Schedule VERB: Voluntary Environmental Remediation Tax Credit (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
Kentucky Schedule VERB is used to claim the nonrefundable Voluntary Environmental Remediation Tax Credit for expenditures at qualifying property. It records certified expenditures, the allowable credit, current-year credit claims, and remaining balances for income tax and limited
Who files this form
Use Schedule VERB to claim the Voluntary Environmental Remediation Tax Credit against Kentucky individual income tax, corporation income tax, or limited liability entity tax (LLET) for expenditures at a qualifying remediation property.
The Kentucky Energy and Environment Cabinet must determine that the property qualifies and verify receipts for the claimed 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 as proof of the expenditures claimed.
- Schedule VERB with Part I completed by the Department of Revenue: The department completes this part and mails it to you.
- Taxpayer and property information: Provide your name, federal identification number or SSN, entity type, applicable Kentucky Corporation/LLET account number, and the property's location and county.
- Signed certification: Complete Part II, including the signature, title, and date, to certify that the expenditures were not financed through a public grant program or the petroleum storage tank environmental assurance fund.
- Credit tracking information: Part IV requires the taxable year, separate LLET and income tax credit balances, and amounts used.
How to file
Attach Schedule VERB to the applicable Form 720, 720U, PTE, 725, 740, 740-NP, or 741 each year you claim the credit. The text does not provide a return mailing address or e-filing directions.
- Leave Part I to the Department of Revenue, which completes it and mails it 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.
- If you are a pass-through entity, include each partner's, member's, shareholder's, or beneficiary's pro rata share of the approved credit on their Schedule K-1.
- Complete Part IV to track the credit. In Column A, enter the month and year the credit is taken. For year 1, enter the allowable credit from Part I, line 2 in Column B. For later years, enter the difference between Columns B and C separately for LLET and income tax. Enter the credit used for the year in Column C, including zero (-0-) if none was used.
Common mistakes
- Using the wrong account-number length: The Kentucky Corporation/LLET account number must be nine digits. Add leading zeros if it has six digits.
- Skipping the annual certification or attachment: Complete the certification and attach a copy of Schedule VERB each year you claim the credit.
- Mixing income tax and LLET balances: Calculate and track them separately. A balance for one tax cannot be used against the other. Once a balance reaches zero, no further credit is allowed against that tax.
- Reducing LLET too far: The credit cannot reduce LLET below the $175 minimum.
- Leaving a zero-use entry blank: Enter zero (-0-) in Part IV, Column C if no credit was used for that year.
- Omitting an unlisted entity type: Check “Other” and list your entity type if it is not shown.
Questions people ask
Is this credit refundable?
No. Schedule VERB 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 taxable year is limited to 25% of the maximum credit approved in Part I, line 2.
When can I start claiming the credit, and can I carry it 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.
Can the amounts claimed against corporation income tax and LLET differ?
Yes. The amounts can differ, but the credit claimed and remaining balance must be calculated separately for each tax.
Can I claim expenditures financed through a public grant program?
The required certification states that the expenditures were not financed through a public grant program or the petroleum storage tank environmental assurance fund.