Kentucky Schedule BIO is an application and credit certificate used by eligible taxpayers who produce biodiesel, blend B100 biodiesel, or produce renewable diesel in Kentucky and want to claim the Kentucky Biodiesel Income Tax or LLET Credit. The schedule reports the number of qualifying gallons produced or blended in Kentucky during the calendar year that meet the current ASTM standards. It applies to B100 biodiesel produced in Kentucky, B100 biodiesel used in blended biodiesel produced in Kentucky, and renewable diesel produced in Kentucky. Re-blending already blended biodiesel does not qualify. The credit is not available for biodiesel or renewable diesel produced or blended outside Kentucky. The credit is generally $1 per approved gallon, but the total annual credit for all taxpayers is capped at $10,000,000 under the shared cap for renewable chemical production, biodiesel, and renewable diesel credits. The Department of Revenue reviews the submitted schedule, approves qualifying gallons, and issues a credit certificate showing the amount of credit available. The credit is nonrefundable, so it can reduce Kentucky income tax or limited liability entity tax, but it cannot create a refund. There is no carryforward for unused credit, which means any unused amount cannot be saved for a later tax year.
How To File Kentucky Schedule BIO
Send Schedule BIO to the Department of Revenue by fax or email no later than January 15 after the close of the preceding calendar year. The schedule should be sent by fax to 502-564-0058 or by email to DORTaxCredits@ky.gov. Filing by regular mail is not recommended because credit certification is not guaranteed for schedules sent that way. A schedule sent or postmarked after January 15 is void. The Department of Revenue should confirm receipt of the application. If you do not receive confirmation within two weeks after submission, contact the Division of Corporation Tax at 502-564-8139 or by email at DORTaxCredits@ky.gov. The credit certificate showing the approved credit amount is issued by April 15 after the close of the preceding calendar year. Attach the credit certificate to the Kentucky tax return on which the credit is claimed, such as Form 720, Form 720U, Form PTE, Form 725, Form 740, Form 740-NP, or Form 741.
How To Complete Kentucky Schedule BIO
Line 1: Schedule BIO
Use this schedule to apply for and claim the Kentucky biodiesel and renewable diesel income tax or LLET credit.
Line 2: Tax Year 2025
Use this version for the 2025 tax year.
Line 3: Commonwealth Of Kentucky Department Of Revenue
This identifies the Kentucky agency that processes the application and issues the credit certificate.
Line 4: Application And Credit Certificate Of Income Tax/LLET Credit, Biodiesel
This title shows that the schedule works as both the application and the credit certificate for the biodiesel credit.
Line 5: KRS 141.422 To 141.425
This line identifies the Kentucky statutes connected with the biodiesel credit.
Line 6: 103 KAR 15:140
This line identifies the Kentucky administrative regulation related to biodiesel credit testing and certification.
Line 7: See Instructions
Review the instructions before completing the schedule because some parts are for Department of Revenue use only.
Line 8: Attach To Form 720, 720U, PTE, 725, 740, 740-NP, Or 741
Attach the issued credit certificate to the Kentucky tax return that applies to your filing type.
Line 9: Name Of Entity
Enter the legal name of the taxpayer, business, or organization applying for the credit.
Line 10: Mailing Address
Enter the mailing address where the taxpayer can receive correspondence.
Line 11: Location Address
Enter the physical location where the biodiesel or renewable diesel production or blending activity takes place.
Line 12: Federal Identification Number
Enter the taxpayer identification number. An individual should enter a Social Security number, and all other entities should enter the federal employer identification number.
Line 13: Kentucky Corporation/LLET Account Number, If Applicable
Enter the Kentucky Corporation/LLET account number if the taxpayer has one.
Line 14: Account Number Formatting Rule
The Kentucky Corporation/LLET account number must contain 9 digits. If the number has only 6 digits, add leading zeros at the beginning.
Line 15: Kentucky Special Fuels Dealer’s License Account Number
Enter the Kentucky Special Fuels Dealer’s License account number connected with the biodiesel or renewable diesel activity.
Line 16: Taxed As Corporation
Check this box if the taxpayer is taxed as a corporation.
Line 17: Taxed As Limited Liability Pass-Through Entity
Check this box if the taxpayer is taxed as a limited liability pass-through entity.
