Schedule BIO: Application and Credit Certificate of Income Tax/LLET Credit- Biodiesel (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
Kentucky Schedule BIO is the application and credit certificate for the biodiesel income tax and limited liability entity tax (LLET) credit. It reports gallons of biodiesel produced or B100 blended and renewable diesel produced in Kentucky that meet ASTM standards, along with the
Who files this form
Use Schedule BIO to apply for and certify the Kentucky tax credit for biodiesel produced, B100 biodiesel used in blending, or renewable diesel produced in Kentucky that meets current ASTM standards.
Fuel produced or blended in another state does not qualify. Re-blending already blended biodiesel does not qualify.
The credit may be applied against individual income tax, corporation income tax, and/or the limited liability entity tax (LLET).
When it's due
- Application for the 2024 calendar year: Submit Schedule BIO no later than January 15 following the close of the 2024 calendar year. Schedules postmarked or sent after that deadline are void.
- Credit certificate for the 2024 calendar year: The Department of Revenue will issue the certificate by April 15 following the close of the 2024 calendar year.
- Required testing for 2024: Attach laboratory results for July 1 and December 31 of the 2024 calendar year.
What you'll need
Have the following information and attachments ready:
- Entity name, mailing address, location address, and entity type.
- Social Security number for an individual, or FEIN for other entities.
- Kentucky Corporation/LLET account number, if applicable, and Kentucky Special Fuels Dealer’s License account number.
- Gallon totals for B100 biodiesel produced, B100 used in blended biodiesel, and renewable diesel produced in Kentucky during the calendar year.
- Copies of laboratory results for July 1 and December 31 showing that the fuel meets ASTM standards. A blender must provide proof that the B100 used in the blend meets those standards.
- Dates when the biodiesel or renewable diesel failed to meet ASTM standards, if any.
- Signer’s title, signature, date, and contact information.
Attach the Department of Revenue’s credit certificate to the tax return claiming the credit.
How to file
- Check the appropriate entity type. If it is not listed, check “Other” and enter the type.
- Complete Part I with qualifying Kentucky gallon totals, answer the ASTM compliance question, and attach the required testing results. Sign and date the application.
- Submit Schedule BIO to the Department of Revenue by fax at 502-564-0058 or email at DORTaxCredits@ky.gov. Credit certification cannot be guaranteed for schedules sent through regular mail.
- Watch for confirmation of receipt. If none arrives within two weeks, contact the Division of Corporation Tax at 502-564-8139 or DORTaxCredits@ky.gov.
- Leave Parts II and III for the Department of Revenue to complete. Attach the approved credit certificate to the return claiming the credit. The form lists Forms 720, 720U, PTE, 725, 740, 740-NP, and 741.
- Complete Part IV for the credit used. Report LLET credit on Schedule TCS, Part II, Column E; corporation income tax credit on Schedule TCS, Part II, Column F; and individual income tax credit on Form 740, 740-NP, or 741.
Common mistakes
- Submitting late: Schedules postmarked or sent after the January 15 deadline are void.
- Relying on regular mail: The instructions warn that credit certification cannot be guaranteed for mailed schedules.
- Omitting testing proof: Failure to attach proof of ASTM compliance for July 1 and December 31 results in denial of credit for gallons back to the previous testing date.
- Including ineligible fuel: Out-of-state production or blending and re-blending of blended biodiesel do not qualify.
- Carrying unused credit forward: No carryforward is allowed.
- Reducing LLET too far: The credit cannot reduce LLET below the $175 minimum.
- Missing pass-through reporting: A pass-through entity must report each recipient’s pro rata share on Schedule K-1 and notify the department electronically in the required format. Failure to provide the required electronic information forfeits available credits for all partners, members, shareholders, or beneficiaries.
Questions people ask
What is the credit rate?
The rate is $1 per qualifying gallon. Biodiesel, renewable diesel, and renewable chemical production credits share a $10,000,000 annual cap. If total approved credits exceed the cap, the Department of Revenue determines each taxpayer’s share using the allocation formula in Part III.
Is the credit refundable, or can I carry unused credit forward?
No. The credit is nonrefundable, and unused credit cannot be carried forward.
Can the amounts claimed against corporation income tax and LLET differ?
Yes. The form states that the amounts claimed against those taxes can be different. The LLET credit cannot reduce LLET below $175.
What must a pass-through entity send to the department?
In addition to reporting each recipient’s pro rata share on Schedule K-1, the entity must email DORTaxCredits@ky.gov. The email must include a separate plain text or plain ASCII attachment listing each partner’s, member’s, shareholder’s, or beneficiary’s name, address, telephone number, identification number, and distributive share of the credit.