2023
Kentucky Individual
Income Tax Forms
Electronic Filing—It’s to your advantage! Choose one of these easy methods!
Federal/State Electronic Filing—Individuals who use a professional tax practitioner to prepare their Kentucky income tax return
can le both their state and federal returns by using the E-File Program. With no data entry, you can have your refund in just a few
short weeks.
Federal/State Online Filing—This ling method oers the same benets as the Federal/State E-Filing Program, but you prepare and
le your return from the convenience of your own home computer.
revenue.ky.gov
COMMONWEALTH OF KENTUCKY
DEPARTMENT OF REVENUE
FRANKFORT, KENTUCKY 40620
42A740(PKT) (10-23)
TAXPAYER ASSISTANCE—revenue.ky.gov
Refund Inquiries—You may check the status of your refund at refund.ky.gov. This system is available 24 hours a
day, 7 days a week, and is updated nightly.
The following information from your return will be required:
• Your Social Security number shown on the return.
• The exact whole-dollar amount to be refunded to you.
Kentucky Taxpayer Service Centers—Information and forms are available in the following locations:
Kentucky Department of Revenue
Mission Statement
As part of the Finance and Administration Cabinet, the mission of the Kentucky
Department of Revenue is to administer tax laws, collect revenue, and provide services
in a fair, courteous, and ecient manner for the benet of the Commonwealth and its
citizens.
* * * * * * * * * * * * * * * * * *
The Kentucky Department of Revenue does not discriminate on the basis of race, color,
national origin, sex, age, religion, disability, sexual orientation, gender identity, veteran
status, genetic information or ancestry in employment or the provision of services.
Ashland
1539 Greenup Avenue, Suite 501, 41101–7695
(606) 920–2037
Bowling Green
201 West Professional Park Court, 42104–3278
(270) 746–7470
Corbin
15100 North US 25E, Suite 2, 40701–6188
(606) 528–3322
Frankfort
501 High Street, 40601–2103
(502) 564–5930 (Taxpayer Service Center)
(502) 564–4581 (General Information)
(502) 564–3658 (Forms)
Hopkinsville
181 Hammond Drive, 42240–7926
(270) 889–6521
Louisville
600 West Cedar Street
2nd Floor West, 40202–2310
(502) 595–4512
Northern Kentucky
Turfway Ridge Oce Park
7310 Turfway Road, Suite 190
Florence, 41042–4871
(859) 371–9049
Owensboro
Corporate Center
401 Frederica Street
Building C, Suite 201, 42301–6295
(270) 687–7301
Paducah
Clark Business Complex, Suite G
2928 Park Avenue, 42001–4024
(270) 575–7148
Pikeville
Uniplex Center, Suite 203
126 Trivette Drive, 41501–1275
(606) 433–7675
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STANDARD DEDUCTION—For 2023, the standard deduction is $2,980.
FAMILY SIZE TAX CREDIT—This credit provides benets to individuals and families at incomes up to 133 percent of
the threshold amount based on the federal poverty level. The 2023 threshold amount is $14,580 for a family size of one,
$19,720 for a family of two, $24,860 for a family of three, and $30,000 for a family of four or more.
INTERNAL REVENUE CODE DATE—HB 360 updated KRS 141.010(21) to change the Internal Revenue Code (IRC)
reference date from December 31, 2021, to December 31, 2022, for purposes of computing corporation and individual
income taxes. However, taxpayers who placed property into service after September 10, 2001 are required to compute
Kentucky depreciation under IRC Section 168 according to the provisions in eect on December 31, 2001. Taxpayers who
placed property into service after September 10, 2001 but before January 1, 2020 are required to compute the expense
deduction under IRC Section 179 according to provisions in eect on December 31, 2001. Taxpayers who placed property
into service on or after January 1, 2020 are required to compute the expense deduction under IRC Section 179 according to
provisions in eect on December 31, 2003, except that the phase-out provisions of IRC Section 179, limiting the qualifying
investment in property, shall not apply.
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 le and pay income tax at the entity level on behalf of the pass-through entity eective for tax years beginning
January 1, 2022. Individual owners ling 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.
TREATMENT OF RESTAURANT REVITALIZATION GRANTS—For taxable years beginning on or after January 1, 2020,
but before March 11, 2023, HB 360 provides that Kentucky will treat Restaurant Revitalization Grants in the same manner
as the IRS. This means that the grants are not included in gross income and expenses paid for by funds from the grants
are fully deductible.
KENTUCKY ENTERTAINMENT INCENTIVE (KEI) TAX CREDIT—House Bill 303 made various changes to the KEI tax
credit, allocating $25 million for approved continuous production lm companies and clarifying that payroll expenditures of
loan-out entities can be included in the credit calculation.
What’s New
Reminders
REFUNDABLE DEVELOPMENT AREA TAX CREDIT—If you owned “residential property” on January 1, 2021 that was
located in the West End Development area in Louisville, Kentucky you may be entitled to a refundable development area
tax credit. To qualify for the credit, it must by your principal place of residence, located within the West End development
area and owned as of January 1, 2021. Your credit will be equal to the amount in which the property tax timely paid on the
residential property exceeds the amount of property tax assessed on that residential property on January 1, 2021. KRS
141.398.
REFUNDABLE DECONTAMINATION CREDIT—For taxable years on or after January 1, 2022, but before January 1, 2032,
a taxpayer making a qualifying expenditure at a qualifying decontamination property shall be allowed a refundable credit
against the taxes imposed by KRS 141.020 or 141.040. The taxpayer must by approved by the Energy and Environment
Cabinet per KRS 224.1-420. Maximum tax credit allowed to be claimed per taxable year is 25 percent of the approved
credit. For more information regarding credit for decontamination, contact the Energy and Environment Cabinet at 502-564-
6716. A copy of the approved application must be attached to the tax return claiming this credit. KRS 141.419.
2
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3
Which form should I le?
File Form 740 if you are a full-year
Kentucky resident and meet the ling
requirements in the Instructions for
Form 740.
File Form 740-NP if you are a nonresi-
dent and:
•had income from Kentucky sources.
or are a part-year Kentucky resident
and:
• moved into or out of Kentucky during the
taxable year.
•
had income while a Kentucky resident.
•had income from Kentucky sources while
a nonresident.
File Form 740-NP-R if you are a resident
of a reciprocal state: Illinois, Indiana,
Michigan, Ohio, Virginia, West Virginia
and Wisconsin and you had Kentucky
income tax withheld and had no other
income from Kentucky sources.
Computer–Generated
Returns and 2–D
Barcode
Most software packages produce a 2-D
barcode. The Department of Revenue
scans the barcode that contains all of the
information needed to process your return.
The barcode is printed in the upper right–
hand corner of the return when you prepare
your return using an approved software
package. Last minute changes should
be entered into the program and the entire
return printed again so that the barcode
also contains the correct information.
This barcode should not be covered up or
marked through. Using the barcode reduces
data entry errors for the department and
results in a faster refund for you.
Check to be sure your software generates
an acceptable form. A list of vendors whose
software has been approved is posted on the
Internet at revenue.ky.gov, the Department
of Revenue’s website.
Free Electronic Filing
Options
You may visit https://revenue.ky.gov/
Individual/Pages/FreeFileSoftware.
aspx for free electronic filing options.
You may qualify to le your federal and
Kentucky individual income tax returns
for free depending on your income level.
Some offers require state and federal
returns to be led at the same time. The
Kentucky Department of Revenue does
not endorse any specic tax ling product.
Each software company is responsible
for the accuracy of the software program
instructions and calculations. However, all
software packages will produce a return
which contains the required data elds. The
Kentucky Department of Revenue does
not oer technical assistance for these
software products. You should contact the
tax software customer service department
if you have issues using any of the sof tware
products.
Kentucky also oers another option for
filing your state return electronically,
free of charge. If you would like to fill
out your Kentucky forms and schedules
without software help or assistance
you may use the KY File website.
KY File allows you to file current year
Kentucky individual income tax returns
and is designed to be the simple electronic
equivalent of a paper form. It will provide
basic mathematical and error checks but
unlike most other software it does not
ask about or explain tax situations. Your
federal forms should be completed before
accessing the KY File website. You can
access the KY File website at Filetaxes.
ky.gov .
Where to Get Forms
Forms and instructions are available
online from the Department of Revenue’s
website at revenue.ky.gov and at all
Kentucky Taxpayer Service Centers. They
may also be obtained by writing FORMS,
Kentucky Department of Revenue, 501
High Street, Station 23B, Frankfort, KY
40601, or by calling (502) 564-3658.
Address Change
If you move after you le your tax return,
please notify the Kentucky Department of
Revenue of your new address. This can
be done by sending a change of address
card (available at your local post oce) to:
Taxpayer Assistance Section, Kentucky
Department of Revenue, P.O. Box 181,
Station 56, Frankfort, KY 40602-0181.
Notification can also be made to any
Kentucky Taxpayer Service Center. A list of
locations is included in your packet.
Refund Inquiries
You may check the status of your refund at
refund.ky.gov. This system is available 24
hours a day, 7 days a week, and is updated
nightly. The following information from your
return will be required:
•
Your Social Security Number shown on the
return.
•The exact whole-dollar amount to be
refunded to you.
Information about electronically led returns
should be available within 72 hours of
receipt. Information about other refund re-
quests led on paper will be available after
the return has completed initial processing
(approximately 12 weeks).
Need a Copy of
Your Tax Return?
If you need a copy of your tax return,
you must send your request in writing to:
Taxpayer Assistance Section, Kentucky
Department of Revenue, P.O. Box 181,
Station 56, Frankfort, KY 40602-0181 or
fax to (502) 564-3392. Please include your
name(s) as it appeared on your return,
Social Security number(s), your complete
mailing address, and a photo ID. To ensure
condentiality, all requests must include
your signature.
General Information
2023 Kentucky Individual Income Tax
Instructions for Form 740
42A740(I) (10-23)
4
How Long Should
Records be Kept?
Keep a copy of your tax return, worksheets
and records of all items appearing on it
(such as Forms W-2 and 1099 or other
receipts) until the statute
of limitations runs out for
that return. Usually, this is
four years from the date the
return was due or led (with
extensions), or the date the
tax was paid, whichever
is later. You should keep
some records longer. For
example, keep property records (including
those on your home) as long as they are
needed to gure the basis of the original or
replacement property.
Filing as an Injured
Spouse on Your
Federal Form 1040?
Kentucky does not recognize the federal
injured spouse form. Income tax refunds
may be withheld by the department if you
owe money to the Kentucky Department
of Revenue, another state agency or the
Internal Revenue Service.
Kentucky law requires the oset of the entire
refund if a joint return is led. If spouses
want to keep their tax liabilities and/
or refunds separate, each must file
a separate tax form. If you choose to
le separately on a combined return, for
agencies other than the Department of
Revenue, the refund will be apportioned
between spouses, based on each spouse’s
income. The indebted spouse’s refund will
then be paid to the appropriate agency.
Death of a Taxpayer
If a taxpayer died before ling a return for
2023, the taxpayer’s spouse or personal
representative may have to le and sign
a return for that taxpayer. A personal
representative can be an executor,
administrator or anyone who is in charge
of the deceased taxpayer’s property. If the
deceased taxpayer did not have to le a
return but had tax withheld, a return must
be led to get a refund. The person who
les the return should check the applicable
deceased box at the top of the return.
If your spouse died in 2023 and you did
not remarry in 2023, you can le jointly or
separately on a combined return. The return
should show your spouse’s 2023 income
before death and your income for all of
2023. You can also le jointly or separately
on a combined return if your spouse died
in 2024 before ling a 2023 return. Write
“Filing as surviving spouse” in the area
where you sign the return. If someone else
is the personal representative, he or she
must also sign.
Death of Military
Personnel Killed
in Line of Duty
KRS 141.019(k) exempts all income earned
by soldiers killed in the line of duty from
Kentucky tax for the year during which the
death occurred and the year prior to the year
during which the death occurred.
The exemption applies to tax years
beginning after December 31, 2001. The
income exclusion applies to all income
from all sources of the decedent, not just
military income. The exclusion includes all
federal and state death benets payable to
the estate or any beneciaries.
Amended returns may be led for the year
the soldier was killed in the line of duty and
the year prior to the year of death. The
amended returns must be led within the
statute of limitations period; four years from
the due date, the extended due date or the
date the tax was paid, whichever is later.
If a combined return was led, the exclusion
would apply to the income reported in
Column A or Column B of the Kentucky
return attributable to the military member.
If a joint return was led, the income must
be separated accordingly. Refunds will be
issued in the names on the original return.
Beneciaries or estates that received death
benets that were included in a Kentucky
return may le an amended return to request
a refund of taxes paid on the benet.
The Department of Revenue will use the
Veterans Administration denition for “in
the line of duty,” which states that a soldier
is in the line of duty when he or she is in
active military service, whether on active
duty or authorized leave; unless the death
was the result of the person’s own willful
misconduct.
Income Tax Withholding
for 2024
You may elect to increase your withholding
by updating your K-4 with your employer.
Or if you do not expect to have any tax
liability for the current year or you meet the
modied gross income requirement, you
may be entitled to claim an exemption from
withholding of Kentucky income tax.
2024 Estimated Tax
Payments
Individuals who can reasonably expect
to have income of more than $5,000
from which no Kentucky income tax will
be withheld may be required to make
estimated tax payments on Form 740-ES.