Line 18: Taxed As General Partnership
Check this box if the taxpayer is taxed as a general partnership.
Line 19: Taxed As Individual
Check this box if the taxpayer is an individual.
Line 20: Taxed As Other
Check this box if none of the listed entity types apply, then write the correct entity type.
Line 21: ASTM Standard Question
Answer whether your biodiesel or renewable diesel failed to meet the ASTM standard at any time during the calendar year.
Line 22: Yes Box
Check “Yes” if your biodiesel or renewable diesel failed to meet the ASTM standard at any point during the calendar year.
Line 23: No Box
Check “No” if your biodiesel or renewable diesel met the ASTM standard throughout the calendar year.
Line 24: If Yes, List Dates
If you checked “Yes,” enter the dates when the biodiesel or renewable diesel failed to meet the ASTM standard.
Part I, Gallons Produced And/Or Blended In Kentucky During The Calendar Year
Line 1: Number Of Gallons Of B100 Biodiesel Produced Meeting ASTM Standard
Enter the number of gallons of B100 biodiesel produced in Kentucky during the calendar year that met the ASTM standard.
Line 2: Number Of Gallons Of B100 Biodiesel Blended With Diesel
Enter the number of gallons of B100 biodiesel used in blended biodiesel produced in Kentucky during the calendar year.
Line 2 Note: Blender Proof Requirement
A blender must provide proof that the B100 included in the blended biodiesel met the ASTM standard.
Line 2 Note: Re-Blending Rule
Do not include gallons from re-blending already blended biodiesel because re-blending does not qualify for this credit.
Line 3: Number Of Gallons Of Renewable Diesel Produced Meeting ASTM Standard
Enter the number of gallons of renewable diesel produced in Kentucky during the calendar year that met the ASTM standard.
Line 4: Total Biodiesel Produced And/Or Blended And Renewable Diesel Produced
Add Lines 1, 2, and 3, then enter the total qualifying gallons.
Part II, Biodiesel Gallons Approved
Line 1: Biodiesel Gallons Approved By Department Of Revenue
Leave this line for the Department of Revenue. It shows the approved number of biodiesel and renewable diesel gallons allowed for credit.
Part III, Biodiesel Approved Credit Certificate
Line 1(a): Requested Credit For Biodiesel Producer And/Or Blender, Numerator
Leave this line for the Department of Revenue. It shows the credit requested by the taxpayer when the cap calculation applies.
Line 1(b): Total Requested Credit For All Producers And/Or Blenders, Denominator
Leave this line for the Department of Revenue. It shows the total credit requested by all taxpayers when the annual cap calculation applies.
Line 1 Calculation:
The Department of Revenue divides the taxpayer’s requested credit by the total requested credit from all taxpayers, then multiplies that fraction by $10,000,000 to determine the approved credit when the cap is exceeded.
Approved Credit:
This line shows the approved credit amount determined by the Department of Revenue.
Department Of Revenue Use Only:
Leave this section blank because it is completed by the Department of Revenue.
By:
This line is for the Department of Revenue representative who completes or approves the credit certificate.
Date:
This line shows the date the Department of Revenue completes or approves the credit certificate.
Taxpayer Use Only
Line 1: Taxpayer Use Only
Complete only the taxpayer sections that apply to your application and credit claim.
Line 2: No Carryforward Allowed
Any biodiesel credit not used for the taxable year cannot be carried forward to a later year.
Line 3: Declaration Statement
By signing, you declare under penalties of perjury that you have reviewed the application, including all schedules and statements, and that the information is true, correct, and complete to the best of your knowledge.
Line 4: Signature
The authorized taxpayer or representative must sign the schedule.
Line 5: Title
Enter the signer’s title, such as owner, officer, partner, member, manager, or authorized representative.
Line 6: Date
Enter the date the schedule is signed.
Line 7: Contact Name, If Different From Signer
Enter the contact person’s name if someone other than the signer should receive questions about the application.
Line 8: Email Address
Enter the contact email address for application or credit certificate communication.
Line 9: Telephone Number
Enter the contact telephone number.
Line 10: Fax Number
Enter the contact fax number, if available.
