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ETHANOL TAX CREDIT- KRS 141.422, 141.4242, 141.4246, 141.4248 & 141.425 – 103 KAR 15:110

 

  • The tax credit is one dollar ($1) per ethanol gallon produced.

 

  • Tax credit cap:
    • Calendar years beginning after December 31, 2007: $5,000,000

 

  • If the total approved credits exceed the tax credit cap, the credit must be prorated amongst the approved taxpayers. Proration is calculated as follows:

 

Tax Credit CapXT/P's Approved Credit
All T/Ps' Approved Credits

 

  • There is no carry forward provision.

 

  • The ethanol must be manufactured in Kentucky.

 

  • Standards:
    • Must meet the current American Society for Testing and Materials specification D4806

 

  • The credit is a nonrefundable credit against taxes imposed by KRS 141.020, KRS 141.040, and/or KRS 141.0401.

 

  • Must file the application by January 15 following the close of the preceding tax year. 
    • The DOR must notify taxpayers of the amount of their approved credit by April 15th following the close of the preceding calendar year.

 

Unused Ethanol and/or Cellulosic Ethanol Credit

 

  • Any unused tax credit cap balance may be transferred to the other credit to be used for that year.  For example, if only $3,000,000 of the $5,000,000 Ethanol Credit cap is approved, the remaining $2,000,000 balance can be transferred to the Cellulosic Ethanol tax credit cap.

 

 

Use form: Schedule ETH

The Kentucky Department of Revenue conducts work
under the authority of the Finance and Administration Cabinet.