However, if the amount of estimated tax is
$500 or less, no estimated payments are
required. Individuals who do not prepay at
least 90% of the tax to be shown on the
2024 tax return, or 100% of the tax shown
on the 2023 tax return, may be subject to
a penalty for underpayment of estimated
tax. For more information on calculating
the penalty, please refer to Form 2210-K.
Prepayments for 2024 may be made
through withholding, a credit forward of
a 2023 overpayment or estimated tax
installment payments.
Estimated tax installments may
now be made electronically at
revenue.ky.gov, using Form EPAY, or when
electronically ling your return using Form
8879-K, or through mailing a 740-ES with
payment.
The instructions for Form 740-ES include
a worksheet for calculating the amount
of estimated tax due and for making
installment payments. These forms may
be obtained from the Kentucky Depar tment
of Revenue, P. O. Box 518, Frankfort, KY
40602-0518, or any Kentucky Taxpayer
Service Center, or by calling (502) 564-
3658.
5
IRS extensions by e-le (by personal
computer or a tax professional)—
Enclose a copy of Form 4868 with the
conrmation number in the
lower right-hand corner of
the form or a copy of the
electronic acknowledgment.
Military Personnel—Kentucky residents
who are in the military are often granted
extensions for tax filings when serving
outside the United States. Any extension
granted for federal income tax purposes
will be honored for Kentucky income tax
purposes.
Combat Zone Extension—Members
of the Army, Navy, Marines, Air Force,
or Public Health Service of the United
States government who serve in an
area designated as a combat zone by
presidential proclamation shall not be
required to le an income tax return and pay
the taxes, which would otherwise become
due during the period of service, until 12
months after the service is completed.
Members of the National Guard or any
branch of the Reserves called to active duty
to serve in a combat zone are granted the
same extension.
Interest and Penalties—Interest at the
“tax interest rate” applies to any income tax
paid after the original due date of the return.
If the amount of tax paid by the original due
date is less than 75 percent of the tax due,
a late payment penalty may be assessed
(minimum penalty is $10).
Interest and penalty charges can be
avoided or reduced by sending payment
with your extension request by the due date.
If you wish to make a payment prior to the
due date of your return when using the:
(1) Kentucky Extension—Complete
Section II, Kentucky Extension
Payment Voucher, of the Application
for Extension of Time to File, Form
740EXT, and send with payment. Write
“KY Income Tax—2023” and your
Social Security number(s) on the face
of the check.
(2) Federal Automatic Extension—Make
a copy of the lower portion of the
federal Application for Automatic
Extension, Form 4868, and send
with payment. Make check payable
to Kentucky State Treasurer, write
“KY Income Tax–2023” and your Social
Security number on the face of the
check. Enclose the check, Federal
extension and send to Kentucky
Department of Revenue, Frankfort KY
40620-0009.
Return Adjustments
If the Department of Revenue adjusts
your return and you do not understand the
adjustment(s), you may write to Taxpayer
Assistance, Kentucky Department of
Revenue, P.O. Box 181, Station 56,
Frank for t, K Y 40602- 0181, fax your request
to Taxpayer Assistance (502) 564-3392,
or call (502) 564-4581. Please include
your name(s) as it appears on your return,
complete Social Security Number(s), notice
number(s), and daytime contact information.
If you disagree with an adjustment made
to your return, you must appeal the
adjustment by submitting a written protest
within 60 days of notication.
Amended Returns
If you discover that you omitted deductions
or otherwise improperly prepared your
return, you may obtain a refund by ling
an amended return within four years of
the due date of the original return. You
are required to le an amended return
to report omitted income. For 2017 and
later use form 740 and check the box
for amended. For 2016 and prior, use
Form 740-X. You may obtain these
forms by contacting a Kentucky Taxpayer
Service Center or writing FORMS,
Kentucky Department of Revenue, P. O.
Box 518, Frankfort, KY 40602-0518. You
may also download forms at
revenue.
ky.gov the Department of Revenue’s
website.
Federal Audit
Adjustments
Taxpayers who have received a final
determination of an Internal Revenue
Service audit must submit a copy to
the department within 180 days of its
conclusion. The information should be
submitted to the Individual Governmental
Program Section, Kentucky Department
of Revenue, P.O. Box 1074, Station 68,
Frankfort, KY 40602-1074.
Condentiality
Kentucky Revised Statute 131.190 requires
the Department of Revenue to maintain
strict condentiality of all taxpayer records.
No employee of the Department of Revenue
may divulge any information regarding the
tax returns, schedules or reports required
to be led. However, the Department of
Revenue is not prohibited from providing
evidence to or testifying in any court of
law concerning ocial tax records. Also,
Department of Revenue employees
or any other person authorized to
access condential state information
are prohibited from intentionally viewing
such information without an ocial need
to view.
The department may provide official
information on a condential basis to the
Internal Revenue Service or to any other
governmental agency with which it has
an exchange of information agreement
whereby the department receives similar
or useful information in return.
Extension of Time
to File
Taxpayers who are unable to le a return by
April 15 may request an extension of time to
le their return. Taxpayers may elect to le
this request electronically or by mailing the
extension to the Department of Revenue on
or before the due date of the return. The
request must state a reasonable cause for
the inability to le. Inability to pay is not an
acceptable reason. Acceptable reasons
include, but are not limited to, destruction of
records by re or ood and serious illness
of the taxpayer. Extensions are limited
to six months. A copy of the Kentucky
extension request must be enclosed
with your paper return. If you le your
return electronically, you must indicate
that an extension was led by checking
the appropriate box in the software.
Individuals who receive a federal extension
are not required to request a separate
Kentucky extension. They can meet the
requirements by enclosing a copy of the
application for automatic federal extension
to the Kentucky return.
6
Personal Property
Forms
Kentucky business taxpayers are reminded
to report all taxable personal property,
except motor vehicles, owned on January 1
to either the property valuation administrator
in the county of residence (or location of
business) or the Oce of Property Valuation
in Frankfort. Tangible personal property is
to be reported on the Tangible
Personal Property Tax Return,
Form 62A500. The due date
for this return is May 15.
Do not mail this return with your income
tax return; use a separate envelope.
Kentucky State
Treasury—Unclaimed
Property
Individuals—The Kentucky State Treasury
may be holding unclaimed property for
you or your family. The Treasury holds
hundreds of millions of dollars from bank
accounts, payroll checks, life insurance,
utility deposits, and other types of property
that have been unclaimed by the owners.
Please visit treasury.ky.gov or www.
missingmoney.com for more information
on how to locate and claim any funds that
may belong to you.
Businesses—Kentucky businesses are
required to comply with the Kentucky
Revised Uniform Unclaimed Property Act,
codied as KRS Chapter 393A . If you have
uncashed vendor checks, payroll checks,
unclaimed customer deposits or refunds,
or other types of property belonging to
third–parties, you may be required to turn
the property over to the Kentucky State
Treasury. Please review KRS Chapter
393A, or visit treasury.ky.gov for more
information.
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2023 FEDERAL/KENTUCKY INDIVIDUAL INCOME TAX DIFFERENCES
The chart below provides a quick reference guide to the major federal/
Kentucky dierences. It is not intended to be all inclusive. Items not listed
may be referred to the Department of Revenue to determine Kentucky
tax treatment.
Kentucky income tax law is based on the federal income tax law in eect
on December 31, 2022. The Department of Revenue generally follows
the administrative regulations and rulings of the Internal Revenue Service
in those areas where no specic Kentucky law exists.
PROVISION FEDERAL
TAX TREATMENT
KENTUCKY
TAX TREATMENT
1. Interest from Federal Obligations Taxable Exempt
2. Retirement Income from:
Commonwealth of Kentucky Retirement Systems
Kentucky Local Government Retirement Systems
Federal and Military Retirement Systems
Taxable
Taxable
Taxable
3. Pensions and Annuities Starting After 7/1/86 and Before 1/1/90 3-year recovery rule eliminated 3-year recovery rule retained
4. Other Pension and Annuity Income Taxable 100% excludable up to $31,110 per
taxpayer; Schedule P may be required
5. Benets from U.S. Railroad Retirement Board May be taxable Exempt; Schedule P may be required
6. Social Security Benets May be taxable Exempt
7. Capital Gains on Sale of Kentucky Turnpike Bonds Taxable Exempt
8. Other States’ Municipal Bond Interest Income Exempt Taxable
9. Kentucky Local Government Lease Interest Payments Taxable Exempt
10. Capital Gains on Property Taken by Eminent Domain Taxable Exempt
11. Election Workers—Income for Training or Working at Election
Booths
Taxable Exempt
12. Artistic Contributions Noncash contribution allowed as
itemized deduction
Appraised value allowed as itemized
deduction or adjustment to income
13. State Income Taxes Deductible Nondeductible
14. Leasehold Interest—Charitable Contribution May be deductible Deductible; Schedule HH required
15. Work Opportunity Credit (federal Form 5884) Tax credit allowed; wage expense
reduced by amount of credit
No credit allowed
16. Welfare to Work Credit (federal Form 8861) Tax credit allowed; wage expense
reduced by amount of credit
No credit allowed
17. Child and Dependent Care Credit Tax credit based on expenses 20% of federal credit
18. Family Size Tax Credit No credit allowed Decreasing tax credit allowed
19. Education Tuition Tax Credit Tax credit based on expenses Credit allowed
Form 8863-K required
20. Child’s Income Reported by Parent Permitted; taxed at parent’s rate Not permitted
21. Active Duty Military Pay Taxable Exempt
22. Certain Business Expenses of Reservists Deductible Nondeductible
23. Moving Expenses for Members of the Armed Forces Deductible Nondeductible
24. Medical and Dental Expenses Deductible Nondeductible
25. Local Income Taxes Deductible—limited Nondeductible
26. Real Estate Taxes Deductible—limited Nondeductible
27. Personal Property Taxes Deductible—limited Nondeductible
28. Casualty and Theft Losses Deductible Nondeductible
29. Job Expenses and Other Miscellaneous Deductions Nondeductible Nondeductible
Partially exempt if retired
after December 31, 1997;
exempt if retired before
January 1, 1998;
Schedule P may be required
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9
Chart B
Your Kentucky
Adjusted Gross Income
If Your Filing Status is: is greater than:
Single—
Under age 65 ......................... and ................. $ 2,980
Single—
Age 65 or over or blind .......... and ................. $ 3,870
Single—
Age 65 or over and blind........ and ................. $ 4,760
Taxpayer and Spouse—
Both under age 65 ................. and ................. $ 2,980
Taxpayer and Spouse—
One age 65 or over ................ and ................. $ 3,870
Taxpayer and Spouse—
Both age 65 or over ............... and ................. $ 4,760
INSTRUCTIONS
2023 FORM 740
Do You Have to File a Kentucky Return?
If you were a Kentucky resident for the entire year, your ling
requirement depends upon your family size, modied gross
income, Kentucky adjusted gross income and income from self-
employment. You must le if your modied gross income exceeds
the amount in Chart A and your Kentucky adjusted gross income
exceeds the amount in Chart B.
Complete your federal tax return rst. If you are not required to
le a federal tax return, see instructions for line 5.
MODIFIED GROSS INCOME AND FAMILY SIZE
(Use With Chart A)
Family Size—Consists of yourself, your spouse if married and
living in the same household and qualifying children. For the
purposes of computing the Family Size Tax Credit, the maximum
family size is four.
Qualifying Dependent Child—Means a qualifying child as
dened in Internal Revenue Code Section 152(c), and includes
a child who lives in the household but cannot be claimed as a
dependent if the provisions of Internal Revenue Code Section
152(e)(2) and 152(e)(4) apply. In general, to be a taxpayer’s
qualifying child, a person must satisfy four tests:
• Relationship—The taxpayer’s child or stepchild (whether
by blood or adoption), foster child, sibling or stepsibling, or a
descendant of one of these.
• Residence—Has the same principal residence as the taxpayer
for more than half the tax year. A qualifying child is determined
without regard to the exception for children of divorced or
separated parents. Other federal exceptions apply.
• Age—Must be under the age of 19 at the end of the tax year,
or under the age of 24 if a full-time student for at least ve
months of the year, or be permanently and totally disabled at
any time during the year.
• Support—Did not provide more than one-half of his/her own
support for the year.
Modied Gross Income—Modied gross income is the greater
of federal adjusted gross income adjusted to include interest
income derived from municipal bonds (non-Kentucky) and lump-
sum pension distributions not included in federal adjusted gross
income; or Kentucky adjusted gross income adjusted to include
lump-sum pension distributions not included in federal adjusted
gross income.
KENTUCKY ADJUSTED GROSS INCOME
(Use Chart B if Modied Gross Income is Greater Than
the Amounts in Chart A)
Kentucky Adjusted Gross Income—Consists of your federal
adjusted gross income plus any additions and subtractions from
Schedule M, Modications to Federal Adjusted Gross Income.
TAXPAYERS WITH SELF–EMPLOYMENT INCOME—Must le
a Kentucky individual income tax return regardless of the amount
of Kentucky adjusted gross income used in the Chart B if you
have gross receipts from self-employment in excess of modied
gross income for your family size in Chart A.
Part-time or part-year workers may have income taxes withheld
from their paychecks even though the ling requirements are not
met. An income tax return must be led to claim a refund of the
Kentucky taxes withheld.
TIP: Even though the ling requirements are
not met, an income tax return must be led to
claim a refund of the Kentucky taxes withheld.
