Kentucky requires the following items to be added back to the return to arrive at the Kentucky Adjusted Gross Income:
Interest Income from Bonds Issued by Other States and Their Political Subdivisions (line 1)
Interest on securities issued by other states is taxed by Kentucky.
Resident Adjustment from Partnerships, Fiduciaries and S Corp, Schedule K-1 (line 2)
Resident adjustment from Kentucky Schedule K-1.
Federal Depreciation from Form 4562 (line 3)
Enter total depreciation from federal Form 4562 if you have elected to take the special depreciation allowance or the increased Section 179 deduction for property placed in service after September 10, 2001.
Federal Net Operating Loss (NOL) (line 4)
Line 21 of the 1040 form
Other Additions (line 5)
- Reservists and National Guard expenses reported on federal Form 1040, line 24;
- the portion of a lump-sum distribution on which you have elected the 20% capital gains rate for federal income tax purposes (Schedule P and Form 4972-K required);
- the passive activity loss adjustment (see Form 8582-K and instructions);
- differences in pension (3-year recovery rule) and IRA bases;
- differences in gains (losses) from the sale of intangible assets amortized under the provisions of the Revenue Reconciliation Act of 1993; and
- differences in gains (losses) from the sale of depreciable property placed in service after September 10, 2001;
- Moving expenses claimed on form 1040 Schedule 1, line 13 for members of the armed forces;
- Kentucky excess business loss limitation (you must enclose Form 461-K)
- Contributions claimed on federal Form 1040 or 1040-SR line 10b ($300 above the line charitable deduction)
For additional information, please refer to the Schedule M instructions.
Kentucky does not conform to the $300 "above the line" charitable contribution adjustment. This adjustment is allowed on the Federal tax return as a result of the CARES Act. If you claim this adjustment on your Federal tax return, it must be added back to your Kentucky State return.