Schedule RR-E: Application and Credit Certificate of Income/LLET Credit- Railroad Expansion (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
Kentucky Schedule RR-E is the application and credit certificate for the railroad expansion income tax and limited liability entity tax (LLET) credit. It reports qualified railroad expansion expenditures, the requested and approved credit, and the credit used against LLET and cor
Who files this form
Eligible corporations and railway companies claiming the railroad expansion credit must file Schedule RR-E. Eligible taxpayers are:
- A corporation that owns fossil energy resources subject to tax under KRS 143.020 or 143A.020, or biomass resources, and transports those resources using rail facilities.
- A railway company subject to tax under KRS 136.120 that serves a corporation owning those resources.
The credit covers qualified expenditures to expand or upgrade railroad track, including roadbeds, bridges, and related track structures, to accommodate transport of fossil energy or biomass resources.
You do not qualify if you claimed the railroad maintenance and improvement credit under KRS 141.385 on the same expenditures, or if another taxpayer claimed a credit under KRS 141.385 or 141.386 on those expenditures.
When it's due
- 2024 credit application: Submit Schedule RR-E no later than January 15 following the close of the 2024 calendar year. Schedules postmarked or sent after January 15 are void.
- 2024 credit certificate: The Department of Revenue will issue the certificate by March 15 following the close of the 2024 calendar year.
The credit must be claimed in the tax year when the qualified expenditures were paid or incurred.
What you'll need
Have the following information ready to complete Schedule RR-E:
- Entity name, mailing address, business location address, and entity type.
- Federal Identification Number and Kentucky Corporation/LLET Account Number, if applicable.
- Qualified expenditures paid or incurred during the calendar year.
- Signer and contact information requested on the form.
The application must be signed and dated by an authorized corporate officer for Form 720 or 720U, or by a partner or member for Form PTE.
Attach the approved credit certificate, Schedule RR-E, to the tax return claiming the credit. A pass-through entity must include each partner’s or member’s share of the approved credit on Schedule K-1.
How to file
- Enter the entity information and complete Part I. If you answer “yes” to any qualification question, stop. You do not qualify for the credit.
- In Part II, enter qualified expenditures on line 1 and 25% of that amount on line 2. The Department of Revenue determines the approved credit in Part III.
- Sign and date the application, then submit it to the Department of Revenue by fax at 502-564-0058 or email at DORTaxCredits@ky.gov.
The instructions recommend fax or email to ensure proper processing. Credit certification cannot be guaranteed for schedules sent through regular mail. No mailing address is provided.
The department will confirm receipt. If confirmation does not arrive within two weeks, contact the Division of Corporation Tax at 502-564-8139 or DORTaxCredits@ky.gov.
Attach the approved Schedule RR-E to the return claiming the credit. The form specifically directs attachment to Form 720 or 720U. Report the LLET credit on Schedule TCS, Part II, Column E, and the corporation income tax credit in Column F.
Common mistakes
- Continuing after a “yes” answer in Part I. Any “yes” answer means you do not qualify.
- Claiming both railroad credits on the same expenditures. You must choose either the maintenance and improvement credit or the expansion credit, not both.
- Relying on regular mail for certification. The instructions warn that certification cannot be guaranteed for mailed schedules.
- Reducing LLET below its minimum. The credit cannot reduce LLET below $175.
- Carrying unused credit to another period. No carryforward is allowed. The credit must be used in the tax year of the expenditures that generated it.
- Leaving the certificate off the return. Attach Schedule RR-E to the tax return claiming the credit.
Questions people ask
How is the credit calculated?
The credit is 25% of qualified expenditures paid or incurred to expand or upgrade railroad track for transporting fossil energy or biomass resources.
Is there a limit on total credits?
Yes. Total approved credits for all taxpayers are limited to $1,000,000 per calendar year. If the total exceeds that cap, the Department of Revenue allocates the available credit proportionally.
Is the credit refundable or available for carryforward?
No. The credit is nonrefundable and cannot be carried forward. It must be used in the tax year of the qualified expenditures.
Which taxes can the credit offset?
The credit can be applied against corporation income tax and the limited liability entity tax, or LLET. It cannot reduce LLET below the $175 minimum.