Chart A
Your Modied Gross
If Your Family Size is: Income is greater than:
One .......................... and .........................$14,580
Two .......................... and .........................$19,720
Three ....................... and .........................$24,860
Four or More ............ and .........................$30,000
10
FILING REQUIREMENTS (Continued)
A child meeting the ling requirements must le a return even
though being claimed as a dependent by the parent. Kentucky
income tax law contains no special provisions for taxing the in-
come of a minor child at the parent’s tax rates nor the reporting
of income of a child on the parent’s return.
Generally, all income of Kentucky residents, regardless of where
it was earned, is subject to Kentucky income tax.
Nonresidents and part-year residents must report income
on Form 740-NP.
Military Personnel—MILITARY PAY EXCLUSION—Eective for
taxable years beginning on or after January 1, 2010, all military
pay received by active duty members of the Armed Forces of the
United States, members of reserve components of the Armed
Forces of the United States, and members of the National Guard
will be exempt from Kentucky income tax per KRS 141.019(l).
Soldiers will claim the exemption by excluding military pay
when ling a Kentucky individual income tax return star ting with
the 2010 return. Provided the military member has no income
other than military pay, he or she would not be required to le
a Kentucky income tax return. The military pay exemption ap-
plies to all Kentucky military members regardless of where the
member is stationed. Kentucky income tax should no longer
be withheld from checks received for military pay, beginning
January 1, 2010. If Kentucky income tax is incorrectly withheld
from a soldier’s military pay, the Department of Revenue will
refund the tax withheld.
Kentucky residents who are in the military are often granted
extensions for military service when serving outside the United
States. Any extension granted for federal income tax purposes
will be honored for Kentucky income tax purposes.
For Fiscal Year Filers Only—Most people pay taxes for a
calendar year. However, if you le for a taxable year other than
a calendar year or for part of a year, enter the beginning and
ending dates of that year on the line at the top of the form.
For Deceased Taxpayers—If a taxpayer died before ling a
return for 2023, the person who les the return should check
the applicable deceased box.
When and Where to File
The income tax return for calendar
year 2023 must be postmarked or
submitted electronically no later than
April 15, 2024, to avoid penalties and
interest. Mail to:
Refund/Other Returns
Kentucky Department of Revenue
Frankfort, KY 40618-0006
Pay Returns
Kentucky Department of Revenue
Frankfort, KY 40619-0008
Taxpayers who expect refunds should le as early as possible to
receive refunds promptly. If you have your tax return prepared by
another person, you may wish to mail the return yourself in order
to ensure prompt ling.
Social Security Number
Social Security Number—You are required to provide your
full Social Security number per Section 405, Title 42, of the
United States Code. This information will be used to establish
your identity for tax purposes only.
Political Party Fund Designation
You may designate $2 of your taxes to either the Democratic or
Republican party if you have a tax liability of at least $2 ($4 for
married persons ling joint returns). Fifty cents will be paid to the
corresponding political organization in your county of residence
and the remainder will be paid to the respective state political
party. This designation will not increase your tax or decrease
your refund. You may make this designation by checking the
applicable box. A taxpayer and spouse may each make a
designation. Persons making no
designation should check the “No
Designation” box.
Reporting Periods and Accounting Procedures
Kentucky law requires taxpayers to report income on the same
calendar or scal year and to use the same methods of accounting
as required for federal income tax purposes. Any federally ap-
proved change in accounting period or methods must be reported
to the Kentucky Department of Revenue. Enclose a copy of the
federal approval.
Changes to federal income tax law made after the Internal Rev-
enue Code reference date contained in KRS 141.010(15) shall
not apply for purposes of Chapter 141 unless adopted by the
General Assembly.
Filing Status
Legal liabilities are aected by the choice of ling status.
Married persons who le joint or combined returns are jointly and
severally liable for all income taxes due for the period covered by
the return. That is, each spouse may be held legally responsible
for payment of taxes on income earned by the other. If spouses
want to credit the refund of one against the liability of the other or
combine their tax liabilities or refunds, they must le a combined
return. If spouses want to keep their tax liabilities and/or
refunds separate, each must le a separate tax form.
Check the box that describes your ling status. If you are
married, led a joint federal return and both you and your
spouse had income, you may be able to reduce your tax by using
Filing Status 2 rather than Filing Status 3.
APRIL 2024
S M T W T F S
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
15
11
of dierences, see the Federal/Kentucky Individual Income Tax
Dierences chart and the line-by-line instructions.
Line 6—Additions to Federal Adjusted Gross Income—Enter
amount from Schedule M, Part I, line 6.
Line 8—Subtractions from Federal Adjusted Gross
Income—Enter amount from Schedule M, Part II, line 17.
Line 9—Kentucky Adjusted Gross Income—Subtract line 8
from line 7. This is your Kentucky Adjusted Gross Income.
Taxable Income
Line 10, Deductions—Taxpayers may elect to itemize deductions
or elect to use the standard deduction of $2,980. If one spouse
itemizes deductions, the other must itemize. See specific
instructions for Schedule A.
Itemizers, complete Schedule A and enter allowable deductions
on line 10.
Nonitemizers, enter the standard deduction of $2,980. If married
ling separately on a combined return, enter $2,980 in both
Columns A and B. If ling a joint return, only one $2,980
standard deduction is allowed.
Line 11—Subtract line 10 from line 9. This is your Taxable
Income.
Tax
Line 12—Determining Your Tax
Tax Computation—Multiply line 11 by four and one-half percent
(.045).
Farm Income Averaging, Schedule J—If you elect farm income
averaging on your federal return, you may also use this method
for Kentucky. The amount of income you may average is limited
to the amount elected for federal purposes. Enter tax
from Schedule J, line 22, on Form 740, line 12, and
check the box for “Schedule J.” Enclose completed
Schedule J.
Line 13, Lump-Sum Distribution—Special 10–Year
Averaging—Kentucky allows a special 10-year averaging
method for determining tax on lump-sum distributions received
from certain retirement plans that qualify for federal 10-year
averaging. If this special method is used for federal purposes,
Form 4972-K, Kentucky Tax on Lump-Sum Distributions, and
Schedule P, Pension Income Exclusion, must be led with Form
740. Enter tax from Form 4972-K and check the box.
Recycling Composting Recapture—Enter amount from
Schedule RC-R and check the box.
Distilled Spirits Recapture—Enter amount from Schedule DS-R
and check the box.
Angel Investor Recapture—Enter amount of Angel investor
income tax credit recapture and check the box.
Filing Status 1, Single—Use this filing status if you are
unmarried, divorced, widowed, legally separated by court decree,
or if you led as “Head of Household” or “Qualifying Widow(er)”
on your federal return.
Filing Status 2, Married Filing Separately on This Combined
Return—Use this ling status to report your incomes individually
but on only one tax form. You do this by lling in both Columns A
and B. You may le separately on this combined return regardless
of whether you led jointly or separately for federal purposes if
both you and your spouse had income. This ling status usually
results in a lower tax than Filing Status 3.
Each spouse must claim his or her own income and deductions.
The total of line 5, Columns A and B, must equal the combined
federal adjusted gross income.
Filing Status 3, Married Filing Joint Return—Use this ling
status if you and your spouse choose to le a joint return even
if one spouse had no income. Jointly means that you and your
spouse add your incomes together and report in Column B. If
both you and your spouse have income, it may be to your benet
to use Filing Status 2.
Filing Status 4, Married Filing Separate Returns—If using
this ling status, you and your spouse must le two separate tax
forms. When ling separate returns, the name and Social Security
number of each spouse must be entered on both returns. Enter
the spouse’s Social Security number in the block provided, and
enter the name on line 4.
Adjusted Gross Income
Line 5, Federal Adjusted Gross Income
Enter the total amount of your federal adjusted gross income from
your federal income tax return in Column B if Filing Status 1, 3 or
4 is used. Use Column A only when entering your spouse’s income
on a combined return (Filing Status 2). When using Filing Status 2,
Columns A and B, line 5, must equal your federal adjusted gross
income. (Do not confuse federal adjusted gross income with
federal taxable income shown on the federal return.)
Where taxpayer and spouse have led a joint return for federal
income tax purposes and have not elected to le a joint Kentucky
income tax return, each spouse must claim his or her own income
and deductions.
If you are not required to le a federal income tax return, enter
on line 5 the total of wages, salaries, tips, fees, commissions,
bonuses, other payments for personal services, taxable
scholarships and fellowships, taxable interest and dividends,
trade or business income, unemployment compensation and all
other income from sources within and without Kentucky including
amounts not reported on enclosed wage and tax statements
(Schedule KW-2). If you have income not supported by a wage
and tax statement, enclose a supporting schedule showing the
source and amount.
Determining Kentucky Adjusted Gross Income—Kentucky law
requires that the individual income tax return begin with federal
adjusted gross income and be adjusted for any dierences to
arrive at Kentucky adjusted gross income. Schedule M is designed
to make “additions to” federal adjusted gross income and provides
for “subtractions from” federal adjusted gross income. For a list
12
If Form 4972-K, Schedule RC-R, Schedule DS-R and/or you had
an angel investor recapture, add the amounts together and enter
the total on line 13.
Line 15—Enter amounts from Schedule ITC, Section A, lines 25E
and 25F. See instructions for Schedule ITC.
Line 17—Enter amounts from Schedule ITC, Section B.
NOTE: Use only if 65 or over, blind, or in Kentucky National Guard.
See instructions for Schedule ITC.
Line 19, Total Tax Liability—Married taxpayers ling a combined
return must add the amounts on line 18, Columns A and B, and
enter the sum on line 19. Other taxpayers should enter the amount
from line 18, Column B, on line 19.
Line 20 and Line 21, Family Size Tax Credit— The Family
Size Tax Credit is based on modied gross income (MGI) and
the size of the family. If your total MGI is $39,900 or less, you
may qualify for Kentucky Family Size Tax Credit.
Enter Family Size. See Schedule ITC for instructions.
Enter Family Size Tax Credit decimal amount determined from
Family Size Tax Credit Table. See instructions for Schedule ITC.
Line 23, Education Tuition Tax Credit—Complete Form 8863–K
to claim this credit. See form and instructions.
Line 24, Child and Dependent Care Credit—Enter in the space
provided the amount of credit calculated on federal Form 2441,
line 11, for child and dependent care expenses. Multiply this
amount by 20 percent (.20), and enter result on line 24.
If you do not meet the ling requirements to le a federal income
tax return but would have been entitled to the federal child and
dependent care credit, you may claim the child and dependent
care credit for Kentucky purposes. Complete and enclose
federal Form 2441, state on the form “did not meet federal ling
requirements” and follow instructions for line 24.
Line 25, RESERVED
13
Line 27, Kentucky Use Tax
Important Reminder from the Department of Revenue About Out-of-State Purchases:
If you made untaxed purchases from out-of-state retailers, the use tax line on your return should contain a number.
Like every other state that has a sales tax, Kentucky has a use tax that requires that out-of-state purchases of tangible personal property, digital
property and extended warranties for use in Kentucky be taxed at the same amount as if they had taken place in Kentucky and subjected to
Kentucky’s sales tax. This ensures equality of treatment between in-state and out-of-state transactions. Although the use tax has been in the
tax code since 1960, it is now more relevant than ever because of the increasing percentage of online sales. Pursuant to KRS 139.330, a 6
percent use tax is due if you make out–of–state purchases for storage, use or other consumption in Kentucky and did not pay at least 6 percent
state sales tax to the seller at the time of purchase. For example, if you order from catalogs, make purchases through the Internet, or
shop outside Kentucky for items such as clothing, shoes, jewelry, cleaning supplies, furniture, computer equipment, pre-written computer
software, oce supplies, books, souvenirs, exercise equipment or subscribe to magazines, you may owe use tax to Kentucky. It is important
to remember that use tax applies only to items purchased from a retailer outside Kentucky, including another country, which would have been
taxed if purchased in Kentucky.
For your convenience, a Use Tax Calculation Worksheet and Optional Use Tax Table are provided below. The Optional Use Tax Table is designed
for those purchases of less than $1,000. If you made untaxed out-of-state purchases in amounts under $1,000, but do not have records readily
available that show the amount of those purchases, you may use the Optional Use Tax Table below to estimate the compensating use tax based
on your Kentucky Adjusted Gross Income (KYAGI). All untaxed purchases in the amount of $1,000 or greater must be accounted for on an
actual basis using the Use Tax Calculation Worksheet. Failure to timely report may result in assessment of penalty and interest in addition to
the tax amount due.
Need more information about use tax?
Visit our website at: revenue.ky.gov
Call or write:
Kentucky Department of Revenue
Attention: Use Tax
P.O. Box 181, Station 53
Frankfort, KY 40602-0181
Optional Use Tax Table
KY AGI* Tax
$0 - $10,000 ............................ $5
$10,001 - $20,000 ................. $15
$20,001 - $30,000 ................. $20
$30,001 - $40,000 ................. $30
$40,001 - $50,000 ................. $40
$50,001 - $75,000 ................. $60
$75,001 - $100,000 ............... $80
Above $100,000 ....................
Multiply AGI by 0.08% (0.0008)
* AGI from line 9 on KY Form 740 or KY Form 740-NP.
Credit Against the Kentucky Use Tax Due
You may reduce or eliminate the amount of Kentucky use tax due by the amount of state sales tax paid to the out-of-state seller on the same
transaction. The reduction may not exceed the amount of Kentucky use tax due on the purchase. For example, if Georgia state sales tax of 4
percent is paid, only the additional 2 percent is due to Kentucky, or if Illinois state sales tax of 6.25 percent is paid, no additional Kentucky use
tax is due. Sales tax paid to a city, county or another country cannot be used as a credit against Kentucky use tax due.
