Schedule L-ECON: Limited Liability Entity Tax Computation (for an Economic Development Project) (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
Kentucky Schedule L-ECON computes the Limited Liability Entity Tax (LLET) attributable to an economic development project. It reports the project's Kentucky and total gross receipts, cost of goods sold, gross profits, and resulting LLET.
Who files this form
You must complete Schedule L-ECON and include it with your return if you have one or more projects under any of these programs:
- Kentucky Rural Economic Development Act (KREDA)
- Kentucky Industrial Development Act (KIDA)
- Kentucky Jobs Retention Agreement (KJRA)
- Kentucky Industrial Revitalization Act (KIRA)
- Kentucky Jobs Development Act (KJDA)
- Kentucky Business Investment Program (KBI)
- Kentucky Reinvestment Act (KRA)
- Incentives for Energy-related Business Act (IEBA)
- Farming Operation Networking Project (FON)
The schedule computes the Limited Liability Entity Tax (LLET) attributable to an economic development project. Pass-through entities must also complete Form PTE(K) to determine the income generated by each project.
What you'll need
Have the following information and forms ready:
- The credit type and project number.
- The name, federal identification number, and Kentucky Corporation/LLET account number for the entity filing the return. Provide the same information for the entity claiming the credit if it is different.
- Kentucky and total gross receipts attributable to the project, including applicable returns, allowances, and statutory reductions.
- Project cost-of-goods-sold amounts and applicable Kentucky statutory reductions.
- Schedule COGS, which the form directs you to attach. Section A uses the project portion of Column A, line 8; Section B uses the project portion of Column B, line 8.
- The applicable economic development schedule, where you also enter the LLET amount.
- Form PTE(K), if you are a pass-through entity.
How to file
Complete Schedule L-ECON and include it with your return. Attach Schedule COGS as directed on the form.
Enter the LLET amount from Section E, line 1 on the applicable economic development schedule, Part I, line 2 or line 5.
The supplied text does not give a mailing address or instructions for filing by mail or electronically.
Common mistakes
- Missing the $3,000,000 shortcut: If either Section B, line 1 or line 3 is $3,000,000 or less, skip Sections C and D. Enter $175 in Section E, line 1 and on the applicable economic development schedule, Part I, line 2 or line 5.
- Claiming costs for an ineligible activity: The instructions for Section A, line 3(a) say no costs can be claimed for activities other than manufacturing, producing, reselling, retailing, or wholesaling.
- Entering a negative formula result: The line 1 calculations in Sections C and D cannot produce an entered amount below zero.
- Leaving out Schedule COGS: The cost-of-goods-sold lines direct you to attach it.
Questions people ask
What is Schedule L-ECON used for?
It computes the Limited Liability Entity Tax attributable to an economic development project.
What is the difference between Sections A and B?
Section A computes Kentucky gross receipts and gross profits attributable to the project. Section B computes total gross receipts and gross profits attributable to the project.
Do gross receipts include more than sales?
Yes. The instructions say gross receipts include, but are not limited to, sales, rent, proceeds from sales of real and tangible personal property, interest, and dividends.
Which amount goes in Section E after completing Sections C and D?
Enter the lesser of Section C, line 3 or Section D, line 3. Also enter that amount on the applicable economic development schedule, Part I, line 2 or line 5.