Kentucky has made the following changes to the tax laws for the 2023 tax year:
What changes have been made to deductions?
- The Standard Deduction for 2023 is $2,980.
What changes were made to state tax credits?
- Refundable Pass-Through Entity Tax Credit- "The Kentucky General Assembly passed HB 5 during the 2023 Regular Session that established a new Section of KRS Chapter 141 allowing an authorized person to make an annual election to file and pay income tax at the entity level on behalf of the pass-through entity effective for tax years beginning January 1, 2022. Individual owners filing Kentucky individual income tax returns with tax imposed by KRS 141.020 are allowed the refundable pass-through entity tax credit passed through on Form PTET-CR. The credit may be claimed on Kentucky Form 740 or Form 740NP, line 31(g), Refundable Pass-Through Entity Tax Credit."
- Kentucky Entertainment Incentive (KEI) Tax Credit—House Bill 303 made various changes to the KEI tax credit, allocating $25 million for approved continuous production film companies and clarifying that payroll expenditures of loan-out entities can be included in the credit calculation.
For more information, please see Kentucky's instructions.