KJRA: Kentucky Jobs Retention Act (KJRA) Tax Credit (2024)

Who files this form

Use the 2024 KJRA package to report tax incentives for a business approved under the Kentucky Jobs Retention Act. You must have received preliminary or final approval under KRS 154.25 to determine the credit allowed.

• Businesses filing Form 720 or 720U must complete Schedule KJRA and Schedule KJRA-T.
• Businesses filing Form PTE or 725 must complete Schedule KJRA-SP and Schedule KJRA-T.

Include only one incentive project in each package.

What you'll need

Have the following information and schedules ready:

• Your entity name, federal identification number, Kentucky Corporation/LLET account number, and taxable year ending date.
• The project number, location, and incentive agreement activation date.
• Your applicable Kentucky return: Form 720, 720U, PTE, or 725.
• Project income, Kentucky gross receipts, Kentucky gross profits, and any applicable project net operating loss carryforward.
• Records of approved costs, transferred credits, state and local wage assessment credits claimed, and prior-year credit balances for Schedule KJRA-T.
• Schedule L-ECON for the project's LLET computation, where applicable. Attach a separate schedule for each project's computation.

If a pass-through entity has operations beyond the KJRA project, attach a schedule showing how the project's net income or loss was computed. If you use an alternative accounting method, attach the Department of Revenue letter approving it.

Corporations also approved for STICA or MCC must attach the applicable Bluegrass State Skills Corporation certifications. Corporations approved for KSBTC or KSFTC must attach the applicable Kentucky Economic Development Finance Authority certification.

How to file

1. Complete Schedule KJRA for a Form 720 or 720U filing, or Schedule KJRA-SP for a Form PTE or 725 filing. The pass-through instructions direct entities to complete Form PTE first to determine income, deductions, and other amounts from their entire operations.
2. Update Schedule KJRA-T with current-year information. Use a separate tracking schedule for each project and a separate line for each year of the agreement.
3. Attach Schedule KJRA-T to Schedule KJRA or KJRA-SP, and attach the package to your Kentucky return. Also attach a copy of the updated tracking schedule to the Wage Assessment Report and Annual Reconciliation.
4. Attach Schedule L-ECON and any other required supporting schedules or approval letters.
5. Enter tax credits on Schedule TCS. Corporations enter the allowable KJRA credit in Part I, Columns E and F.

The supplied text does not specify a mailing address or an e-file procedure.

Common mistakes

• Using the package without approval. Only use it if you have received KJRA incentive approval.
• Combining projects. Include only one incentive project per package and compute each project's credit separately.
• Claiming incentives outside the agreement term. First- and last-year incentives must be prorated accordingly.
• Passing the credit or project losses through to owners. KJRA credits and project losses do not pass through to partners, members, or shareholders. Prior-year project net operating losses must be subtracted before calculating the credit.
• Completing both election lines. On Schedule KJRA-SP, enter an amount on either line 9(a) or 9(b), never both.
• Completing LLET lines for a general partnership. General partnerships should not complete Schedule KJRA-SP, lines 5 and 6.
• Claiming too much credit. Total credits cannot reduce LLET below $175 or income tax liability below zero. If Schedule KJRA-T, Column H exceeds Column G, the credits claimed exceed the eligible amount.

Questions people ask

What taxes can the KJRA 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 KJRA-SP determines the credit against Kentucky income tax and/or LLET attributable to a pass-through entity's project.

How is the credit limited?

The allowable credit is the lesser of the tax attributable to the project and the limitation from Schedule KJRA-T, Column G. Column G is Columns B through D added together, less Columns E and F.

Can a pass-through entity elect an estimated tax payment instead?

Yes. The approved company may make an annual election to apply an amount equal to the allowable credit as an estimated tax payment instead. Complete Schedule KJRA-SP, line 9(b), and the election in Part II. The instructions state that partners, members, or shareholders may not claim any portion of this payment against their Kentucky income tax liability.

What if the credit differs between income tax and LLET?

For tracking purposes, record the greater of the credit claimed against LLET or income tax in Schedule KJRA-T, Column H, not the sum of the two.

How long must I maintain the tracking schedule?

Maintain a separate Schedule KJRA-T for the duration of each KJRA project, beginning with the first taxable year of the agreement.

Official sources

• https://revenue.ky.gov/Forms/PKG%20KJRA%202024.pdf