The Renewable chemical production tax credit is
a nonrefundable and nontransferable credit available for tax years 2021 through 2024 that may be applied against income taxes imposed by KRS 141.020 (individual income tax) or KRS 141.040 (corporation income tax) and the limited liability entity tax (LLET) imposed by KRS 141.0401 in an amount certified by the Department of Revenue. This credit is for any taxpayer that has met the requirements outlined in KRS 246.700 and received a preliminary certification of the tax credit by the Department of Agriculture and final certification under KRS 141.423 by the Department of Revenue. This credit is for a qualified taxpayer that produces renewable chemicals pursuant to KRS 141.422 to 141.4231, 246.700 and 302 KAR 4:010. The total amount of tax credit shall be an amount equal to five cents ($0.05) per molecular pound of weight of renewable chemicals produced in Kentucky by an eligible business, unless the total amount of approved credit for all taxpayers exceeds the annual cap of $10,000,000. The renewable chemical production tax credit shares the annual $10,000,000 cap with the biodiesel and renewable diesel production tax credits per KRS 141.422. The renewable chemical production tax credit may be carried forward three years for use in succeeding years, but ca nnot be carried back to be used in prior tax years. The renewable chemical production tax credit will expire on December 31, 2024.
Agreement and Application Process
Any taxpayer interested in claiming the Renewable Chemical Production tax credit, must enter into an agreement with the Department of Agriculture and then submit their application to the Department of Agriculture.