Schedule VERB: Voluntary Environmental Remediation Tax Credit (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
Kentucky Schedule VERB is used to claim the nonrefundable Voluntary Environmental Remediation Tax Credit for expenditures on qualifying property. It records the certified expenditures, allowable credit, current-year credit claimed, and remaining balances for income tax and limite
Who files this form
Use Schedule VERB to claim the Voluntary Environmental Remediation Tax Credit for expenditures on qualifying property against Kentucky individual income tax, corporation income tax, or limited liability entity tax (LLET).
The Kentucky Energy and Environment Cabinet must determine that the property qualifies and verify receipts for the expenditures. After verification, the Department of Revenue must notify the taxpayer of eligibility.
Complete the taxpayer certification and attach a copy of Schedule VERB to the applicable tax return each year you claim the credit.
What you'll need
- Expenditure receipts: Submit these to the Kentucky Energy and Environment Cabinet for verification.
- Schedule VERB with Part I completed by the Department of Revenue: The department completes this part and mails it to you.
- Taxpayer certification: Complete Part II, including the signature, title, and date, certifying that the expenditures were not financed through a public grant program or the petroleum storage tank environmental assurance fund.
- Applicable tax return: Attach Schedule VERB to Form 720, 720U, PTE, 725, 740, 740-NP, or 741.
The schedule also asks for your name or entity name, federal identification number or SSN, entity type, Kentucky Corporation/LLET account number, and the remediation property's location and county.
How to file
Attach a completed copy of Schedule VERB to your applicable Form 720, 720U, PTE, 725, 740, 740-NP, or 741 each year you claim the credit.
- Leave Part I for the Department of Revenue to complete and mail to you.
- Complete and sign the certification in Part II.
- Enter the current-year credit in Part III. Transfer the LLET credit to Schedule TCS, Part II, Column E, and the corporation income tax credit to Schedule TCS, Part II, Column F. Enter the individual income tax credit on Form 740, 740-NP, or 741.
- Complete Part IV to track the credit used and remaining balances separately for LLET and income tax.
A pass-through entity must include each partner's, member's, shareholder's, or beneficiary's pro rata share of the approved credit on Schedule K-1.
The provided text does not give a mailing address or e-filing instructions.
Common mistakes
- Using one tax's credit balance against another tax: Track income tax and LLET balances separately. A remaining income tax balance cannot offset LLET, and a remaining LLET balance cannot offset income tax. Once a balance reaches zero, no further credit is allowed against that tax.
- Reducing LLET below its minimum: This credit cannot reduce LLET below $175.
- Skipping the annual certification or attachment: Complete the certification and attach a copy of Schedule VERB each year you claim the credit.
- Certifying publicly financed expenditures: The certification states that the expenditures were not financed through a public grant program or the petroleum storage tank environmental assurance fund.
- Leaving a zero credit amount blank in Part IV: If no credit was used for a year, enter zero (-0-) in Column C.
Questions people ask
Is the credit refundable?
No. The form describes it as a nonrefundable credit.
How much credit is available?
The credit is dollar-for-dollar for approved expenditures, up to $150,000. The allowable credit for any one taxable year is limited to 25% of the approved amount shown in Part I, Line 2.
When can I first claim the credit, and can it carry forward?
You may claim the credit on the tax return for the taxable year in which it was certified. The credit may be carried forward ten years.
Who completes Part I?
The Department of Revenue completes Part I and mails it to the taxpayer.
What if my entity type is not listed?
Check the “Other” box and list the entity type.