KBI
KENTUCKY BUSINESS INVESTMENT PROGRAM
41A720-S53 KBI (PKG) (10-23)
COMMONWEALTH OF KENTUCKY
DEPARTMENT OF REVENUE
FRANKFORT
2023
tOnly use this package if you have received approval for the KBI credit
per KRS 154.32-010 to 100 by the Cabinet for Economic Development.
tSee instructions.
tAttach to form 720, 720U, PTE, or 725.
41A720-S53 KBI (PKG) (10-23) Page 2 of 8
Purpose of Package – Use this package to report KBI tax incentives for which your business entity has been approved per
KRS 154.32–010 to 100. You must have received preliminary or nal approval in accordance with KRS 154.32 to determine
the credit allowed. Schedule KBI-T is used by the company which has entered into an agreement for a Kentucky Business
Investment Program (KBI) project to maintain a record of approved costs, wage assessments, and tax credits, including local
wage assessment credit claimed.
General Instructions – Only include one incentive project per Package KBI. If your business entity les a form 720 or 720U
with the state of Kentucky, you must complete Schedule KBI (Page 3) and Schedule KBI-T (Page 7). If your business entity
les form PTE or 725, you must complete Schedule KBI-SP (Page 5) and Schedule KBI-T (Page 7).
First and Last Year Prorations—Tax incentives are only available to be claimed during the term of the incentive agreement.
Tax incentives claimed during the rst and last years of an incentive agreement must be prorated accordingly. Separate period
accounting is recommended, but a proration factor may be used if separate period accounting is not available.
To determine the proration factor in the rst year of the incentive agreement, divide the number of days from the activation date
until the end of your taxable year by the total number of days in your taxable year. Multiply the total income by the proration
factor to determine the project income when separate period accounting is not available.
To determine the proration factor in the last year of the incentive agreement, divide the number of days from the rst day of your
taxable year through the end of the incentive agreement term by the total number of days in your taxable year. Multiply the total
income by the proration factor to determine the project income when separate period accounting is not available.
2023
INSTRUCTIONS—PACKAGE KBI
PART II—Computation of Taxable Net Income Excluding Net Income from KBI Project and KBI Tax Credit
Section A–Computation of Corporation Tax
1 Enter income tax from Form 720, Part III, line 1 or Form 720U, Schedule U5, Section D, line 8............ 1 00
2 LLET of corporation (Part I, line 1) .......................................................................................................... 2 00
3 Nonrefundable LLET credit allowed per KRS 141.0401(3) (line 2 less $175, but not more than line 1) . 3 00
4 Total corporation tax (lines 1 and 2 less line 3) ....................................................................................... 4 00
Section B–Computation of Tax Excluding KBI Project
1 Enter taxable net income from Form 720, Part I, line 43 or Form 720U, Schedule U5,
Section D, line 7 ...................................................................................................................................... 1 00
2 Enter net income from KBI project; if loss, enter -0-................................................................................ 2 00
3 Taxable net income excluding net income from KBI project (line 1 less line 2). If line 2
is greater than line 1, enter -0- ................................................................................................................ 3 00
4 Income tax liability excluding KBI project (line 3 multiplied by the tax rate of 5%) ................................. 4 00
5 LLET excluding LLET on KBI project (Part I, line 3) ................................................................................ 5 00
6 Enter LLET from line 5 less $175, but not more than line 4 .................................................................... 6 00
7 Total tax excluding KBI project (lines 4 and 5 less line 6) ....................................................................... 7 00
8 Total tax attributable to KBI project (Section A, line 4 less Section B, line 7)
Continue to Part III and enter this amount on Part III, line 1 ................................................................... 8 00
Name of Corporation Federal Identication Number Kentucky Corporation/LLET
Account Number
Location of Project Activation Date of KBI Economic Development
Incentive Agreement Project Number
City County
PART I—Computation of LLET Excluding KBI Project
TAX CREDIT COMPUTATION SCHEDULE
(FOR A KBI PROJECT OF A CORPORATION)
1 LLET from Form 720, Part II, line 1 or Form 720U, Schedule U8, Section E, line 1 ............................... 1 00
2 LLET on KBI project from Schedule L–ECON (see instructions) ............................................................ 2 00
3 LLET excluding LLET on KBI project (line 1 less line 2) ......................................................................... 3 00
/ /
Mo. Day Yr.
