For taxable years beginning after December 31, 2004, a taxpayer that has a major recycling project containing recycling or composting equipment to be used exclusively within this state for recycling or composting postconsumer waste material shall be entitled to a credit 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 with the ordering of the credits provided under KRS 141.0205.
Information
on the application process, application due dates, and how to claim the
tax credit can be found on the main Recycling
or Composting Equipment Tax Credit webpage.
| Limitations (Tax Years 2005 - 2019)
- The total amount of tax credit shall be an amount equal to fifty percent (50%) of the installed cost of the recycling or composting equipment.
- Must invest more than $10,000,000 in recycling or composting equipment to be used exclusively within the state.
- Must have more than seven hundred and fifty (750) full-time employees with an average hourly wage of more than three hundred percent (300%) of the federal minimum wage.
- Must have plant and equipment with a total cost of more than $500,000,000.
- Credit claimed is limited each tax year to fifty percent (50%) of the excess of the total tax liability over the baseline year tax liability of the taxpayer, not to exceed $2,500,000. Baseline year tax liability means the tax lability of the taxpayer for the most recent tax year ending prior to January 1, 2005.
- The credit is limited to a period of ten (10) years commencing with the approval of the recycling credit application.
Current Limitations (Tax Years Beginning After December 31, 2019)
- The total amount of tax credit shall be an amount equal to twenty-five percent (25%) of the installed cost of the recycling or composting equipment.
- Must invest more than $10,000,000 in recycling or composting equipment to be used exclusively within the state.
- Must have at least four hundred (400) full-time employees with an average hourly wage of more than three hundred percent (300%) of the federal minimum wage.
- Must have plant and equipment with a total cost of more than $500,000,000.
- The amount of credit claimed in the taxable year during which the recycling equipment is purchased shall not exceed seventy-five percent (75%) of the total of each tax liability, which would otherwise be due for that taxable year.
- In subsequent years, the amount of credit claimed shall not exceed seventy-five percent (75%) of the total of each tax liability, which would be otherwise due for that taxable year.
- The credit is limited to a period of thirty (30) years commencing with the approval of the recycling credit application.
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