Monday—Friday
8 a.m.—5:00 p.m., ET
(502) 564-5170
1. Purchases of $0 to $1,000
x 6 percent (.06)
OR Use Tax Table Amount
2. Purchases of $1,000 or more
x 6 percent (.06)
3. Total Use Tax Due (add lines 1
and 2)
Use Tax Calculation Worksheet
Call 502-564-5170 for assistance.
Report this amount on Form 740 or 740-NP, line 27.
$
$
$
14
Line 29, Amended returns only—Enter any overpayment
received from your original return.
Line 31(a), Tax Withheld—Enter the amount of Kentucky income
tax withheld as shown on your Schedule KW-2. This schedule
must be enclosed with your return. It is no longer necessary to
submit W-2s, 1099s, and W2Gs with your return. Please retain
these forms with your records and provide upon request.
You will not be given credit for Kentucky income tax withheld
unless you enclose the Schedule KW-2.
Employers are required to give these wage and tax statements
to employees no later than January 31, 2024. If by March 1 you
are unable to obtain a wage and tax statement from an employer,
contact the Department of Revenue for instructions.
You may not claim credit for tax withheld by another state. Within
certain limitations, Kentucky residents may claim a credit for
nonrefundable individual income tax paid to other states. See
Schedule ITC, Section A, line 6.
Local government occupational, license or income tax must not
be included on line 31(a).
Line 31(b), Estimated Tax/Extension Payments Paid—Enter
Kentucky estimated tax payments made for 2023 and amounts
credited from the 2022 return.
Also, include on line 31(b) payments prepaid with extension
requests. Identify as “prepaid with extension.”
Line 31(c), Refundable Certied Rehabilitation Credit—
Enter 2023 approved refundable certied rehabilitation credit
per KRS 141.382(1)(b).
Line 31(d), Refundable Entertainment Incentive Tax
Credit—Enter 2023 approved refundable entertainment
incentive tax credit per KRS 141.383(2)(b)(3).
Line 31(e), Refundable Development Area Tax Credit—Enter
2023 approved refundable development area tax credit per
KRS 141.398(2). If you have “residential property” located in the
West End Development area located in Louisville, Kentucky you
may be entitled to a development area tax credit. To qualify for
the credit, it must be your principal place of residence, located
within the West End development area and owned as of January
1, 2021. Your credit will be equal to the amount in which the
property tax timely paid on the residential property exceeds the
amount of property tax assessed on that residential property
on January 1, 2021. KRS 141.398.
Line 31(f), Refundable Decontamination Credit—Enter
2023 approved refundable decontamination credit per KRS
141.419(2).
Line 31(g), Refundable Pass-Through Entity Credit—Enter
the amount of pass-through entity tax credit from form PTET- CR,
line 9.
Line 31(h), Amended Returns—Enter amount paid with original
return plus additional payment(s) made after it was led.
Line 32—Total of amounts on lines 31(a) through 31(h).
Line 33—Compare the amounts on lines 30 and 32. If line 30 is
larger than line 32, subtract line 32 from line 30, enter additional
tax due. This is your additional tax due before penalties and
interest.
Penalties and Interest
Line 34(a), Estimated Tax Penalty—If the amount owed is more
than $500, you may be subject to a penalty for underpayment
of estimated tax.
The amount of the penalty may be calculated on Form 2210–K.
Form 2210–K may also be used by qualifying farmers and others
to claim exemption to the penalty. If paying the penalty or claiming
an exemption, complete Form 2210–K, enclose with your return
and check the box beside line 34(a). Enter the amount of the
penalty on line 34(a).
If your return is led after April 15, 2024, or any tax due on the
return is paid af ter April 15, 2024, you may be subject to additional
penalties and interest.
Line 34(b), Interest—Interest will be assessed at the “tax inter-
est rate” from the original due date of the return until the date
of payment.
Line 34(c), Late Payment Penalty—If the amount of tax due
as shown on line 33 is not paid by the original due date of the
return, a penalty of 2 percent of the tax computed due may be
assessed for each 30 days or fraction thereof that the tax is
past due, not to exceed 20 percent. The minimum penalty is
$10. However, if the amount timely paid is 75 percent of the tax
determined due by the Department of Revenue, no late payment
penalty will be assessed.
Line 34(d), Late Filing Penalty—If a return is not led by the due
date or the extended due date, a penalty of 2 percent of the total
tax due for each 30 days or fraction thereof that a return is not
led may be assessed, not to exceed 20 percent. The minimum
penalty is $10.
Note: Penalties but not interest may be reduced or waived if
reasonable cause for reduction or waiver can be shown.
Line 35, Total of amounts on lines 34(a) through 34(d).
Line 36, Amount You Owe—If the total of lines 30 and 35 is
more than line 32, subtract line 32 from the total of lines 30 and
35. When ling the return, you must pay any tax due shown on
line 36.
Your 2023 individual income tax may be paid using any of the
following options:
• Form EPAY (42A740-EPAY), if supported by your software
vendor, may be used to make an electronic payment of tax
due separately from ling your tax return. Refer to the Form
EPAY (42A740-EPAY) instructions for additional information.
• Form 8879-K, for use when simultaneously making an
electronic payment and ling your return.
• Pay by Credit Card or ACH Debit through April 15, 2024.
Kentucky accepts MasterCard, VISA, Discover, or American
Express. Access the Department of Revenue’s secure website
(revenue.ky.gov) to make electronic payments.
15
Line 38(b), Child Victims’ Trust Fund (CVTF)—Contributions
to this fund nance regional and statewide prevention programs
which utilize innovative strategies to provide children with
personal safety skills, teach adults how to keep children safe
from child sexual abuse and exploitation, and inform the public
about mandatory reporting of suspected child
abuse. The CVTF also provides partial
reimbursement for child sexual abuse medical
exams at Children’s Advocacy Centers across
the Commonwealth. This fund is administered
through the Attorney General’s oce and relies on tax-deductible
contributions and private donations. Contributions may be made
directly to the Child Victims’ Trust Fund, Oce of Child Abuse
and Human Tracking Prevention and Prosecution, 1024 Capital
Center Drive, Suite 200, Frankfort, KY 40601, or by visiting
https://icareaboutkids.ky.gov. For more information call (502)
696-5312.
Line 38(c), Veterans’ Program Trust Fund—Contributions to
this fund are administered by a Board of Directors. The Trust
Fund is used to provide services to veterans that are not already
resourced by state law or federal appropriation. In an eort to
recognize the service and sacrice of Kentucky’s deserving
veterans, the fund supports programs that provide direct benets
to Kentucky veterans, programs such as shelters for homeless
men and women veterans, therapy programs including those
providing service dogs, equine therapy, and other specialized
therapy programs designed to assist veterans suering from
Post-Traumatic Stress Disorder. Contributions may also be made
directly to the Kentucky Veterans’ Program Trust Fund, 1111B
Louisville Road, Frankfort, KY 40601.
Line 38(d), Breast Cancer Research and Education
Trust Fund—Contributions will be used to fund breast
cancer research, education, awareness,
treatment and
screening. Additional
information may be obtained from the
Division
of Women’s Health, (502) 564-3236 or at
https://chfs.ky.gov/agencies/dph/dwh/Pages/
default.aspx. Contributions may also be made
directly to the state Department for Public Health,
Division of Administration and Financial Management, 275 East
Main Street, HS1GWA, Frankfort, KY 40621, (502) 564-6663.
Line 38(e), Farms to Food Banks Trust Fund—Contributions to
this fund are used to oset farmers’ costs for providing Kentucky
grown and raised surplus agricultural commodities to food banks.
Cash ow for farmers is strengthened
while access to healthy food among
struggling Kentuckians is increased.
This fund is administered by the
Kentucky Department of Agriculture.
Contributions can also be made
directly to the Farms to Food Banks
Trust Fund, c/o the Kentucky Department of Agriculture, 111
Corporate Drive, Frankfort, KY 40601, (502) 573-0282.
• Pay by check using Form 740–V if you led your return
electronically. Make check payable to Kentucky State
Treasurer, write “KY Income Tax–2023” and your Social
Security number on the face of the check. Enclose the check
and Form 740–V in the same envelope.
Actual withdrawal of electronic payments may be later than
requested date. Please allow up to two weeks for processing.
If you need assistance with payment options, you may call the
Department of Revenue at (502) 564-4581.
Note: If you cannot pay your tax in full, le your return and pay as
much as possible by April 15. Contact the Department of Revenue
for additional payment information.
Line 37, Amount Overpaid—If you have an overpayment on
line 37 you may have all of this amount refunded to you. You also
may contribute all or part of it to the Nature and Wildlife Fund, the
Child Victims’ Trust Fund, the Veterans’ Program Trust Fund, the
Breast Cancer Research and Education Trust Fund, the Farms
to Food Banks Trust Fund, Local History Trust Fund, Special
Olympics Kentucky, Pediatric Cancer Research Trust Fund, Rape
Crisis Center Trust Fund, Court Appointed Special Advocate Trust
Fund, YMCA Youth Association Fund, and/or credit all or part of
it toward your 2024 estimated tax.
Voluntary Refund Contributions
Donations to the following funds are voluntary and amounts
donated will reduce your refund. You may contribute all or a
portion of your overpayment to one or more of the following funds.
Enter the amount you wish to contribute on the appropriate lines.
Line 38(a), Nature and Wildlife Fund—Contributions will
purchase and protect Kentucky’s nest natural areas as state
nature preserves and for nongame species protection. The
Kentucky Department of Fish and Wildlife Resources and the
Kentucky Nature Preserves work together to
protect Kentucky’s rare plants and animals;
and acquire the most naturally outstanding
forests, wetlands and prairies in order to
provide a home for Kentucky’s unique and
diverse wildlife. Your tax deductible
contributions play a critical role in protecting the wildlands that
make Kentucky famous. Contributions may also be made directly
to the Nature and Wildlife Fund, c/o the Oce of Kentucky Nature
Preserves, or c/o the Kentucky Department of Fish and Wildlife
Resources, 300 Sower Blvd., 4th Floor, Frankfort, KY 40601.
Help keep the Bluegrass state green!
Kentucky Department of Fish and Wildlife Resources:
http://www.fw.ky.gov
Kentucky Nature Preserves:
https://eec.ky.gov/Nature-Preserves/
16
Line 38(f), Local History Trust Fund—Contributions to this
fund support grants for local history organizations— museums,
historical societies, genealogical societies, and more—that
help preserve their communities’
history as well as share their role
in Kentucky’s development and
the lasting impact they have made
on our commonwealth and nation.
The fund is administered through
the Kentucky Historical Society.
Contributions may also be made directly to the Local History Trust
Fund, Kentucky Historical Society, 100 W. Broadway, Frankfort,
KY 40601.
Line 38(g), Special Olympics Kentucky—Contributions will help
Special Olympics Kentucky provide condence and self-esteem
building sports programs for more than 10,000 athletes with
intellectual disabilities in Kentucky. They will also help Special
Olympics Kentucky provide more than 1,000
free medical screenings through our Healthy
Athletes Program and give small children with
intellectual disabilities a head start through our
Young Athletes program. Contributions will also
support our school-based programs that help build bridges and
foster understanding between students with intellectual disabilities
and their peers. Contributions can also be made directly to Special
Olympics Kentucky, 105 Lakeview Ct., Frankfort, KY 40601.
Help Special Olympics Kentucky Change Lives!
Special Olympics Kentucky
http://www.soky.org
Line 38(h), Pediatric Cancer Research Trust Fund—
Contributions will be used to fund pediatric cancer research and
treatment for Kentucky patients. Additional information
may be obtained from the Division of Prevention and
Quality Improvement, (502) 564-7996 or at http://chfs.
ky.gov/dph/info/dpqi/cd. Contributions may also be
made directly to the Pediatric Cancer Research Trust
Fund, Department for Public Health, Division of
Prevention and Quality Improvement, Chronic Disease
Prevention Branch, 275 East Main Street, HS2WE, Frankfort, KY
40621.
Line 38(i), Rape Crisis Center Trust Fund—Contributions to this
fund are used to provide direct services to Kentucky citizens who
have experienced sexual violence, sexual assault, or rape at any
time in their lifetime as well as serving their family and friends. It
is also used to provide programs to prevent perpetration of sexual
assault against Kentucky’s youth. Services and programs are
provided by Kentucky’s 13 regional rape crisis centers designated
by the Cabinet for Health and Family Services, Department for
Community Based Services. Contributions can also be made
directly to Kentucky Association of Sexual Assault Programs
(KASAP), P. O. Box 4028, Frankfort, KY 40604, (502) 564-9433.