__ __ __ __ __ __ __ __ __
__ __ __ __ __ __
PART III—Limitation
1 Enter tax liability attributable to KBI project from Part II, Section B, line 8 .............................................. 1 00
2 Enter credit limitation from Schedule KBI-T, Column F .......................................................................... 2 00
3 Allowable KBI tax credit (lesser of line 1 or line 2) .................................................................................. 3 00
Enter allowable credit on Schedule TCS, Part I, Column E and Column F
Economic development project means a project authorized under the Kentucky Rural Economic Development Act (KREDA), Metropolitan
College Consortium Tax Credit (MCC), Kentucky Small Business Tax Credit Program (KSBTC), Kentucky Selling Farmer Tax Credit
(KSFTC), 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), Skills Training Investment Credit Act (STICA), Incentives for Energy Independence Act (IEIA), and Incentives for Energy-related
Business Act (IEBA).
Taxable Year Ending
__ __ / __ __
Mo. Yr.
2023
KBI
Commonwealth of Kentucky
Department of Revenue
SCHEDULE
230313 41A720-S53 KBI (10-23) Page 3 of 8
41A720-S53 KBI (10-23) Page 4 of 8
INSTRUCTIONS—SCHEDULE KBI
The KBI tax credit is applied against the corporation income tax imposed by KRS 141.040 and/or the limited liability entity tax (LLET)
imposed by KRS 141.0401. The amount of tax credit against each tax can be dierent; however, for tracking purposes, the maximum
amount of credit used against either tax is the amount that is used for the tax year.
PURPOSE OF SCHEDULE—This schedule is used by a
corporation to determine the credit allowed against the Kentucky
corporation income tax liability and/or LLET attributable to the
project per KRS 141.415.
GENERAL INSTRUCTIONS
Part I—Computation of LLET Excluding KBI Project
Line 2— Use Schedule L–ECON to compute a separate LLET
of the KBI project using only the Kentucky gross receipts and
Kentucky gross prots of the project and attach it to the return
when led. If approved for multiple projects, attach a separate
Schedule L–ECON for each project’s LLET computation. In
the rst and last years of each project, only calculate Kentucky
gross receipts and gross prots received during the term of the
incentive agreement.
If the corporation has operations other than the KBI project, it
must attach schedules reecting the computation of Kentucky
gross prots and Kentucky gross receipts from the KBI project
per KRS 141.415(6)(b)** or KRS 141.415(7)(b).****
Part II—Computation of Taxable Net Income Excluding Net
Income from KBI Project and KBI Tax Credit
Section B
Line 2—Enter net income from the KBI project. If the corporation’s
only operation in Kentucky is the KBI project, the amount entered
on Line 1 must also be entered on Line 2. If the corporation has
operations other than the KBI project, it must attach schedules
reecting the computation of the net income from the KBI project
per KRS 141.415(6)(a)* or KRS 141.415(7)(a).*** In the rst and
last years of each project, only calculate Kentucky net income
received during the term of the incentive agreement.
See form for computation.
Part III—Limitation
Calculate KBI tax credit based on the corporation’s tax liability,
tax liability attributable to KBI project, and balance of approved
costs from Schedule KBI-T. Enter credit on Schedule TCS, Part
I, Column E and Column F.
A corporation with more than one economic development
project must separately compute the tax credit derived from
each project. Complete the applicable tax computation
schedules (KREDA, KIDA, KJRA, KIRA, KJDA, KBI, KRA,
IEIA, or IEBA) for each project. A corporation approved for the
Skills Training Investment Credit Act (STICA) or Metropolitan
College Consortium Tax Credit (MCC) must attach a copy of
the certication(s) from the Bluegrass State Skills Corporation.
A corporation approved for the Kentucky Small Business Tax
Credit Program (KSBTC) or the Kentucky Selling Farmer Tax
Credit (KSFTC) must attach a copy of the certication from the
Kentucky Economic Development Finance Authority.
Alternative Methods — Per KRS 141.415(8), if the approved
company can show that the nature of the operations and activities
of the approved company are such that it is not practical to use
separate accounting to determine net income, Kentucky gross
receipts, or Kentucky gross prots from the facility where the
project is located, the approved company must determine net
income, Kentucky gross receipts, or Kentucky gross prots
attributable to the project using an alternative method approved
by the Department of Revenue. Thus, if any method other than
separate accounting is used, a copy of the letter from the
Department of Revenue approving the alternative method
must be attached to this schedule.
