KJRA: Kentucky Jobs Retention Act (KJRA) Tax Credit (2025)

Who files this form

Use the 2025 KJRA package only if your business has received approval for the Kentucky Jobs Retention Act incentive under KRS 154.25-010 to 050. You must have preliminary or final approval to determine the allowed credit.

• 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 KJRA package.

What you'll need

Have the following information and schedules ready:

• Your business name, federal identification number, and Kentucky Corporation/LLET account number.
• The project location, project number, and incentive agreement activation date.
• Your applicable Kentucky return: Form 720, 720U, PTE, or 725.
• Project income, Kentucky gross receipts, and Kentucky gross profits needed for the credit calculation.
• Schedule KJRA-T, updated with current-year approved costs, transferred credits, wage assessment credits, and tax credits claimed.
• Schedule TCS to report tax credits.

Additional attachments may be required:

• Schedule L-ECON for each project's separate LLET calculation, where applicable. General partnerships do not complete the LLET lines on Schedule KJRA-SP.
• A schedule showing project net income or loss if a pass-through entity has operations other than the KJRA project.
• The Department of Revenue approval letter if you use an alternative accounting method.
• For corporations also approved for STICA or MCC, the Bluegrass State Skills Corporation certification(s). For corporations also approved for KSBTC or KSFTC, the Kentucky Economic Development Finance Authority certification.

How to file

Attach the completed KJRA package to Form 720, 720U, PTE, or 725, as applicable.

1. Complete Schedule KJRA for a Form 720 or 720U filer, or Schedule KJRA-SP for a Form PTE or 725 filer.
2. Update Schedule KJRA-T for the current year and attach a copy to Schedule KJRA or KJRA-SP filed with the Kentucky tax return. Also attach a copy to the Wage Assessment Report and Annual Reconciliation.
3. Attach Schedule L-ECON and other required supporting schedules or approval letters, as applicable.
4. Report tax credits on Schedule TCS. For corporations, enter the allowable KJRA credit in Part I, Columns E and F.

The package does not provide a mailing address or e-filing directions.

Common mistakes

• Using the package without approval. Only businesses approved for the KJRA incentive may use it.
• Combining projects. Include only one incentive project per package and maintain a separate Schedule KJRA-T for each project.
• Claiming incentives outside the agreement term. First- and last-year incentives must be prorated accordingly.
• Passing the credit through to owners. KJRA credits do not pass through to members, partners, or shareholders. Project losses do not pass through either. Prior-year project net operating losses must be subtracted from project income before calculating the credit.
• Completing both payment options. On Schedule KJRA-SP, enter an amount on line 9(a) or 9(b), never both.
• Overclaiming credits. Total credits claimed cannot reduce LLET below $175 or income tax liability below zero. Credits must be claimed in the order prescribed by KRS 141.0205.
• 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 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. For pass-through entities, it applies against Kentucky income tax and/or LLET attributable to the project.

What is Schedule KJRA-T used for?

It tracks approved costs and tax credits throughout the agreement and helps determine each year's credit limit. Maintain a separate schedule for each project, using a separate line for each year of the agreement.

Can a pass-through entity choose an estimated tax payment instead of the credit?

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

What if the credit against income tax differs from the credit against LLET?

For tracking purposes, record the greater of the two credits claimed in Schedule KJRA-T, Column H, rather than adding them together.

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 permits a proration factor based on the days of the taxable year covered by the agreement.

Official sources

• https://revenue.ky.gov/Forms/PKG%20KJRA%20(2025)%20(0003).pdf