Kentucky Schedule CELL is the application and credit certificate used for the Kentucky income tax and limited liability entity tax credit for cellulosic ethanol. A taxpayer uses this schedule to report the number of gallons of cellulosic ethanol produced in Kentucky during the calendar year that met the required ASTM standard. The schedule is also used by the Kentucky Department of Revenue to review the reported production, approve the qualifying gallons, and certify the amount of credit available to the taxpayer. The credit generally equals $1 per approved gallon, but the total annual credit for all taxpayers is limited by a statewide cap. If total approved claims are higher than the available cap, the department may calculate each taxpayer’s approved credit using a proportional formula. Kentucky Schedule CELL is not only a production report. It also works as the taxpayer’s credit certificate once approved, and the certified credit must be attached to the tax return where the credit is claimed. The schedule applies only to qualifying cellulosic ethanol produced in Kentucky, not to cellulosic ethanol produced in another state. Any unused credit cannot be carried forward, so taxpayers should carefully complete the form, meet the filing deadline, include required testing records, and use the approved credit correctly on the proper tax return or schedule.
How To File Kentucky Schedule CELL
Fax or email Kentucky Schedule CELL to the Kentucky Department of Revenue no later than January 15 after the close of the preceding calendar year. Filing by regular mail is not recommended because credit certification cannot be guaranteed for schedules sent that way. Any schedule postmarked or sent after January 15 is void.
Fax the schedule to 502-564-0058 or email it to DORTaxCredits@ky.gov.
After submitting the schedule, wait for confirmation from the Kentucky Department of Revenue. If you do not receive confirmation within two weeks, contact the Division of Corporation Tax at 502-564-8139 or email DORTaxCredits@ky.gov.
The Department of Revenue will issue the credit certificate by April 15 after the close of the preceding calendar year. Attach the credit certificate to the tax return on which the cellulosic ethanol credit is claimed.
How To Complete Kentucky Schedule CELL
Line 1: Schedule CELL Identification: Use this schedule for the Kentucky cellulosic ethanol income tax and LLET credit application and certificate for tax year 2025.
Line 2: Application And Credit Certificate Title: Confirm that the schedule is being used to apply for and certify the cellulosic ethanol credit.
Line 3: Year 2025: Make sure the year on the schedule matches the year for which the cellulosic ethanol credit is being requested.
Line 4: See Instructions: Review the schedule instructions before completing the form so the application is submitted correctly and on time.
Line 5: Attach To Form 720, 720U, PTE, 725, 740, 740-NP, Or 741: Attach the approved credit certificate to the applicable Kentucky return when claiming the credit.
Line 6: Legal References: The schedule is connected to Kentucky law under KRS 141.422 to 141.4248 and regulation 103 KAR 15:120.
Line 7: Name Of Entity: Enter the legal name of the taxpayer or entity applying for the cellulosic ethanol credit.
Line 8: Federal Identification Number: Enter the correct identification number. Individuals should enter a Social Security number. All other taxpayers should enter the federal employer identification number.
Line 9: Kentucky Corporation/LLET Account Number, If Applicable: Enter the Kentucky Corporation or LLET account number if the taxpayer has one. The number must be 9 digits. If the account number has only 6 digits, add leading zeros.
Line 10: Mailing Address: Enter the taxpayer’s mailing address. Use the address where official correspondence should be sent.
Line 11: Taxed As Corporation: Check this box if the taxpayer is taxed as a corporation.
Line 12: Taxed As Limited Liability Pass-Through Entity: Check this box if the taxpayer is a limited liability pass-through entity.
Line 13: Taxed As General Partnership: Check this box if the taxpayer is taxed as a general partnership.
Line 14: Taxed As Individual: Check this box if the taxpayer is an individual.
Line 15: Taxed As Other: Check the Other box if the taxpayer’s entity type is not listed. Write the correct entity type in the space provided.
Line 16: Location Address: Enter the physical location address connected with the cellulosic ethanol production activity.
Line 17: Kentucky Special Fuels Dealer’s License Account Number: Enter the Kentucky Special Fuels Dealer’s License account number in the space provided.
Line 18: ASTM Standard Question: Answer whether the cellulosic ethanol failed to meet the ASTM standard at any time during the calendar year.
Line 19: Yes Box: Check Yes if the cellulosic ethanol failed to meet the ASTM standard during the calendar year.
Line 20: No Box: Check No if the cellulosic ethanol met the ASTM standard for the full calendar year.
Line 21: If Yes, List Dates: If Yes is checked, list the dates when the cellulosic ethanol failed to meet the ASTM standard.
Line 22: Part I, Gallons Produced In Kentucky During The Calendar Year: Use this part to report qualifying cellulosic ethanol gallons produced in Kentucky during the calendar year.
Line 23: Part I, Line 1, Number Of Gallons Produced Meeting ASTM Standard: Enter the number of gallons of cellulosic ethanol produced in Kentucky during the calendar year that met the ASTM standard.
Line 24: Testing Requirement: Attach laboratory results for July 1 and December 31 of the calendar year. These results help prove that the cellulosic ethanol met the ASTM standard.
Line 25: Missing Testing Proof: If proof of ASTM compliance for July 1 and December 31 is not provided, the credit may be denied for gallons produced back to the previous required testing date.
Line 26: Declaration Statement: By signing the schedule, the taxpayer declares under penalties of perjury that the application and any attached schedules or statements are true, correct, and complete.
Line 27: Signature: The authorized signer must sign the schedule.
Line 28: Title: Enter the signer’s official title or role.
Line 29: Date: Enter the date the schedule is signed.
Line 30: Contact Name, If Different From Signer: If the contact person is not the signer, enter the contact person’s name.
