Schedule CELL: Application and Credit Certificate of Income Tax/LLET Credit- Cellulosic Ethanol (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
Kentucky Schedule CELL is an application and credit certificate for the cellulosic ethanol income tax and limited liability entity tax (LLET) credit. It reports gallons produced in Kentucky that meet current ASTM standards, the credit approved by the Department of Revenue, and th
Who files this form
Schedule CELL is for taxpayers applying for Kentucky’s cellulosic ethanol tax credit. It reports gallons produced in Kentucky during the calendar year that meet current ASTM standards.
Cellulosic ethanol produced in another state does not qualify. The Department of Revenue certifies each taxpayer’s approved credit.
When it's due
- Application for 2025 production: Submit Schedule CELL no later than January 15 following the close of the 2025 calendar year. Schedules postmarked or sent after that deadline are void.
- Required testing for 2025: Attach laboratory results for July 1 and December 31 of the 2025 calendar year.
- Credit certificate for 2025 production: The Department of Revenue will issue the certificate by April 15 following the close of the 2025 calendar year.
What you'll need
Have these items ready:
- Copies of laboratory results for July 1 and December 31 showing that the cellulosic ethanol meets ASTM standards.
- The number of qualifying gallons produced in Kentucky during the calendar year.
- Any dates during the year when the ethanol failed to meet ASTM standards.
- Entity name, mailing and location addresses, entity type, and contact information.
- Your Social Security number if filing as an individual, or FEIN for other entities.
- Your Kentucky Corporation/LLET account number, if applicable, and Kentucky Special Fuels Dealer’s License account number.
A pass-through entity must report each recipient’s pro rata share of approved credit on Schedule K-1. It must also email the department a separate plain-text or plain ASCII attachment listing each partner, member, shareholder, or beneficiary’s name, address, telephone number, identification number, and distributive share of the credit.
Attach the approved credit certificate to the tax return claiming the credit.
How to file
- Check your entity type. If it is not listed, check “Other” and enter the type.
- Complete the identifying information and Part I with qualifying gallons produced in Kentucky. Answer the ASTM-standard question and list any failure dates.
- Attach the required laboratory results, then sign and date the application. Leave Parts II and III for the Department of Revenue.
- Fax to 502-564-0058 or email to DORTaxCredits@ky.gov. Credit certification cannot be guaranteed for schedules sent by regular mail.
The department will confirm receipt. If you do not receive confirmation within two weeks, contact the Division of Corporation Tax at 502-564-8139 or DORTaxCredits@ky.gov.
After certification, complete Part IV for the credit used:
- LLET credit: Schedule TCS, Part II, Column E.
- Corporation income tax credit: Schedule TCS, Part II, Column F.
- Individual income tax credit: Form 740, 740-NP, or 741.
Attach Schedule CELL and the credit certificate to the applicable return: Form 720, 720U, PTE, 725, 740, 740-NP, or 741.
Common mistakes
- Submitting late: Schedules postmarked or sent after January 15 following the production calendar year are void.
- Relying on regular mail: The instructions warn that credit certification cannot be guaranteed for mailed schedules. Use fax or email to ensure proper processing.
- Omitting testing proof: Failure to provide proof of meeting ASTM standards on July 1 and December 31 results in denial of credit for gallons back to the previous testing date.
- Skipping pass-through reporting: Failure to provide the required recipient information electronically in the specified format forfeits available credits for all partners, members, shareholders, or beneficiaries.
- Carrying unused credit forward: No carryforward is allowed.
- Reducing LLET too far: The credit cannot reduce LLET below the $175 minimum.
Questions people ask
How much is the credit?
The rate is $1 per qualifying gallon. The annual cap for all taxpayers is $5,000,000. If total approved applications exceed that cap, unused ethanol tax credit cap can increase it, but only as much as needed for applicants to receive $1 per gallon. The department determines each taxpayer’s approved credit.
Is the credit refundable or available to carry forward?
No. The credit is nonrefundable, and unused credit cannot be carried forward.
Can I claim credit for ethanol produced outside Kentucky?
No. Cellulosic ethanol produced in another state does not qualify.
Which taxes can the credit offset?
The credit can apply against individual income tax, corporation income tax, and/or LLET. Amounts claimed against corporation income tax and LLET may differ. The LLET credit cannot reduce LLET below $175.
Who completes Parts II and III?
The Department of Revenue completes these parts to determine the approved gallons and credit. Part III is used when total approved credit exceeds the annual cellulosic ethanol tax credit cap.