Separate Facility
* Per KRS 141.415(6)(a), if the project is a totally separate
facility, net income attributable to the project shall be
determined by the separate accounting method.
** Per KRS 141.415(6)(b), if the project is a totally separate
facility, Kentucky gross receipts or Kentucky gross prots
attributable to the project shall be determined under the
separate accounting method reecting only the Kentucky
gross receipts or Kentucky gross prots directly attributable
to the facility.
Expansion of Existing Facility
*** Per KRS 141.415(7)(a), if the KBI project is an expansion
to a previously existing facility, net income attributable to
the entire facility shall be determined under the separate
accounting method and the net income attributable to
the KBI project shall be determined by apportioning the
separate accounting net income of the entire facility to
the KBI project income using a formula approved by the
Department of Revenue. A copy of the letter from the
Department of Revenue approving the formula must
be attached to this schedule.
**** Per KRS 141.415(7)(b), if the KBI project is an expansion
to a previously existing facility, Kentucky gross receipts
or Kentucky gross prots attributable to the entire facility
shall be determined under the separate accounting method
and the Kentucky gross receipts or Kentucky gross prots
attributable to the KBI project shall be determined by
apportioning the separate accounting Kentucky gross
receipts or Kentucky gross prots of the entire facility to
the KBI project Kentucky gross receipts or Kentucky gross
prots using a formula approved by the Department of
Revenue. A copy of the letter from the Department of
Revenue approving the formula must be attached to
this schedule.
2023
Name of Pass-through Entity Federal Identication Number Kentucky Corporation/LLET
Account Number
Location of Project Activation Date of KBI Economic Development
Incentive Agreement Project Number
City County
PART I—Computation of KBI Tax Credit and Tax Due
1 Kentucky taxable income on KBI project (see instructions) .................................................................. 1 00
2 Net operating loss deduction on KBI project ......................................................................................... 2 ( ) 00
3 Kentucky taxable income on KBI project after net operating loss deduction
(line 1 less line 2) .................................................................................................................................. 3 00
4 Income tax liability of KBI project (line 3 multiplied by the tax rate of 5%) ............................................ 4 00
5 LLET on KBI project from Schedule L-ECON (see instructions). Not applicable for
general partnerships ........................................................................................................................... 5 00
6 Nonrefundable LLET credit allowed per KRS 141.0401(3) (line 5 less $175, but not more than line 4).
Not applicable for general partnerships ........................................................................................... 6 00
7 Total tax on KBI project (lines 4 and 5 less line 6)................................................................................. 7 00
8 Limitation (Column F from Schedule KBI-T).......................................................................................... 8 00
9 Enter the lesser of line 7 or line 8 as either:
(a) KBI tax credit .................................................................................................................................. 9(a) 00
or
(b) Estimated tax payment and complete election in Part II ................................................................ 9(b) 00
10 Tax Due on the Project—If line 7 is larger than line 9(a) or 9(b), enter the dierence
here as a liability of the pass–through entity and add to the tax due on Form PTE,
Part II, line 16 or Form 725, Part II, line 15 .............................................................................................. 10 00
__ __ __ __ __ __
TAX COMPUTATION SCHEDULE
(FOR A KBI PROJECT OF A
PASS–THROUGH ENTITY)
/ /
Mo. Day Yr.
__ __ __ __ __ __ __ __ __
PART II—Estimated Tax Election
In accordance with KRS 141.415(4)(b),
elects for the taxable year ended , in lieu of the KBI tax credit, to have an amount equal
to the lesser of line 7 or line 8 above applied as an estimated tax payment.
Signature of Shareholder, Partner, or Member Print Name Date
Name of Pass–through Entity
Taxable Year Ending
__ __ / __ __
Mo. Yr.
2023
KBI-SP
Commonwealth of Kentucky
Department of Revenue
SCHEDULE
230314 41A720-S54 KBI-SP (10-23) Page 5 of 8
41A720-S54 KBI-SP (10-23) Page 6 of 8
INSTRUCTIONS–SCHEDULE KBI–SP
PURPOSE OF SCHEDULE—This schedule is used by a
pass–through entity to determine the credit allowed against the
Kentucky income tax and/or LLET attributable to the project per
KRS 141.415.
NOTE: These credits do not pass through to members, partners,
or shareholders of pass-through entities.
