Kentucky Schedule RR-E is the application and credit certificate for the railroad expansion income tax and LLET credit. It is used by eligible corporations or railway companies to request the credit for qualified expenditures made to expand or upgrade railroad track so it can handle the transport of fossil energy resources or biomass resources. An eligible taxpayer is either a corporation that owns fossil energy resources subject to Kentucky severance tax or biomass resources and transports those resources using rail facilities, or a railway company subject to tax under KRS 136.120 that serves such a corporation.
What Counts As Qualified Expenditures
Qualified expenditures are the costs paid or incurred to expand or upgrade railroad track, including roadbeds, bridges, and related track structures, so the rail system can accommodate the transport of fossil energy resources or biomass resources.
Filing Deadline
The schedule must be filed by the fifteenth day of the first month after the close of the preceding calendar year. To avoid problems, fax or email it by January 15. Schedules sent after that date, or sent by regular mail without confirmation, are considered void.
Where To Send Kentucky Schedule RR-E
Send the schedule to the Kentucky Department of Revenue by fax or email:
Fax: 502-564-0058
Email: DORTaxCredits@ky.gov
If you do not receive confirmation within two weeks, contact the Division of Corporation Tax at 502-564-8139 or follow up by email.
How To Complete Kentucky Schedule RR-E
Name Of Entity: Enter the full legal name of the corporation or railway company.
Federal Identification Number: Enter the entity’s FEIN.
Kentucky Corporation/LLET Account Number: Enter the account number if applicable. It must be 9 digits. If it has 6 digits, add leading zeros.
Mailing Address: Enter the entity’s mailing address.
Location Address: Enter the business location address.
Entity Type: Check the appropriate box for Corporation or Railway Company taxed under KRS 136.120.
Part I, Qualifications
Question 1: Answer whether the qualified expenditures were made by an entity that is not a corporation that owns fossil energy or biomass resources and transports them by rail, and not a railway company serving such a corporation. If this applies, you do not qualify.
Question 2: Answer whether a credit was claimed under KRS 141.385 for the same qualified expenditures. If yes, you do not qualify.
Question 3: Answer whether another taxpayer claimed a credit under KRS 141.385 or 141.386 for the same qualified expenditures. If yes, you do not qualify.
Qualification Result: If you answer yes to any question, stop because the taxpayer does not qualify. If you answer no to all three, continue to Part II.
Part II, Computation Of The Credit
Line 1: Enter the qualified expenditures paid or incurred during the calendar year.
Line 2: Multiply Line 1 by 25 percent, or 0.25, to calculate the requested credit.
Signature Section
Signature: The application must be signed by an authorized corporate officer, or by a partner or member if filing Form PTE.
Title: Enter the signer’s title.
Date: Enter the signing date.
Contact Name: If different from the signer, list the best contact person.
Email Address: Enter a valid email address.
Telephone Number: Provide a contact phone number.
Fax Number: Enter a fax number if one is used.
Part III, Approved Credit Certificate
This section is completed by the Department of Revenue. If total approved credits for all taxpayers exceed the $1,000,000 annual cap, the department will prorate the approved credit by using the taxpayer’s requested credit as a fraction of the total requested credit.
Line 1(a): Requested credit for the corporation or railway company.
Line 1(b): Total requested credit for all corporations and railway companies.
Approved Credit: The department enters the final approved amount here.
Part IV, Credit Used By Taxpayer
Line 1: Enter the amount of railroad expansion credit claimed against LLET on Schedule TCS, Part II, Column E. This credit cannot reduce LLET below the $175 minimum.
Line 2: Enter the amount of credit claimed against corporation income tax on Schedule TCS, Part II, Column F.
Important Rules
The railroad expansion credit is only available for the tax year in which the qualified expenditures were paid or incurred. It cannot be carried forward to a later year. If the same expenditures qualify for both the railroad maintenance and improvement credit and the railroad expansion credit, the taxpayer must choose one credit or the other, not both.
Recordkeeping And Attachments
Attach the credit certificate to the return that claims the credit. Keep supporting records that show the expenditures were actually paid or incurred for track expansion or upgrades. The filing should also include any required certification or backup documentation.
Final Filing Tip
Make sure the entity information, qualification answers, expenditure amounts, and signature are all complete before submitting the schedule. Since the filing deadline is strict and late submissions are void, sending it early by fax or email is the safest approach.