Line 31: Email Address: Enter the email address where the Department of Revenue can contact the taxpayer or representative.
Line 32: Telephone Number: Enter the contact telephone number.
Line 33: Fax Number: Enter the contact fax number if available.
Line 34: Department Of Revenue Use Only: Do not complete this section. It is reserved for the Kentucky Department of Revenue.
Line 35: Part II, Cellulosic Ethanol Gallons Approved: This part is completed by the Department of Revenue to show the approved number of cellulosic ethanol gallons.
Line 36: Part II, Line 1, Gallons Approved By Department Of Revenue: Leave this line blank. The Department of Revenue enters the number of gallons approved for credit.
Line 37: Part III, Cellulosic Ethanol Approved Credit Certificate: This part is completed by the Department of Revenue when calculating the approved credit amount.
Line 38: Part III, Line 1(a), Requested Credit For Cellulosic Ethanol Producer: This is the numerator used by the Department of Revenue when a proportional credit calculation is needed.
Line 39: Part III, Line 1(b), Total Requested Credit For Cellulosic Ethanol Producer: This is the denominator used by the Department of Revenue when total approved credit requests exceed the available annual cap.
Line 40: Part III Formula: If the total approved credit exceeds the annual cap, the Department of Revenue uses a fraction based on the taxpayer’s requested credit over total requested credits for all taxpayers.
Line 41: Approved Credit Box: Leave this box blank. The Department of Revenue enters the final approved credit amount.
Line 42: Department Approval By: Leave this line blank. It is completed by the Department of Revenue.
Line 43: Department Approval Date: Leave this line blank. It is completed by the Department of Revenue.
Line 44: Annual Cellulosic Ethanol Credit Cap: The annual statewide cap is $5,000,000. If approved applications exceed that cap, the cap may be increased by any unused ethanol tax credit cap.
Line 45: Cap Transfer Limit: Any transferred unused cap cannot exceed the amount needed for approved applicants to receive the $1 per gallon credit allowed under Kentucky law.
Line 46: Taxpayer Use Only: The taxpayer completes this section after the Department of Revenue certifies the credit.
Line 47: Part IV, Cellulosic Ethanol Credit Used By Taxpayer: Use this part to report how much approved credit is being used on the taxpayer’s Kentucky tax return.
Line 48: Part IV, Line 1, LLET Credit: Enter the amount of credit claimed against the limited liability entity tax on Schedule TCS, Part II, Column E. This credit cannot reduce the LLET below the $175 minimum.
Line 49: Part IV, Line 2, Corporation Income Tax Credit: Enter the amount of credit claimed against corporation income tax on Schedule TCS, Part II, Column F.
Line 50: Part IV, Line 3, Individual Income Tax Credit: Enter the amount of credit claimed on Form 740, Form 740-NP, or Form 741.
Line 51: No Carryforward Allowed: Do not carry unused cellulosic ethanol credit to another tax year. Any unused amount is not carried forward.
Line 52: Nonrefundable Credit Rule: The cellulosic ethanol credit is nonrefundable. It can reduce eligible Kentucky tax, but it does not create a refund beyond the tax allowed.
Line 53: Taxes The Credit May Apply Against: The credit may be applied against Kentucky individual income tax, corporation income tax, and/or limited liability entity tax.
Line 54: Different Corporation Income Tax And LLET Amounts: The amount claimed against corporation income tax and the amount claimed against LLET may be different.
Line 55: Pass-Through Entity 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 56: Pass-Through Entity Electronic Notice: A pass-through entity must notify the Department of Revenue electronically about all partners, members, shareholders, or beneficiaries who may claim any part of the approved credit.
Line 57: Failure To Provide Pass-Through Information: If the required pass-through owner information is not provided electronically, the available credits for all partners, members, shareholders, or beneficiaries may be forfeited.
Line 58: Pass-Through Email Address: Send the required pass-through owner information to DORTaxCredits@ky.gov.
Line 59: Plain Text Or ASCII Attachment: The electronic notice must include a separate attachment in plain text or plain ASCII format.
Line 60: Owner Name: Include each partner’s, member’s, shareholder’s, or beneficiary’s name in the attachment.
Line 61: Owner Address: Include each owner’s address in the attachment.
Line 62: Owner Telephone Number: Include each owner’s telephone number in the attachment.
Line 63: Owner Identification Number: Include each owner’s identification number in the attachment.
Line 64: Owner Distributive Share Of Tax Credit: Include each owner’s distributive share of the approved tax credit.
Line 65: Credit Rate: The credit rate is generally $1 for each approved gallon of qualifying cellulosic ethanol produced in Kentucky.
Line 66: Kentucky Production Only: Do not claim the credit for cellulosic ethanol produced outside Kentucky.
Line 67: Effective Production Date: The credit applies to qualifying cellulosic ethanol produced on or after January 1, 2008.
Line 68: Credit Certificate Attachment: Attach the credit certificate to the Kentucky tax return where the credit is claimed.
Line 69: Form Code 250298 41A720CELL (10-25): No taxpayer entry is needed for this printed form code. It identifies the schedule version.
Line 70: Page 1 Of 2 And Page 2 Of 2: Review both pages before filing. Page 1 contains the application and credit certificate. Page 2 contains the instructions needed to complete and submit the schedule correctly.
Final Review Before Submitting
Before sending Kentucky Schedule CELL, make sure the taxpayer name, identification number, account number, entity type, mailing address, location address, special fuels dealer’s license account number, ASTM question, production gallons, signature, title, date, and contact information are complete. Attach the required laboratory results for July 1 and December 31. Submit the schedule by fax or email no later than January 15 after the close of the calendar year, then attach the issued credit certificate to the appropriate Kentucky tax return when claiming the credit.