Additional information on how to access services or programs
can be viewed at www.kasap.org
Line 38(j), Court Appointed Special Advocate Trust Fund—
Contributions to this fund are used to support and strengthen
the local Court Appointed Special Advocate (CASA) programs in
Kentucky, where more than 1,100 trained volunteers advocate
for the best interests of abused and neglected children. The
trust fund is used to expand capacity of local CASA programs
that train and recruit Kentucky’s citizens who will advocate
for abused and neglected children involved in Kentucky’s
court system. Contributions may also be made directly to
Kentucky CASA Network, 1640 Lyndon Farm Court, Suite
108, Louisville, KY 40223. Help support Kentucky’s most
vulnerable children. For more information about the KCN,
call (502) 238-2154 or visit www.kentuckycasanetwork.org
Line 38(k), Kentucky YMCA Youth Association Fund—
Kentucky YMCA Youth Association is the largest Youth
and Government program provider in the nation. 100% of
contributions will go directly to provide scholarships to Kentucky
schools and students attending the Kentucky Youth Assembly
(KYA): an in-depth experiential learning program in which
middle and high school students participate as state ocials
in simulated state-level legislative, advocacy, and courtroom
proceedings. As a completely student-led and run program, K YA
participants experience rst-hand the workings of all branches
of state government, and leave with increased knowledge,
skills, and condence to be active and eective participants in
their communities. Contributions may be made directly to the
Kentucky YMCA Youth Association, 91 C. Michael Davenport
Blvd. Frankfort, KY 40601 or at www.kyymca.org/give.
Line 39, Total of amounts on lines 38(a) through 38(k).
Line 40, Estimated Tax—You may credit all or part of the
overpayment toward your estimated tax liability for 2024. Enter
the amount you want credited on line 40. Credit forwards are not
available on amended returns.
Line 41, Refund—Subtract amounts entered on lines 39 and 40
from line 37. Enter the dierence, if any, on line 41. This amount
will be refunded to you. If the total of lines 39 and 40 equals the
amount on line 37, enter a zero on line 41.
COPY OF FEDERAL RETURN
You must enclose a complete copy of your federal return if
you received farm, business, or rental income or loss.
Check the box on Form 740, page 3 if you are not required to
enclose a copy of your federal return.
SIGN RETURN
Be sure to sign on page 3 after completion of your return.
Each return must be signed by the taxpayer. Joint and combined
returns must be signed by both taxpayer and spouse. Returns
that are not signed may be returned to you for signature.
Enter Driver’s License/State issued ID number.
Enter a daytime telephone number where you can be reached.
You may be contacted for additional information. Check the box
if you will allow the Department of Revenue to discuss your return
information with your preparer.
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19
Instructions for Schedule ITC
You must le Schedule ITC if you have:
• nonrefundable business incentive credits
• Personal tax credits (65 or over, blind or in Kentucky
National Guard)
• qualifying dependent children and are claiming the
Family Size tax credit.
SECTION A—BUSINESS INCENTIVE AND OTHER TAX
CREDITS
Line 1, Nonrefundable Limited Liability Entity Tax Credit
(KRS 141.0401(2))
An individual that is a partner, member, or shareholder of a
limited liability pass–through entity is allowed a limited liability
entity tax (LLET) credit against the income tax imposed by KRS
141.020 equal to the individual’s proportionate share of LLET
computed on the gross receipts or gross prots of the limited
liability pass–through entity as provided by KRS 141.0401(2),
after the LLET is reduced by the minimum tax of $175 and by
other tax credits which the limited liability pass–through entity
may be allowed. The credit allows an individual that is a partner,
member, or shareholder of a limited liability pass-through entity
against income tax shall be applied only to income tax assessed
on the individual’s proportionate share of distributive income
from the limited liability pass–through entity as provided by KRS
141.0401(3)(b). Any remaining LLET credit shall be disallowed
and shall not be carried forward to the next year.
Nonrefundable Kentucky limited liability entity tax credit (KRS
141.0401(2))—The credit amount is shown on Kentucky
Schedule(s) K–1 from pass-through entities (PTEs) or Form(s)
725 for single member limited liability companies. Copies of
Kentucky Schedule(s) K-1 or Form(s) 725 must be enclosed
with your return.
Kentucky Limited Liability Entity Tax Credit Worksheet
Worksheet C
Complete a separate worksheet for each LLE. Retain for your
records.
Name _____________________________________________
Address ___________________________________________
FEIN _____________________________________________
Percentage of Ownership ....................... ____________ %
1. Enter Kentucky taxable income from
Form 740, line 11 or 740-NP, line 13 .... ______________
2. Enter LLE income as shown
on Kentucky Schedule K-1
or Form 725 ........................................ ______________
3. Subtract line 2 from line 1 and
enter total here ..................................... ______________
4. Enter Kentucky tax on income
amount on line 1 ................................... ______________
5. Enter Kentucky tax on income
amount on line 3 ................................... ______________
6. Subtract line 5 from line 4. If line 5
is larger than line 4, enter zero.
This is your tax savings if income
is ignored .............................................. ______________
7. Enter nonrefundable limited liability
entity tax credit (from Kentucky
Schedule K-1 or Form 725) ............... ______________
8. Enter the lesser of line 6 or line 7.
This is your credit. Enter here and
on Schedule ITC, Section A, line 1 ....... ______________
Line 2, Kentucky Small Business Tax Credit—For taxable
years beginning after December 31, 2010, a small business
may be eligible for a nonrefundable credit of up to one hundred
percent (100%) of the Kentucky income tax imposed under KRS
141.020 or 141.040, and the limited liability entity tax imposed
under KRS 141.0401.
The small business development credit program authorized
by KRS 154.60-020 and KRS 141.384 was amended to allow
the credit to apply to taxable years beginning after December
31, 2010. The denition of base year for purposes of the credit
computation was changed to the rst full year of operation that
begins on or after January 1, 2009 and before January 1, 2010.
Small businesses are eligible to apply for credits and receive nal
approval for these credits one (1) year after the small business:
• Creates and lls one (1) or more eligible positions over the
base employment, and that position or positions are created
and lled for twelve (12) months; and
• Invests ve thousand dollars ($5,000) or more in qualifying
equipment or technology.
The small business shall submit all information necessary to the
Kentucky Economic Development Finance Authority to determine
credit eligibility for each year and the amount of credit for which
the small business is approved.
A small business that is a pass-through entity not subject to the
tax imposed by KRS 141.040 and that has tax credits approved
under Subchapter 60 of KRS Chapter 154 shall apply the credits
against the limited liability entity tax imposed by KRS 141.0401,
and shall also distribute the amount of the approved tax credits
to each partner, member, or shareholder based on the partner’s,
member’s, or shareholder’s distributive share of income as
determined for the year during which the tax credits are approved.
The maximum amount of credits that may be committed in each
scal year by the Kentucky Economic Development Finance
Authority shall be capped at three million dollars ($3,000,000).
The maximum amount of credit for each small business for each
year shall not exceed twenty-ve thousand dollars ($25,000).
The credit shall be claimed on the tax return for the year during
which the credit was approved.
Unused credits may be carried forward for up to ve (5) years.
20
Line 3, Kentucky Selling Farmers Tax Credit—For taxable
years beginning January 1, 2020, a selling farmer may be eligible
for a nonrefundable credit of up to one hundred percent (100%) of
the Kentucky income tax imposed under KRS 141.020 or 141.040,
and the limited liability entity tax imposed under KRS 141.0401.
The small business development credit program authorized
by KRS 154.60-020 and KRS 141.384 was amended to allow
the credit to apply to taxable years beginning after December
31, 2010. The denition of base year for purposes of the credit
computation was changed to the rst full year of operation that
begins on or after January 1, 2009 and before January 1, 2010.
Small businesses are eligible to apply for credits and receive nal
approval for these credits one (1) year after the small business:
• Creates and lls one (1) or more eligible positions over the
base employment, and that position or positions are created
and lled for twelve (12) months; and
• Invests ve thousand dollars ($5,000) or more in qualifying
equipment or technology.
The small business shall submit all information necessary to the
Kentucky Economic Development Finance Authority to determine
credit eligibility for each year and the amount of credit for which
the small business is approved.
A selling farmer that is a pass-through entity not subject to the
tax imposed by KRS 141.040 and that has tax credits approved
under Subchapter 60 of KRS Chapter 154 shall apply the credits
against the limited liability entity tax imposed by KRS 141.0401,
and shall also distribute the amount of the approved tax credits
to each partner, member, or shareholder based on the partner’s,
member’s, or shareholder’s distributive share of income as
determined for the year during which the tax credits are approved.
The maximum amount of selling farmers credit for each year shall
not exceed twenty-ve thousand dollars ($25,000) and cannot
exceed $100,000 over the lifetime of the selling farmers credit.
The credit shall be claimed on the tax return for the year during
which the credit was approved.
Unused credits may be carried forward for up to ve (5) years.
Line 4, Skills Training Investment Tax Credit—Enter
the amount of credit certied by the Bluegrass State Skills
Corporation. A copy of the Kentucky Schedule K-1 for the year
the credit was approved must be enclosed with the return in
the rst year the credit is claimed. The excess credit over the
income tax liability in the year approved may be carried forward
for three successive taxable years. For information regarding
the application and approval process for this credit, contact
the Cabinet for Economic Development, Bluegrass State Skills
Corporation at (502) 564-2021.
Line 5, Nonrefundable Certied Rehabilitation Credit—This
credit is available to owner–occupied residential and commercial
preservation projects for structures that are listed in the National
Register of Historic Places, or in a National Register historic
district, up to $3 million annually. The credit is 30 percent of
certied rehabilitation expenses for owner–occupied residential
properties, not to exceed $60,000 per project, and 20 percent
for commercial and income-producing properties. To qualify, an
owner must spend at least $20,000 on rehabilitation.
Individuals or businesses can apply the credit against their state
income tax liability, carry the credit forward up to seven years
or transfer it to a banking institution to leverage nancing. For
applications submitted on or after April 30, 2010, the credit shall
be refundable if the taxpayer makes an election under KRS
171.397(2)(b). For more information regarding this credit, visit the
Kentucky Heritage Council’s website at www.heritage.ky.gov,
or call (502) 564–7005.
Line 6, Credit for Tax Paid to Another State—Kentucky
residents are required to report all income received including
income from sources outside Kentucky. Within certain limitations,
a credit for income tax paid to another state may be claimed. The
credit is limited to the amount of Kentucky tax savings had the
income reported to the other state been omitted, or the amount
of tax paid to the other state, whichever is less. As per KRS
141.070(3) “state” means a state of the United States, the District
of Columbia, the commonwealth of Puerto Rico, or any territory
or possession of the United States.
Any resident entity owner of an electing entity, as those terms
are dened in KRS 141.209, doing business in another state in
which the tax is assessed and paid at the entity level shall be
allowed a credit. The credit shall be based on the entity owner’s
distributive share of the electing entity’s items of income, loss,
deduction, and credit.
You may not claim credit for tax withheld by another state.
You must le a return with the other state and pay tax on income
also taxed by Kentucky in order to claim the credit. A copy of the
other state’s return including a schedule of income sources must
be enclosed to verify this credit. If you owe tax in more than one
state, the credit for each state must be computed separately.
Reciprocal States—Kentucky has reciprocal agreements with
specic states. These agreements provide for taxpayers to be
taxed by their state of residence, and not the state where income
is earned. Persons who live in Kentucky for more than 183 days
during the tax year are considered residents and reciprocity does
not apply. The states and types of exemptions are as follows:
Illinois, West Virginia—wages and salaries
Indiana—wages, salaries and commissions
Michigan, Wisconsin—income from personal services
(including salaries and wages)
Ohio—wages and salaries. Note: Wages which an S
corporation pays to a shareholder–employee if the share-
holder–employee is a “twenty (20) percent or greater” direct
or indirect equity investor in the S corporation shall not be
exempt under the reciprocity agreement.
Virginia—commuting daily, salaries and wages
Kentucky does not allow a credit for tax paid to a reciprocal state
on the above income. If tax was withheld by a reciprocal state, you
must le directly with the other state for a refund of those taxes.
21
Credit for Taxes Paid to Other State Worksheet
Worksheet A
Kentucky residents/part-year residents only. Complete a
separate worksheet for each state.
TIP—Credit for taxes paid to another state
may be reduced or eliminated if gambling
losses are claimed on Schedule A.
Name of other state .....................................
1. List Kentucky taxable income from
Form 740, line 11 or 740-NP, line 13 .... ______________
2. List any gambling losses from
Schedule A ........................................... ______________
3. Add lines 1 and 2 and enter
total here .............................................. ______________
4. List income reported to other
state included on Kentucky return ........ ______________
5. Subtract line 4 from line 3 and
enter total here ..................................... ______________
6. Adjusted gambling losses. Compute
gambling losses allowed on Kentucky
return if income from other state
is ignored .............................................. ______________
7. Subtract line 6 from line 5 and
enter total here ..................................... ______________
8. Enter Kentucky tax on income
amount on line 7 ................................... ______________
9. Enter Kentucky tax on income
amount on line 1 ................................... ______________
10. Subtract line 8 from line 9. This is
the tax savings on return if other
state’s income is ignored ...................... ______________
11. Enter tax paid to other state on
income claimed on Kentucky return ..... ______________
12. Enter the lesser of line 10 or line 11.
This is your credit for tax paid to
other state. Carry this total to
Schedule ITC, Section A, line 6 ............ ______________
Line 7, Employer’s Unemployment Tax Credit—If you hired
unemployed Kentucky residents to work for you during the last six
months of 2022 or during 2023, you may be eligible to claim the
unemployment tax credit. In order to claim a credit, each person
hired must meet specic criteria. For each qualied person, you
may claim a tax credit of $100. The period of unemployment must
be certied by the Oce of Employment and Training, Education
Cabinet, 275 East Main Street, 2-WA, Frankfort, KY 40621-0001,
and you must maintain a copy of the certication in your les. A
copy of Schedule UTC must be enclosed with your return.
