partners, members, or shareholders. Prior-year project net operating losses must be subtracted from project income before calculating the credit.
- Filling in both options on Schedule KJDA-SP, line 9. Enter an amount on either line 9(a) or line 9(b), never both.
- Completing LLET lines for a general partnership. General partnerships should not complete Schedule KJDA-SP, lines 5 and 6.
- Claiming more credit than allowed. Total credits claimed cannot reduce LLET below $175 or income tax liability below zero. Credits must be claimed in the prescribed order.
Questions people ask
What is Schedule KJDA-T used for?
It tracks approved costs, wage assessments, in-lieu-of credits, and tax credits throughout the service and technology agreement. Maintain a separate schedule for each project and use a separate line for each taxable year.
How is a corporation's allowable KJDA credit determined?
Schedule KJDA, Part III, uses the lesser of the tax liability attributable to the project or the credit limitation from Schedule KJDA-T, Column G.
Can a pass-through entity choose an estimated tax payment instead of the credit?
Yes. The approved company may make that choice annually for an amount equal to the allowable credit and must complete the election in Schedule KJDA-SP, Part II. The instructions also state that partners, members, or shareholders are not entitled to claim any portion of that estimated payment against their Kentucky income tax liability.
What if the credit against income tax differs from the credit against LLET?
For tracking purposes, Schedule KJDA-T, Column H, records the greater of the credit claimed against income tax or LLET, rather than adding the two amounts together.