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The Kentucky Department of Revenue (the “Department”) has had a busy start to the New Year. On January 1, 2017, the Department issued a special edition of the Kentucky Tax Alert addressing electronic filing of returns. The Department began accepting corporate income tax returns on January 6, 2017. Forms 725 and 720 mandatory nexus consolidated returns and supporting schedules can now be e-filed for tax year 2016. If a federal extension is used as a six-month extension to file a Kentucky return, a copy of the image of the federal extension is required to be attached to the electronic submission.
Direct debit is an option for e-filed corporate income tax return forms, although direct deposit is not available. Any Kentucky form or schedule requiring a Kentucky Corporation/LLET account number must be populated with the appropriate number associated with the FEIN, and the numbers must match the Department’s records. The Department encourages taxpayers to file electronically but also notes that, for taxpayers who choose to file by mail, the mailing address for the filing of paper returns has changed to: Kentucky Department of Revenue, P.O. Box 856910, Louisville, KY 40285-6910.
The Department also encourages the electronic filing of withholding returns using its Withholding Returns and Payment System (“WRAPS”). Employers with 100 or more W-2s are required to file electronically, and employers with 250 or more 1099 or W-2G forms are required to submit those forms in electronic format to: Kentucky Department of Revenue, CD Processing, 501 High Street, Station 57, Frankfort, KY 40601.
The Department’s Tax Alert also includes a message from the Kentucky Secretary of State’s Office reminding businesses that the 2017 annual report for companies registered in Kentucky is due to be filed with the Secretary of State’s Office between January 1, 2017 and June 30, 2017.
In other news, the Department has issued a permanent regulation, 103 KAR 15:180, effective November 4, 2016, regarding implementation of the new markets development program credit. KRS § 141.434 establishes a nonrefundable tax credit for a person or entity making a qualified equity investment in a qualified community development entity (“CDE”) as provided by KRS § 141.432(6). The Department’s regulation establishes guidelines and filing requirements of a CDE so that the Department may certify qualified equity investments and allocate tax credits accordingly.