Line 8, Recycling and/or Composting Tax Credit—
Individuals who purchase recycling or composting equipment
to be used exclusively in Kentucky for recycling or composting
postconsumer waste materials, are entitled to a credit against
the tax equal to 50 percent of the installed cost of the equipment
pursuant to KRS 141.390. Application for this credit must be made
on Schedule RC, which may be obtained from the Depar tment of
Revenue. A copy of Schedule RC and/or Schedule K-1 reecting
the amount of credit approved by the Department of Revenue
must be enclosed with the return.
Line 9, Kentucky Investment Fund Tax Credit—Limits on
Kentucky Investment Fund Act (KIFA) Credits—An investor
whose cash contribution to an investment fund has been certied
by the Kentucky Economic Development Finance Authority
(KEDFA) is entitled to a nonrefundable credit against Kentucky
income tax equal to 40 percent of the cash contribution. For
investments before July 1, 2002, the amount of credit that may
be claimed in any given year is limited to 25 percent of the
total amount certied by the Kentucky Economic Development
Finance Authority (KEDFA). For investments after June 30,
2002, the credit is claimed on the tax return led for the tax year
following the year in which the credit is granted and is limited
in any tax year to 50 percent of the initial aggregate credit
apportioned to the investor. Enclose a copy of the certication
by KEDFA in the rst year claimed. Any excess credit may be
carried forward. No credit may extend beyond 15 years of the
initial certication.
Line 10, Qualified Research Facility Tax Credit— A
nonrefundable credit is allowed against individual and corporation
income taxes equal to 5 percent of the cost of constructing and
equipping new facilities or expanding or remodeling existing
facilities in Kentucky for qualied research. “Qualied research”
is dened to mean qualied research as dened in Section 41
of the IRC. Any unused credit may be carried forward 10 years.
Complete and enclose Schedule QR, Qualied Research Facility
Tax Credit.
Line 11, Employer GED Incentive Tax Credit—KRS Chapter
164.0062 provides a nonrefundable income tax credit for
employers who assist employees in completing a learning
contract in which the employee agrees to obtain his or her high
school equivalency diploma. The employer shall complete the
lower portion of the GED-Incentive Program Final Report (Form
DAEL-31) and enclose a copy to the return to claim this credit.
Shareholders and partners should enclose a copy of Schedule
K-1 showing the amount of credit distributed. For information
regarding the program, contact the Education Cabinet, Kentucky
Adult Education, Council on Postsecondary Education.
Line 12, Voluntary Environmental Remediation Credit—This
line should be completed only if the taxpayers have an agreed
order with the Environmental and Public Protection Cabinet under
the provisions of KRS 224.1-400 or 405 and have been approved
for the credit by the Department of Revenue. Maximum credit
allowed to be claimed per taxable year is 25 percent of approved
credit. For more information regarding credit for voluntary
environmental remediation property, contact the Environmental
and Public Protection Cabinet at (502) 564-3350. To claim this
credit, Schedule VERB must be enclosed.
Line 13, Biodiesel and Renewable Diesel Credit—Producers
and blenders of biodiesel and producers of renewable diesel are
entitled to a tax credit against the taxes imposed by KRS 141.020,
KRS 141.040 and KRS 141.0401. The taxpayer must le a claim
for biodiesel and renewable diesel credit with the Department
of Revenue by January 15 each year for biodiesel produced
or blended and the renewable diesel produced in the previous
calendar year. The department shall issue a credit certication to
the taxpayer by April 15. The credit certication must be enclosed
with the tax return claiming this credit.
22
Line 14, Clean Coal Incentive Tax Credit—A nonrefundable,
nontransferable credit against taxes imposed by KRS 136.120,
KRS 141.020, KRS 141.040 or KRS 141.0401 shall be allowed
for a clean coal facility. As provided by KRS 141.428, a clean coal
facility means an electric generation facility beginning commercial
operation on or after January 1, 2005, at a cost greater than
$150 million that is located in the Commonwealth of Kentucky
and is certied by the Environmental and Public Protection
Cabinet as reducing emissions of pollutants released during
generation of electricity through the use of clean coal equipment
and technologies. The amount of the credit shall be two dollars
($2) per ton of eligible coal purchased that is used to generate
electric power at a certied clean coal facility.
Line 15, Ethanol Tax Credit—An ethanol producer shall be
eligible for a nonrefundable tax credit against the taxes imposed
by KRS 141.020 or 141.040 and 141.0401 in an amount
certied by the department. The credit rate shall be one dollar
($1) per ethanol gallon produced, unless the total amount of
approved credit for all ethanol producers exceeds the annual
ethanol tax credit cap. If the total amount of approved credit
for all ethanol producers exceeds the annual ethanol tax credit
cap, the department shall determine the amount of credit each
ethanol producer receives by multiplying the annual ethanol tax
credit cap by a fraction, the numerator of which is the amount of
approved credit for the ethanol producer and the denominator of
which is the total approved credit for all ethanol producers. The
credit allowed shall be applied both to the income tax imposed
under KRS 141.020 or 141.040 and to the limited liability entity
tax imposed under KRS 141.0401, with the ordering of credits
as provided in KRS 141.0205. Any remaining ethanol credit
shall be disallowed and shall not be carried forward to the next
year. “Ethanol producer” is dened as an entity that uses corn,
soybeans, or wheat to manufacture ethanol at a location in this
Commonwealth.
Line 16, Cellulosic Ethanol Tax Credit—A cellulosic ethanol
producer shall be eligible for a nonrefundable tax credit against
the taxes imposed by KRS 141.020 or 141.040 and 141.0401 in
an amount certied by the department. The credit rate shall be
one dollar ($1) per cellulosic ethanol gallon produced, unless
the total amount of approved credit for all cellulosic ethanol
producers exceeds the annual cellulosic ethanol tax credit cap.
If the total amount of approved credit for all cellulosic ethanol
producers exceeds the annual cellulosic ethanol tax credit cap, the
department shall determine the amount of credit each cellulosic
ethanol producer receives by multiplying the annual cellulosic
ethanol tax credit cap by a fraction, the numerator of which is
the amount of approved credit for the cellulosic ethanol producer
and the denominator of which is the total approved credit for all
cellulosic ethanol producers. The credit allowed shall be applied
both to the income tax imposed under KRS 141.020 or 141.040
and to the limited liability entity tax imposed under KRS 141.0401,
with the ordering of credits as provided in KRS 141.0205. Any
remaining cellulosic ethanol credit shall be disallowed and
shall not be carried forward to the next year. “Cellulosic ethanol
producer” is dened as an entity that uses cellulosic biomass
materials to manufacture cellulosic ethanol at a location in this
Commonwealth.
Line 17, Railroad Maintenance and Improvement Credit—The
railroad maintenance and improvement credit provided by KRS
141.385 is a nonrefundable credit that can be applied against
the taxes imposed by KRS 141.020, KRS 141.040 and KRS
141.0401. The tax credit shall be used in the tax year of the
qualied expenditures which generated the tax credit and cannot
be carried forward to a return for any other period.
An eligible taxpayer means the owner of a Class II or Class III
railroad located in Kentucky, the transporter of property using the
rail facilities of a Class II or III railroad in Kentucky, or any person
that furnishes railroad-related property or services to a Class II
or Class III railroad located in Kentucky. A copy of Schedule RR-I
must be enclosed with your return.
Line 18, Endow Kentucky Credit—Eective for taxable years
beginning on or after January 1, 2011, the Endow Kentucky
Tax Credit was created to encourage donations to community
foundations across the Commonwealth. KRS 141.438 was
created to allow a nonrefundable income tax and limited liability
entity tax credit of 20 percent of the value of the endowment gift,
not to exceed $10,000. You may need to reduce your Schedule A
contribution by the amount of the ENDOW credit. See instructions
for Schedule A.
A taxpayer shall enclose a copy of the approved Schedule
ENDOW to the tax return each year to claim the tax credit against
the taxes imposed by KRS 141.020 or 141.040 and 141.0401.
A partner, member or shareholder of a pass–through entity shall
enclose a copy of Schedule K–1, Form PTE to the partner’s,
member’s or shareholder’s tax return each year to claim the tax
credit.
Unused credit may be carried forward for use in a subsequent
taxable year, for a period not to exceed ve years.
Line 19, New Markets Development Program Tax Credit— A
taxpayer that makes a qualied equity investment in a qualied
community development entity may be eligible for a credit that
may be taken against the corporation income tax, individual
income tax, insurance premiums taxes and limited liability entity
tax. The qualied community development entity must rst submit
an application to the Department of Revenue for approval. The
person or entity actually making the loan or making the equity
investment will be able to claim a credit, subject to a $10 million
credit cap each scal year, by completing Form 8874(K)-A.
Line 20, Distilled Spirits Credit—Nonrefundable and
nontransferable distilled spirits ad valorem tax credit may be
claimed by income taxpayers who pay Kentucky property tax
on distilled spirits. If the taxpayer is a pass-through entity, such
as a partnership or limited liability company classied as a
par tnership for Kentucky income tax purposes, the taxpayer may
apply the credit against the LLET and pass the credit through to
its members, partners, or shareholders in the same proportion
as the distributive share of income or loss is passed through. For
taxable years beginning on or after January 1, 2019, the distilled
spirits credit is equal to one-hundred percent (100%) of the tax
assessed under KRS 132.160 and paid under KRS 132.180
on a timely basis. For more information, see KRS 141.389.
23
Line 21, Angel Investor Credit—Eective for taxable years
beginning on or after January 1, 2015, a nonrefundable
personal income tax credit is available under the Kentucky
angel investment credit program to individuals who invest a
minimum of $10,000 in certain Kentucky small businesses with
high-growth potential that are engaged in knowledge-based
activities, such as bioscience, environmental and energy
technology, health and human development, information
technology and communications, and materials science and
advanced manufacturing, that will further the establishment or
expansion of small businesses, create additional jobs, and foster
the development of new products and technologies.
The maximum amount of credit that may be claimed by a taxpayer
in any taxable year shall not exceed fty percent (50%) of the
total amount of credit awarded or transferred to the taxpayer.
Any amount of credit that a taxpayer is unable to utilize during
a taxable year may be carried forward for use in a succeeding
taxable year for a period not to exceed fteen (15) years. Any
amount of credit not used within fteen (15) years shall be lost.
No amount of credit may be carried back by any taxpayer. For
more information, see KRS 141.396.
Line 22, RESERVED
Line 23, Inventory Tax Credit—For taxable years beginning on
or after January 1, 2018, a nonrefundable and nontransferable
income tax credit is allowed against the taxes imposed by KRS
141.020 or 141.040 and 141.0401 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 thereafter.
KRS 141.408
Line 24, Renewable Chemical Production Tax Credit—
For taxable years beginning on or after January 1, 2021, and
ending on or before December 31, 2024, a nonrefundable and
nontransferable credit allowed against the taxes imposed by
KRS 141.020 or KRS 141.040 and KRS 141.0401 is available
for taxpayers that produce renewable chemicals. Preliminary
approval is obtained through the Department of Agriculture.
Schedule CHEM is due to the Department of Revenue by
March 1 each year. The Department of Revenue will issue
the credit certificate (Schedule CHEM) by April 15 each
year. The annual biodiesel, renewable diesel, and renewable
chemical production tax credit cap is $10,000,000 annually.
There is a carryforward of three (3) years for any unused
credit. The credit certicate must be attached to the tax return
claiming the credit per KRS 141.4231 and KRS 246.700(8).
SECTION B—PERSONAL TAX CREDITS
Complete this section only if you are 65 or over, blind or in the
Kentucky National Guard.
24
WORKSHEET FOR COMPUTATION OF MODIFIED GROSS INCOME FOR
FAMILY SIZE TAX CREDIT
(a) Enter your federal adjusted gross income from Form 740, page 1, line 5 (Form 740-NP, page 1, line 8).
If zero or less, enter zero ......................................................................................................................................... (a) ______________
(b) If married ling separate returns and living in the same household, enter your spouse’s
federal adjusted gross income from Form 740, page 1, line 5 (Form 740-NP, page 1, line 8). If zero or
less, enter zero ........................................................................................................................................................ (b) ______________
(c) Enter tax-exempt interest from municipal bonds (non-Kentucky) ............................................................................... (c) ______________
(d) Enter amount of lump-sum distributions not included in federal adjusted gross income
(federal Form 4972) .................................................................................................................................................... (d) ______________
(e) Enter total of lines (a), (b), (c) and (d) ......................................................................................................................... (e) ______________
(f) Enter your Kentucky adjusted gross income from Form 740, page 1, line 9 (Form 740-NP, page 1,
line 9). If zero or less, enter zero ............................................................................................................................ (f) ______________
(g) If married ling separate returns and living in the same household, enter your spouse’s
Kentucky adjusted gross income from Form 740, page 1, line 9 (Form 740-NP, page 1, line 9). If zero
or less, enter zero .................................................................................................................................................... (g) ______________
(h) Enter amount of lump-sum distributions not included in adjusted gross income (Kentucky
Form 4972-K) .............................................................................................................................................................. (h) ______________
(i) Enter total of lines (f), (g) and (h) ................................................................................................................................ (i) ______________
(j) Enter the greater of line (e) or (i). This is your Modied Gross Income.
Use this amount to determine if you qualify for the Family Size Tax Credit ................................................................ (j) ______________
SECTION C—FAMILY SIZE TAX CREDIT
Complete this section if you are: (1) single and have a family size greater than one; (2) married, ling separately on a combined return or
married, ling a joint return and have a family size greater than two; or (3) married ling separate returns and have a family size greater
than two.
