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Railroad Expansion Tax Credit – KRS 141.386, 141.387


  • For taxable years beginning after December 31, 2009.

  • A nonrefundable credit against the taxes imposed by KRS 141.040 and 141.0401.

  • The credit shall be equal to twenty-five percent (25%) of the expenditures paid or incurred by the corporation or railway company to expand or upgrade railroad track, including roadbeds, bridges, and related track structures, to accommodate the transport of fossil energy resources or biomass resources.


  • The credit amount approved for a calendar year for all taxpayers under this section shall be limited to one million dollars ($1,000,000).

  • If the total amount of approved credit exceeds one million dollars ($1,000,000), the department shall determine the amount of credit each corporation and railway company receives by multiplying one million dollars ($1,000,000) by a fraction, the numerator of which is the amount of approved credit for a corporation or railway company and the denominator of which is the total approved credit for all corporations and railway companies.

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


  • The taxpayer must file a claim for the railroad expansion credit with the DOR by January 15th each year.


  • The DOR must issue a credit certification to the taxpayer by March 15th each year.


  • The credit cannot be carried forward.


  • If expenditure by a taxpayer qualifies for credits under more than one of the provisions of KRS 141.385 (Railroad Maintenance and Improvement Credit) and 141.386 (railroad expansion or upgrade to transport fossil energy or biomass resources), the taxpayer may claim credit only under one of the sections.


Use Form: Schedule RR-E

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

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