KJDA: Kentucky Jobs Development Act (KJDA) Tax Credit (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
The Kentucky Jobs Development Act (KJDA) tax credit package reports approved business tax incentives and calculates the allowable KJDA credit. It includes schedules for recording project costs, wage assessments, and tax credits, and attaches to Form 720, 720U, PTE, or 725.
Who files this form
Use the 2025 KJDA package only if your business has received approval for the Kentucky Jobs Development Act credit from the Cabinet for Economic Development. The package requires preliminary or final approval on or before June 26, 2009.
The schedules you must 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.
Include only one incentive project in each KJDA package.
When it's due
For the 2025 tax year, the package requires preliminary or final KJDA approval on or before June 26, 2009. This is an approval cutoff, not a tax return filing deadline.
The package does not state a filing due date.
What you'll need
Have these forms and records ready:
- Your applicable Kentucky return: Form 720, 720U, PTE, or 725.
- Your federal identification number, Kentucky Corporation/LLET account number, project number, location, and incentive agreement activation date.
- Project records showing income, deductions, Kentucky gross receipts, and Kentucky gross profits needed for the calculation.
- An updated Schedule KJDA-T, including prior-year balances, approved costs, rental payments, wage assessments, and any in-lieu-of credits received.
- Schedule L-ECON for the project's separate limited liability entity tax (LLET) calculation, when applicable. Attach a separate schedule for each project's LLET computation.
- Schedule TCS to report tax credits.
If you have operations outside the KJDA project, attach the required schedules showing how you calculated the project's income and, for corporations, Kentucky gross receipts and gross profits.
If you use an approved allocation percentage for an expansion or an approved alternative accounting method, attach the Department of Revenue approval letter.
Pass-through entities must also use Form PTE(K) to exclude the project's net income from owners' distributive share income.
How to file
- 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 Schedule KJDA or KJDA-SP.
- Attach the package and required supporting schedules to your Kentucky return.
- Enter tax credits on Schedule TCS. Corporations enter the allowable KJDA credit in Part I, Columns E and F.
Also attach a copy of the updated Schedule KJDA-T to the Wage Assessment Report and Annual Reconciliation.
The package does not provide a mailing address or e-file instructions.
Common mistakes
- Combining projects: Include only one incentive project per package and maintain a separate Schedule KJDA-T for each project.
- Claiming incentives outside the agreement term: Prorate incentives in the first and last years of the agreement.
- Passing credits or losses through to owners: KJDA credits and project losses do not pass through to partners, members, or shareholders. Subtract prior-year project net operating losses before calculating the credit.
- Completing both election lines: On Schedule KJDA-SP, enter an amount on either line 9(a) or line 9(b), never both.
- Exceeding credit limits: Total credits claimed cannot reduce LLET below $175 or income tax liability below zero.
- 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 KJDA credit offset?
The credit applies against Kentucky income tax and/or LLET attributable to the approved project. Schedule KJDA is used for corporations, and Schedule KJDA-SP is used for pass-through entities.
Why do I need Schedule KJDA-T every year?
It tracks approved costs, wage assessments, in-lieu-of credits, and tax credits throughout the service and technology agreement. It is used to determine the annual credit limitation. Maintain a separate schedule for each project, with a separate line for each year.
Does a general partnership complete the LLET lines on Schedule KJDA-SP?
No. A general partnership should not complete lines 5 and 6 because it is not subject to LLET.
How are the first and last years of the agreement handled?
Incentives are available only during the agreement term and must be prorated in the first and last years. Separate-period accounting is recommended. If it is unavailable, the package allows a proration factor based on the days within the agreement term divided by the total days in the taxable year.