You must enter each dependents’ name, Social Security number and relationship that qualify to be included in your family size.
Family Size—Consists of yourself, your spouse if married and living in the same household and qualifying children.
Family Size 1 is an individual either single, or married living apart from his or her spouse for the entire year. You may qualify for the
Family Size Tax Credit even if you are claimed as a dependent on your parent’s tax return.
Family Size 2 is an individual with one qualifying child or a married couple.
Family Size 3 is an individual with two qualifying children or a married couple with one qualifying child.
Family Size 4 is an individual with three or more qualifying children or a married couple with two or more qualifying children.
Qualifying Dependent Child—Means a qualifying child as dened in Internal Revenue Code Section 152(c), and includes a child who
lives in the household but cannot be claimed as a dependent if the provisions of Internal Revenue Code Section 152(e)(2) and 152(e)(4)
apply. In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:
Relationship—Must be the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a
descendant of one of these.
Residence—Has the same principal residence as the taxpayer for more than half the tax year. A qualifying child is determined without
regard to the exception for children of divorced or separated parents.
Age—Must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least ve months of
the year, or be permanently and totally disabled at any time during the year.
Support—Did not provide more than one-half of his/her own support for the year.
DETERMINE MODIFIED GROSS INCOME
Use worksheet to compute Modied Gross Income. Modied Gross Income along with your family size will be used to determine your
credit percentage on the Family Size Tax Table.
FAMILY SIZE TABLE
Once you have determined your family size and your Modied Gross Income, you will use the Family Size table located on the Schedule
ITC to determine your family size credit percentage.
Example 1: A taxpayer is ling single, has one qualifying dependent child and their Modied Gross Income is $21,450. This taxpayer has
a family size of two and would be entitled to a family size tax credit of 70% (.70).
Example 2: A taxpayer and spouse are ling married, ling a joint return and they have two qualifying dependent children and their
modied gross income is $31,000. They would have a family size of four and would be entitled to a family size tax credit of 90% (.90).
25
Instructions for Schedule M—Modications
to Federal Adjusted Gross Income
Additions to Federal Adjusted Gross Income
Line 1—Interest on securities issued by other states and their
political subdivisions is taxed by Kentucky and must be reported.
Also report dividends received from regulated investment
companies (mutual funds) that are taxable for Kentucky income
tax purposes. Note: Interest from securities of Kentucky and its
political subdivisions is exempt.
Line 2—Enter resident adjustment from Kentucky Schedule K-1.
Partners, beneciaries of estates and trusts and S corporation
shareholders, see Kentucky Schedule K-1 instructions.
Line 3—Enter total depreciation from federal Form 4562 if
you have elected to take the 30 percent or 50 percent special
depreciation allowance or the increased Section 179 deduction
for property placed in service after September 10, 2001. See line
12 for additional instructions.
Line 4—Enter federal net operating loss reported on Schedule
1, line 8 of 2023 federal Form 1040 or 1040–SR.
Line 5—Enter other additions to federal adjusted gross income
not listed above (enclose detailed schedule).
Include:
• Reservists and National Guard expenses reported on federal
Form 1040 or 1040–SR, Schedule 1, line 12;
• the portion of a lump-sum distribution on which you have
elected the 20 percent 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);
• dierences in pension (3-year recovery rule) and IRA bases;
• dierences in gains (losses) from the sale of intangible assets
amortized under the provisions of the Revenue Reconciliation
Act of 1993;
• dierences in gains (losses) from the sale of depreciable
property placed in service after September 10, 2001;
• moving expenses for members of the Armed Forces on federal
Form 1040 or 1040–SR, Schedule 1, line 14; and
• Kentucky excess business loss limitation (enclose Form
461-K).
Note: Before entering the dierence on line 5 you must take
into account any addition or subtraction aecting the at–risk
limitations. See instructions for line 14.
Excess Business Loss Limitation—Complete Form 461-K if
your net losses from your trades or businesses are more than
$289,000 ($578,000 for married taxpayer ling jointly or married
ling separately on a combined return). Enter amount from
Form 461-K, line 16. See form and instructions for additional
instructions. Please note this addition as “excess business loss.”
The Kentucky excess business loss will be added to your net
operating loss (NOL) carryforward.
Line 6, Total Additions—Add lines 1 through 5. Enter on line
6 and on Form 740, page 1, line 6.
Subtractions from Federal Adjusted Gross Income
Line 7—Enter the amount of taxable state income tax refund or
credit reported on your federal return and included as income
on Form 740, page 1, line 5.
Line 8—Enter interest income from U.S. government bonds and
securities. Do not include taxable interest from securities, such as
FNMA (Fannie Mae), GNMA (Ginnie Mae) and FHLMC (Freddie
Mac), which are merely guaranteed by the U.S. government.
26
Line 10—Enter Social Security and Social Security equivalent
U.S. Railroad Retirement Board benets included on Form 740,
page 1, line 5. These amounts are reported on federal Form
1040 or 1040–SR, line 6(b).
Line 11—Enter resident adjustment from Kentucky Schedule K-1.
Partners, beneciaries of estates and trusts and S corporation
shareholders, see Kentucky Schedule K-1 instructions. Subtract
the distributive share of net income from an S corporation subject
to the franchise tax imposed under KRS 136.505 or the capital
stock tax imposed under KRS 136.300.
Line 12—Depreciation, Section 179 Deduction and Gains/
Losses From Disposition of Assets—Important: Use Schedule
M, lines 3 and 12 only if you have elected for federal income
tax purposes to take the 30 percent or the 50 percent special
depreciation allowance or the increased Section 179 deduction
for property placed in service after September 10, 2001. A
copy of the federal Form 4562 if led for federal income tax
purposes must be submitted with Form 740 to verify that
no adjustments are required.
Reporting Depreciation and Section 179 Deduction
Dierences for Property Placed in Service After September
10, 2001
Create a Kentucky Form 4562 by entering Kentucky at
the top center of a federal Form 4562 above Depreciation
and Amortization. For property placed into service from
September 10, 2001 through December 31, 2019: In Part
I, line 1 enter the Kentucky limit of $25,000 and in Part I,
line 3 enter the Kentucky phaseout amount of $200,000. For
property placed into service on or after January 1, 2020:
in Part I, line 1, enter the Kentucky limit of $100,000 and the
phaseout threshold does not apply for purposes of determining
Kentucky depreciation. For property placed into service between
September 10, 2001 and December 31, 2019, the maximum
allowable IRC §179 deduction for Kentucky purposes is reduced
dollar–for–dollar by the amount by which the cost of qualifying
IRC §179 property placed in service during the year exceeds
the threshold. In determining the IRC §179 deduction for
Kentucky for property placed into service between September
10, 2001 and December 31, 2019, the income limitation on Line
11 should be determined by using Kentucky net income before
the IRC §179 deduction instead of federal taxable income.
In Part II, strikethrough and ignore line 14, Special depreciation
allowance for qualied property placed in service during the
tax year.
Use the created Kentucky Form 4562 to compute Kentucky
depreciation and Section 179 deduction in accordance with the
IRC in eect on December 31, 2001, for property placed into
Line 9, Pension Income Exclusion—The 2023 exclusion amount is 100 percent of taxable retirement benets or $31,110, whichever is
less. All pension and retirement income paid under a written retirement plan (qualied or unqualied) is eligible for exclusion. This includes
pensions, annuities, IRA accounts, 401(k) and similar deferred compensation plans, income received from converting a regular IRA to a
Roth IRA, death benets, disability retirement benets and other similar accounts or plans.
This exclusion is for each taxpayer and must be computed independently of your spouse who may be ling on the same return.
A taxpayer and spouse must complete and claim their own exclusion, regardless of ling status. Joint lers—Combine the separately
computed pension exclusion amounts and enter on Schedule M, Line 9, Column B.
Note: Kentucky follows the CARES Act provision, which allows coronavirus-related distributions, up to $100,000 received in tax year 2020, to
be included in gross income over a three year period. Coronavirus-related distributions that are included ratably in gross income over three
years for federal income tax purposes should also be included in gross income ratably over three years for Kentucky income tax purposes.
The taxpayer can exclude these distributions from gross income up to the $31,110 pension income exclusion for each of the three years.
Pension Income Exclusion Worksheet
Step 1.
(a) Enter taxable pension income reported on your federal Form 1040 or 1040–SR,
line 4(b) or 5(b) ............................................................................................................. (a)
(b) Enter disability retirement benets on Form 1040 or 1040–SR, line 1 ......................... (b)
(c) Enter deferred compensation reported on Form 1040 or 1040–SR, line 1 .................. (c)
(d) Add lines (a), (b) and (c) ............................................................................................... (d)
Step 2. Line (d) is $31,110 or less. Enter the amount from line (d) on Schedule M, line 9.
Step 3. Line (d) is more than $31,110. Do you have retirement income from the
federal government, the Commonwealth of Kentucky or a Kentucky local
government; or supplemental U.S. Railroad Retirement Board benets? ................................
Yes No Yes No
If you answered no, enter $31,110 on Schedule M, line 9.
If you answered yes, you must complete Schedule P to determine your pension
exclusion.
Column A Column B
Spouse Yourself
27
service from September 10, 2001 through December 31, 2019,
or the IRC in eect on December 31, 2003 for property placed
into service on or after January 1, 2020. Note: In determining
the Section 179 deduction for Kentucky the income limitation on
line 11 is Kentucky net income before the Section 179 deduction
instead of federal taxable income. Enclose the created
Kentucky Form 4562 to Form 740 and enter the amount of
Kentucky depreciation from line 22 on line 12.
Line 13, Enter Active Duty Military Pay—Enter active duty
military pay included on Form 740, page 1, line 5. All military
pay received by members of the Armed Forces while on active
duty can be excluded. Active duty is dened in KRS 141.175.
Line 14—Enter other subtractions from federal adjusted
gross income not listed above (enclose detailed schedule).
Include:
• income of precinct workers for election training or working at
election booths;
• capital gains on property taken by eminent domain;
• passive activity loss adjustment (see Form 8582-K and
instructions);
• income of a child reported on the parent’s return;
• artistic charitable contributions (if you do not itemize
deductions);
• at-risk limitations (see instructions below);
• qualified farm networking project differences per KRS
141.0101(15);
• dierences in the gains (losses) from the sale of intangible
assets amortized under the provisions of the Revenue
Reconciliation Act of 1993;
• dierences in gains (losses) from assets purchased after
September 10, 2001; and
• income of military personnel killed in the line of duty.
Determining and Reporting Dierences in Gain or Loss
From Disposition of Assets—If during the year you dispose
of assets placed in service after September 10, 2001, on which
the 30 percent or the 50 percent special depreciation allowance
or the increased Section 179 deduction was taken for federal
income tax purposes, you will need to determine and report the
dierence in the amount of gain or loss on the assets as follows:
Create a Kentucky form by entering Kentucky at the top center
of a federal Schedule D, federal Form 4797 and other applicable
federal forms. Compute Kentucky gain or loss from the disposed
assets using the Kentucky basis. Enter the dierence in federal
gain or loss and the Kentucky gain or loss on the appropriate line.
Enclose the created Kentucky Schedule D, Kentucky Form
4797 and other forms or schedules to support the deduction.
At-Risk Limitations—Federal/Kentucky income (loss)
differences may create different allowable losses due to
at-risk limitations. If you have amounts invested in an activity for
which you are not at risk and used federal Form 6198, At-Risk
Limitations, complete federal Form 6198 using Kentucky amounts
to determine if the Kentucky allowable loss diers from the
federal allowable loss. For a passive activity, use the Kentucky
allowable loss to complete Form 8582-K.
For all other activities
(nonpassive), enter the dierence as an “other addition” or “other
subtraction” on line 5 or line 14
.
Line 16, Kentucky Net Operating Loss—Enter Kentucky net
operating loss deduction from Schedule KNOL, Part II, Section
A, Line 8.
Net operating losses generated on or after January 1, 2018, are
limited to 80% of the Kentucky taxable income without regard to
the net operating loss, but any unused amounts are available for
carryforward indenitely. Schedule KNOL must be completed
if you are claiming a Kentucky net operating loss deduction on
Kentucky Schedule M. See Schedule KNOL instructions.
Note: If your net operating loss occurred in 2023, complete Part
I of Kentucky Schedule KNOL to determine the amount of loss
to be carried forward in any future years. Retain a copy for your
records and enclose a copy with your return.
Line 17, Total Subtractions—Add lines 15 and 16. Enter on
line 17 and on Form 740, page 1, line 8.
28
Instructions for Schedule A
Do not include on Schedule A items deducted elsewhere, such as on Schedule C, E, F or Kentucky Schedule M.
You may itemize your deductions for Kentucky even if you do not
itemize for federal purposes. Generally, if your deductions exceed
$2,980, it will benet you to itemize. If you do not itemize, you
may elect to take the standard deduction of $2,980.
Special Rules for Married Couples—If one spouse itemizes
deductions, the other must also itemize. Married couples ling
a joint federal return and who wish to le separate returns or a
combined return for Kentucky may: (a) le separate Schedules A
showing the specic deductions claimed by each, or (b) le one
Schedule A and divide the total deductions between them based
on the percentage of each spouse’s income to total income.
Lines 1 through 6—Interest Expense
You may deduct interest that you have paid during the taxable year
on a home mortgage. You may not deduct interest paid on credit
or charge card accounts, a life insurance loan, an automobile or
other consumer loan, delinquent taxes or on a personal note held
by a bank or individual.
