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While Kentucky doesn't have a specific statute that mirrors IRC Section 41, the Qualified Research Facility Tax Credit is a nonrefundable credit equal to 5% of the qualified costs of construction of research facilities that may be applied against income taxes imposed by KRS 141.020 (individual income tax), KRS 141.040 (corporation income tax), or KRS 141.0401 (limited liability entity tax, or LLET). Kentucky statute KRS 141.0205 provides an ordering provision when utilizing credits. Any unused credit may be carried forward 10 years.
Construction of research facilities means expenses associated with the construction, remodeling, and equipping of facilities in Kentucky, or expanding existing facilities to conduct qualified research.
Qualified research is defined in a manner consistent with Section 41 of the Internal Revenue Code. Expenses must be attributed to tangible, depreciable property and cannot include any amounts paid or incurred for replacement property (e.g. raw materials or supplies).
Learn more about Kentucky's R&D Tax Credit here.
R&D Tax Credit Available:
Yes - Qualified Research Facility Tax Credit
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Schedule QR is due with Kentucky Form 720 filing
Data Required to Compute Credit:
Claim Period Kentucky Qualified R&D Construction Expenses