Part IV, Biodiesel Credit Used By Taxpayer
Line 1: LLET Credit
Enter the amount of credit claimed for the taxable year against the limited liability entity tax. Also report this amount on Schedule TCS, Part II, Column E. The credit cannot reduce the LLET below the $175 minimum.
Line 2: Corporation Income Tax Credit
Enter the amount of credit claimed for the taxable year against Kentucky corporation income tax. Also report this amount on Schedule TCS, Part II, Column F.
Line 3: Individual Income Tax Credit
Enter the amount of credit claimed for the taxable year against Kentucky individual income tax. Report this amount on Form 740, Form 740-NP, or Form 741, whichever applies.
Testing And Attachment Requirements
Line 1: Laboratory Results Requirement
Attach laboratory results for July 1 and December 31 of the calendar year with Schedule BIO.
Line 2: ASTM Standard Proof Requirement
The attached laboratory results must prove that the biodiesel or renewable diesel met the ASTM standard on the required testing dates.
Line 3: Missing Proof Rule
If the required proof is not attached, the credit may be denied for gallons of biodiesel or renewable diesel back to the previous required testing date of July 1 or December 31.
Pass-Through Entity Instructions
Line 1: Schedule K-1 Reporting
A pass-through entity must report each partner’s, member’s, shareholder’s, or beneficiary’s pro rata share of the approved credit on Schedule K-1.
Line 2: Department Notification Requirement
A pass-through entity must electronically notify the Department of Revenue of all partners, members, shareholders, or beneficiaries who may claim any part of the approved credit.
Line 3: Forfeiture Warning
If the required owner information is not provided to the Department of Revenue, the available credits may be forfeited for all partners, members, shareholders, or beneficiaries in the pass-through entity.
Line 4: Email Address For Owner Information
Send the required pass-through owner information to DORTaxCredits@ky.gov.
Line 5: Required File Format
The email must include a separate attachment in plain text or plain ASCII format.
Line 6: Owner Name
Include each partner’s, member’s, shareholder’s, or beneficiary’s name.
Line 7: Owner Address
Include each owner’s address.
Line 8: Owner Telephone Number
Include each owner’s telephone number.
Line 9: Owner Identification Number
Include each owner’s identification number.
Line 10: Owner Distributive Share Of Tax Credit
Include each owner’s distributive share of the approved tax credit.
Important Credit Rules
Line 1: Kentucky Activity Rule
Only qualifying biodiesel produced in Kentucky, B100 biodiesel blended in Kentucky, or renewable diesel produced in Kentucky can qualify for the credit.
Line 2: Out-Of-State Activity Rule
Biodiesel or renewable diesel produced or blended outside Kentucky does not qualify.
Line 3: Re-Blending Rule
Re-blending already blended biodiesel is not eligible for the credit.
Line 4: Credit Rate Rule
The credit rate is $1 per approved qualifying gallon.
Line 5: Annual Cap Rule
The total annual credit for all taxpayers cannot exceed $10,000,000.
Line 6: Shared Cap Rule
The $10,000,000 cap is shared with renewable chemical production, biodiesel, and renewable diesel production credits.
Line 7: Cap Allocation Rule
If total approved credits exceed the cap, the Department of Revenue calculates each taxpayer’s approved credit using the fraction in Part III.
Line 8: Nonrefundable Credit Rule
The biodiesel credit can reduce eligible Kentucky tax liability, but it cannot create a refund.
Line 9: No Carryforward Rule
Unused biodiesel credit cannot be carried forward to another tax year.
Line 10: Different Tax Type Amounts Rule
The amount of credit claimed against corporation income tax and LLET may be different.
Line 11: LLET Minimum Tax Rule
The credit cannot reduce the limited liability entity tax below the $175 minimum.
Line 12: Filing Deadline Rule
Schedule BIO must be faxed or emailed no later than January 15 after the close of the calendar year.
Line 13: Late Filing Rule
A schedule sent or postmarked after January 15 is void.
Line 14: Confirmation Rule
If you do not receive confirmation within two weeks after submitting the application, contact the Department of Revenue.
Line 15: Credit Certificate Rule
The Department of Revenue issues the credit certificate by April 15 after the close of the preceding calendar year.
Line 16: Return Attachment Rule
Attach the issued credit certificate to the Kentucky tax return on which the biodiesel credit is claimed.