Pass–through entities should first complete Form PTE to
determine net income (loss), deductions, etc., from the entire
operations of the pass–through entity. The pass–through entity
should then complete Schedule KBI–SP to determine the
KBI tax credit and the tax due, if any, from the KBI project. A
pass–through entity is subject to tax per KRS 141.020 and KRS
141.0401 on the net income and the Kentucky gross receipts or
Kentucky gross prots from the KBI project and the KBI credit
is applied against the tax of the KBI project. Consequently, the
pass–through entity must use Form PTE(K) to exclude the net
income from the KBI project from the partners’, members’, or
shareholders’ distributive share income.
Multiple Projects—A pass–through entity with multiple economic
development projects must complete the applicable schedules
(KREDA–SP, KIDA–SP, KJRA–SP, KIRA–SP, KJDA–SP, KBI–SP,
KRA–SP, IEIA–SP, or IEBA-SP) to determine the credit and net
tax liability, if any, for each project.
Line 1—If the pass–through entity’s only operation is the KBI
project, the amount entered on Line 1 is the net income (loss)
from Form PTE. If the pass–through entity has operations other
than the KBI project, a schedule must be attached reecting
the computation of the net income (loss) from the KBI project in
accordance with the following instructions and enter on Line 1.
In the rst and last years of each project, only calculate Kentucky
taxable income received during the term of the incentive
agreement.
Separate Facility—Per KRS 141.415(6), if the project is a
totally separate facility, net income, Kentucky gross receipts,
or Kentucky gross prots attributable to the project must be
determined by a separate accounting method.
Expansion of Existing Facility—Per KRS 141.415(7), if the KBI
project is an expansion to a previously existing facility, the net
income, Kentucky gross receipts, or Kentucky gross prots must
be determined under a separate accounting method reecting
the entire facility and the net income, Kentucky gross receipts,
or Kentucky gross prots must be determined by apportioning
the net income, Kentucky gross receipts, or Kentucky gross
prots of the entire facility to the economic development project
by a formula approved by the Department of Revenue. A copy
of the letter from the Department of Revenue approving the
percentage must be attached to the schedule.
Alternative Methods—Per KRS 141.415(8), if
the approved company can show that the nature of the
operations and activities of the approved company are
such that it is not practical to use a separate accounting method to
determine the net income, Kentucky gross receipts, or Kentucky
gross prots from the facility where the economic development
project is located, the approved company must use an alternative
method approved by the Department of Revenue. A copy of
the letter from the Department of Revenue approving the
alternative method must be attached to this schedule.
Separate Accounting—If the economic development project is
a totally separate facility, net income must reect only the gross
income, deductions, expenses, gains, and losses allowed under
this chapter directly attributable to the facility and overhead
expenses apportioned to the facility; and Kentucky gross
receipts or Kentucky gross prots must reect only Kentucky
gross receipts or Kentucky gross prots directly attributable to
the facility.
If the economic development project is an expansion to a
previously existing facility, net income of the entire facility must
reect only the gross income, deductions, expenses, gains, and
losses allowed under this chapter directly attributable to the
facility and overhead expenses apportioned to the facility; and
Kentucky gross receipts and Kentucky gross prots must reect
only Kentucky gross receipts and Kentucky gross prots directly
attributable to the facility. Net income, Kentucky gross receipts,
and Kentucky gross prots of the entire facility attributable
to the economic development project must be determined by
apportioning the net income, Kentucky gross receipts, and
Kentuck y gross prots by a formula approved by the Department
of Revenue.
Line 2—Enter the net operating loss from the KBI project, if any,
being carried forward from previous years.
Note: Just as the income from a KBI project does not ow
through to partners, members, or shareholders, neither do the
losses. The project’s net operating loss from prior years must
be subtracted from the project income before calculating the
KBI credit.
General Partnership—Lines 5 and 6 of this schedule should not
be completed by a general partnership as a general partnership
is not subject to LLET.
Line 5— Use Schedule L–ECON to compute a separate LLET
of the KBI project using only the Kentucky gross receipts and
Kentucky gross prots of the project and attach it to the return
when led. If approved for multiple projects, attach a separate
Schedule L–ECON for each project’s LLET computation. In the
rst and last years of each project, only calculate Kentucky LLET
received during the term of the incentive agreement.
