The following credits require you to print and mail your return to include the required documentation. Please refer to the Kentucky Instructions for the complete details, limits and documents required to claim each credit.
Nonrefundable Limited Liability Entity Tax Credit
This credit is for an individual that is a partner, member or shareholder of an limited liability pass-through entity.
Small Business Tax Credit
A small business may be eligible for a nonrefundable credit of up to 100% of the KY tax imposed.
Kentucky Selling Farmers Tax Credit
Starting with tax year 2020, a selling farmer may be eligible for a nonrefundable credit of up to one hundred percent (100%) of the Kentucky income tax imposed and the limited liability entity tax imposed.
Skills Training Investment Tax Credit
This credit amount is based off of the amount of credit certified by the Bluegrass State Skills Corporation.
Nonrefundable Certified Rehabilitation Credit
This credit is available to owner-occupied structures (residential and commercial) that are listed in the National Register of Historic Places.
Employer’s Unemployment Tax Credit
This credit is for employers that hired employees during the last 6 months of 2017 or during 2018.
Recycling and/or Composting Tax Credit
If you purchased recycling or composite equipment to be used in Kentucky for recycling, you may be entitled to this credit.
Kentucky Investment Fund Tax Credit
If you are an investor you contributed cash to an investment fund that has been certified by the Kentucky Economic Department, you may qualify for this credit.
Qualified Research Facility Tax Credit
A nonrefundable credit is available for an individual or corporation that does any reconstructing and equipping of new or old facilities for qualified research.
Employer GED Incentive Tax Credit
A credit is available for employers who assist employees in completing a learning contract that where the employee agrees to obtain their high school diploma or GED.
Voluntary Environmental Remediation Credit
This credit is only available if the taxpayer has an agreed order with the Environmental and Public Protection Cabinet.
Biodiesel and Renewable Diesel Credit
You may qualify for this credit of taxes imposed on biodiesel and renewable diesel that was produced.
Clean Coal Incentive Credit
A nonrefundable credit is allowed for clean coal facility.
Ethanol Tax Credit
An ethanol producer may qualify for a nonrefundable credit. The credit is $1 per gallon of ethanol produced.
Cellulosic Ethanol Tax Credit
A cellulosic ethanol producer may qualify for a nonrefundable credit. The credit is $1 per gallon of cellulosic ethanol produced.
Railroad Maintenance and Improvement Credit
This nonrefundable credit is available for owners of Class II or Class III railroad located in Kentucky that are used for the transportation of property or services.
Endow Kentucky Credit
If you donated to community foundations across the Commonwealth, you may be eligible for a tax credit of 20% of your donations, not to exceed $10,000.
New Markets Development Program Tax Credit
If a taxpayer makes an investment in a qualified community development, they may be eligible for a credit that can be taken towards their corporation tax.
Food Donation Credit
A credit is available for 10% of the donated edible agricultural products to a nonprofit organization.
Distilled Spirits Credit
A nonrefundable/nontransferable credit is available for taxpayers who pay property tax on distilled spirits.
Angel Investor Credit
A nonrefundable personal credit is available for individuals who invest a minimum of $10,000 in certain KY small businesses with high growth potential.
Film Industry Credit
For applications approved on or after April 27, 2018, a nonrefundable credit against the taxes imposed is available for taxpayers who have received notification from the film office that the approved company has satisfied all requirements.
Starting with tax year 2018, a nonrefundable income tax credit is allowed for ad valorem (property) taxes timely paid on inventory. This credit is phased in as follows: 25% in 2018; 50% in 2019; 75%
in 2020; 100% on 2021 and after.
To enter any of these credits within your Kentucky return, follow the steps below:
- State Section
- Business Incentive and Other Credits