Line 9—In lieu of the tax credit, the approved company may
elect, on an annual basis, to apply as an estimated tax payment
an amount equal to the allowable tax credit. Any estimated tax
payment must be in satisfaction of the tax liability of the partners,
members, or shareholders of the pass–through entity and must
be paid on behalf of the partners, members, or shareholders.
Enter an amount on either (a) or (b), but in no case should
there be an entry on both (a) and (b). Per KRS 141.415(5), this
estimated tax payment is excluded in determining each partner’s,
member’s, or shareholder’s distributive share income or credit
from a pass–through entity. Accordingly, the partners, members,
or shareholders are not entitled to claim any portion of this
estimated tax payment against their Kentucky income tax liability.
2023
) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
( + ) – ( + ) = –
Carry Forward
Balance
(Col. F – Col. G
from Prior Year)
TRACKING SCHEDULE
FOR A KBI PROJECT
Entity Type Corporation Federal Identication Number Kentucky Corporation/LLET
Limited Liability Pass-through Entity Account Number
General Partnership
Other ___________________ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
Location of Project Activation Date of KBI Economic Development
Incentive Agreement Project Number
A B C D E F G
_ _ / _ _ / _ _
Mo. Day Yr.
City County
Name of Entity
Taxable
Year
Ended
Annual
Approved Costs
State Wage
Assessment
Credit Claimed
KBI
Credit Limitation
Col. (B + C) – (D + E)
KBI
Credit Claimed
on Return
Local
Wage Assessment
Credit Claimed
2023
KBI-T
Commonwealth of Kentucky
Department of Revenue
SCHEDULE
230315 41A720-S55 KBI-T (10-23) Page 7 of 8
41A720-S55 KBI-T (10-23) Page 8 of 8
INSTRUCTIONS—SCHEDULE KBI-T
PURPOSE OF SCHEDULE—This schedule is used
to maintain a record of the approved costs, wage
assessments, and tax credits (income tax and LLET) for the
duration of the agreement. This information is necessary
for the company to determine the limitation of the tax credit
for each year of the agreement and to allow the Kentucky
Department of Revenue to verify that the credit has been
properly computed.
GENERAL INSTRUCTIONS
A separate Schedule KBI-T, Tracking Schedule
for a KBI Project, must be maintained for the duration of
each KBI project. Beginning with the rst tax year of the KBI
tax incentive agreement, complete Columns A through G
using a separate line for each year of the agreement. The
company must attach a copy of this schedule updated with
current year information to the Schedule KBI or Schedule
KBI-SP which is led with the Kentucky tax return and
attach a copy to the Wage Assessment Report and Annual
Reconciliation.
All tax credits are entered on Schedule TCS, Tax Credit
Summary Schedule. The total tax credits calculated may
exceed the amount that can be used. Credits must be
claimed in the order prescribed by KRS 141.0205. Total
credits claimed cannot reduce the LLET below the $175
minimum nor the income tax liability below zero.
SPECIFIC INSTRUCTIONS
Column A—Enter on each line the ending date (month,
day, and year) of the tax year for which the information
requested in Columns B through G is entered.
Column B—This column will always be blank for the rst
taxable year of the agreement. For each year thereafter,
determine the carry forward balance. If the amount entered
in Column F for the prior year exceeds the amount entered
in Column G for the prior year, enter the dierence. If the
amount entered in Column G for the prior year equals the
amount entered in Column F for the prior year, enter zero
(-0-). If the amount entered in Column G for the prior year
is greater than the amount claimed in Column F, you have
exceeded the amount of credits eligible to claim.
Column C—Enter the total amount of annual approved
costs per the agreement for the taxable year.
Column D—Enter the total amount of state wage
assessment credit claimed during the taxable year.
Column E—Enter the total amount of local wage
assessment credit claimed during the taxable year, if
eligible.
Column F—Enter the result of adding the amounts entered
in Columns B and C and subtracting the amounts entered
in Columns D and E.
Then, if applicable, enter on Schedule KBI, Part III, Line
2, or Schedule KBI-SP, Part I, Line 8, to be led with the
income tax return.
Column G—The tax credit calculated for each tax can be
dierent; however, for tracking purposes, the greater of
the credit claimed against LLET or income tax is recorded
as the amount claimed. Enter the greater of Column E or
Column F from Schedule TCS for this project, if applicable.
Otherwise, enter zero (-0-).
2023