Interest paid on business debts should be deducted as a business
expense on the appropriate business income schedule.
You may not deduct interest on an indebtedness of another person
when you are not legally liable for payment of the interest. Nor
may you deduct interest paid on a gambling debt or any other
nonenforceable obligation. Interest paid on money borrowed to
buy tax-exempt securities or single premium life insurance is
not deductible.
Line 1—List the interest and points (including “seller-paid points”)
paid on your home mortgage to nancial institutions and reported
to you on federal Form 1098.
Line 2—List other interest paid on your home mortgage and not
reported to you on federal Form 1098. Show name and address
of individual to whom interest was paid.
Line 3—List points (including “seller-paid points”) not reported to
you on federal Form 1098. Points (including loan origination fees)
charged only for the use of money and paid with funds other than
those obtained from the lender are deductible over the life of the
mortgage. However, points may be deducted in the year paid if all
three of the following apply: (1) the loan was used to buy, build
or improve your main home, and was secured by that home, (2)
the points did not exceed the points usually charged in the area
where the loan was made, and were gured as a percentage of
the loan amount, and (3) if the loan was used to buy or build
the home, you must have provided funds (see below) at least
equal to the points charged. If the loan was used to improve the
home, you must have paid the points with funds other than those
obtained from the lender.
Funds provided by you include down payments, escrow
deposits, earnest money applied at closing, and other amounts
actually paid at closing. They do not include amounts you
borrowed as part of the overall transaction.
Seller-Paid Points—If you are the buyer, you may be able to
deduct points the seller paid in 2023. You can do this if the loan
was used to buy your main home and the points meet item 2
above. You must reduce your basis in the home by those points,
even if you do not deduct them.
If you are the seller, you cannot deduct the points as interest.
Instead, include them as an expense of the sale.
This generally does not apply to points paid to renance your
mortgage. Federal rules apply. See federal Publication 936 for
more information.
Line 4
—RESERVED
.
Line 5, Interest on Investment Property—Investment interest
is interest paid on money you borrowed that is allocable to
property held for investment. It does not include any interest
allocable to a passive activity or to securities that generate tax-
exempt income.
Complete and enclose federal Form 4952, Investment Interest
Expense Deduction, to gure your deduction.
Exception. You do not have to le federal Form 4952 if all three
of the following apply:
(a) your investment interest is not more than your investment
income from interest and ordinary dividends,
(b) you have no other deductible investment expenses, and
(c) you have no disallowed investment interest expense from
2022.
29
Lines 7 through 11—Contributions
You may deduct what you actually gave to organizations that are
religious, charitable, educational, scientic or literary in purpose.
You may also deduct what you gave to organizations that work to
prevent cruelty to children or animals. In general, contributions
deductible for federal income tax purposes are also deductible
for Kentucky.
Examples of qualifying organizations are:
Churches, temples, synagogues, Salvation Army, Red Cross,
CARE, Goodwill Industries, United Way, Boy Scouts, Girl
Scouts, Boys and Girls Clubs of America, etc.
Fraternal orders if the gifts will be used for the purposes listed
above.
Veterans’ and certain cultural groups.
Nonprot schools, nonprot hospitals and medical research
organizations.
Federal, state and local governments if the gifts are solely for
public purposes.
If you contributed to a qualifying charitable organization and also
received a benet from it, you may deduct only the amount that
is more than the value of the benet you received.
Contributions You MAY Deduct
Contributions may be in cash, property or out-of-pocket expenses
you paid to do volunteer work for the kinds of organizations
described above. If you drove to and from the volunteer work, you
may take 14 cents a mile or the actual cost of gas and oil. Add
parking and tolls to the amount you claim under either method.
(Do not deduct any amounts that were repaid to you.)
Note: You are required to maintain receipts, cancelled checks
or other reliable written documentation showing the name of the
organization and the date and amount given to support claimed
deductions for charitable contributions.
Separate contributions of $250 or more require written
substantiation from the donee organization in addition to your
proof of payment. It is your responsibility to secure substantiation.
A letter or other documentation from the qualifying charitable
organization that acknowledges receipt of the contribution
and shows the date and amount constitutes a receipt. This
substantiation should be kept in your les. Do not send it
with your return.
See federal Publication 526 for special rules that apply if:
your total contributions exceed 60 percent of Kentucky
Adjusted Gross Income,
If a Kentucky Net Operating Loss Deduction (KNOLD) is
present, you must gure your Kentucky Adjusted Gross
income without the KNOLD before applying the 60%
limitation. 740, line 7 less Schedule M, line 15 equals your
Kentucky Adjusted Gross Income without KNOLD.
your total deduction for gifts of property is over $500,
you gave less than your entire interest in the property,
your cash contributions or contributions of ordinary income
property are more than 30 percent of your Kentucky Adjusted
Gross Income,
your gifts of capital gain property to certain organizations
are more than 20 percent of your Kentucky Adjusted Gross
Income, or
you gave gifts of property that increased in value, made bargain
sales to charity, or gave gifts of the use of property,
you expect to receive any state or local tax credit for a
contribution made.
You MAY NOT Deduct as Contributions
Travel expenses (including meals and lodging) while away from
home unless there was no signicant element of personal
pleasure, recreation or vacation in the travel.
Political contributions.
Dues, fees or bills paid to country clubs, lodges, fraternal
orders or similar groups.
Value of any benefit, such as food, entertainment or
merchandise that you received in connection with a
contribution to a charitable organization.
Cost of rae, bingo or lottery tickets.
Cost of tuition.
Value of your time or service.
Value of blood given to a blood bank.
The transfer of a future interest in tangible personal property
(generally, until the entire interest has been transferred).
Gifts to:
Individuals.
Foreign organizations.
Groups that are run for personal prot.
Groups whose purpose is to lobby for changes in the laws.
Civic leagues, social and sports clubs, labor unions and
chambers of commerce.
Contributions for which you receive any state or local tax
credit of more than 15% of the contribution.
Line 7—Enter all of your contributions paid by cash or check
(including out-of-pocket expenses).
Line 8—Enter your contributions of property. If you gave used
items, such as clothing or furniture, deduct their fair market
value at the time you gave them. Fair market value is what a
willing buyer would pay a willing seller when neither has to buy
or sell and both are aware of the conditions of the sale. If your
total deduction for gifts of property is more than $500, you must
complete and enclose federal Form 8283, Noncash Charitable
Contributions. If your total deduction is over $5,000, you may also
have to obtain appraisals of the values of the donated property.
See federal Form 8283 and its instructions for details.
30
Also include the value of a leasehold interest property contributed
to a charitable organization to provide temporary housing for the
homeless. Enclose Schedule HH.
Recordkeeping—If you gave property, you should keep a receipt
or written statement from the organization you gave the property
to, or a reliable written record, that shows the organization’s name
and address, the date and location of the gift and a description
of the property. You should also keep reliable written records for
each gift of property that include the following information:
(a) How you gured the property’s value at the time you gave
it. (If the value was determined by an appraisal, you should
also keep a signed copy of the appraisal.)
(b) The cost or other basis of the property if you must reduce it by
any ordinary income or capital gain that would have resulted
if the property had been sold at its fair market value.
(c) How you gured your deduction if you chose to reduce your
deduction for gifts of capital gain property.
(d) Any conditions attached to the gift.
(e) If the gift was a “qualied conservation contribution” under
IRC Section 170(h), the fair market value of the underlying
property before and after the gift, the type of legal interest
donated and the conservation purpose furthered by the gift.
Line 9—Enter artistic charitable contributions. A deduction is
allowed for “qualied artistic charitable contributions” of any
literary, musical, artistic or scholarly composition, letter or
memorandum, or similar property.
An amount equal to the fair market value of the property on
the date contributed is allowable as a deduction. However,
the deduction is limited to the amount of the taxpayer’s artistic
adjusted gross income for the taxable year.
The following requirements for a deduction must be met:
(a) The property must have been created by the personal
eorts of the taxpayer at least one year prior to the date
contributed. The creation of this property cannot be related
to the performance of duties while an ocer or employee of
the United States, any state or political subdivision thereof.
(b) A written appraisal of the fair market value of the contributed
property must be made by a qualied independent appraiser
within one year of the date of the contribution. A copy of the
appraisal must be enclosed with the tax return.
(c) The contribution must be made to a qualied organization
as described in this section.
Line 10—Enter any carryover of contributions that you were not
able to deduct in an earlier year because they exceeded your
adjusted gross income limit. See federal Publication 526 for
details on how to gure your carryover.
Line 12, Gambling Losses—You may deduct gambling losses to
the extent of your winnings reported on Form 1040 or 1040-SR,
Schedule 1, line 8(b).
Line 13—Other Miscellaneous Deductions
Use this line to report miscellaneous deductions. Only the
expenses listed below can be deducted on line 13.
Federal estate tax on income in respect of a decedent.
Amortizable bond premium on bonds acquired before October
23, 1986.
Deduction for repayment of amounts under a claim of right if
more than $3,000. See federal Publication 525.
Unrecovered investment in a pension.
List the type and amount of each expense. Enter one total on
line 13. For more information on these expenses, see federal
Publication 529.
Line 15—Total Itemized Deductions
Dividing Deductions Between Spouses—Married taxpayers
who are ling separate returns or a combined return but using
only one Schedule A must divide the itemized deductions.
Complete lines 16 through 20. If one spouse is not required to
le a Kentucky return, total deductions may be divided between
them based on the percentage of each spouse’s income to total
income or separate Schedules A may be led.
31
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32
Instructions for Form 2210-K
General Instructions
Purpose of Form—To determine if you owe an underpayment of
estimated tax penalty.
Who Must File Form 2210–K—In general, you may owe a
penalty for 2023 if you owe more than $500 and if the total of your
withholding and timely estimated tax payments didn’t equal at least
the smaller of:
1. 90% of your 2023 tax , or
2. 100% of your 2022 tax. Your 2022 tax return must cover
a 12–month period.
Special rules for certain individuals—Dierent percentages
are used for farmers and shermen, and certain higher income
taxpayers.
Farmers and shermen—If at least two-thirds of your Kentucky
gross income for 2022 or 2023 is from farming and shing,
substitute 66 2/3% for 90% in (1) above. See federal Form 2210
instructions.
Higher income taxpayers—If your Kentucky adjusted gross
income for 2022 was more than $150,000 ($75,000 if your Kentucky
2022 ling status was married ling separately on a combined
return or separate returns), substitute 110% for 100% in (2) above.
Part I—Exceptions to the Penalty—You may not owe a penalty
if one of the exceptions below are met. If you meet one or more
of the exceptions, check the appropriate box(es), complete the
lines associated with the exception and check the “Form 2210-K
attached” box on form 740, line 34(a) (Form 740-NP, line 34(a)). If
none of the exceptions apply, go to Part II.
Exceptions:
• You had no liability for 2022, you were a U.S. Citizen or
resident alien for the entire year (or an estate of a domestic
decedent or a domestic trust), and your 2022 tax return (or
would have been required to le) was for a full 12 months.
• The tax shown on the 2023 return minus the amount of tax you
paid through withholding, estimated payments, and refundable
credits is less than $500.
• Your gross income from farming or shing is at least two-thirds
of your annual gross income from all sources for 2022 or 2023
and you paid the entire tax due by March 1, 2024.
• You’re ling a decedent’s estate return for any tax year ending
before the date that is two years after the decedent’s death.
• You’re ling a trust return for a trust that was owned by a
decedent for any tax year ending before the date that is two
years after the decedent’s death.
Part II—Required Annual Payment
Lines 1–8—This section is used to calculate your required annual
payment. The required annual payment is used to calculate the
amount of payment that you should have made each quarter. The
required annual payment is the lesser of: (1) 90% of your income
tax liability after refundable credits are applied or (2) 100% of the
tax shown on your 2022 tax return (2022 Form 740 or Form 740-
NP, page 1, line 26 or Form 741, line 20). Higher income taxpayers
see instructions above.
Line 9—Multiply line 8 by 25 percent (.25) and enter in columns
A through D, or if you used the annualized income installment
method in Part III, enter the amount from Part III, line 20 into the
appropriate columns. To use the annualized income installment
method complete Part III.
Line 10—Enter the sum of estimated tax payments made and
Kentucky withholding for each quarter. If you have Kentucky
income tax withheld, multiply the total by 25 percent (.25) and enter
in columns A through D. If you had a credit forward from a prior year
return, enter the total amount in column A only.
Note: Complete lines 11 through 18 for column A before going to
column B, etc.
Line 11—Enter amount from line 18 of the previous column. This
amount should be the overpayment if any from the previous column.
Line 13—Enter amount from line 17 of the previous column. This
amount should be the underpayment amount from the previous
column that will be carried over to each column until the payment
is made.
Line 17—This is the underpayment amount for that column and
any underpayment from the previous columns. The underpayment
will continue to carryover to the next column until the payment is
made or the due date, whichever is earlier.
Figuring the Penalty—The penalty will be calculated on each
underpayment in each column from the payment due date written
above line 9 to the date on line 19 or the date the payment was
made, whichever is earlier. The underpayments will carryover to
the next column and be added to that columns underpayment to
calculate the penalty on that balance.
Line 19—Use this date to calculate the number of days that
the current interest amount will be based upon, unless the
underpayment was paid prior to this date.
Line 20—This is the number of days from the payment due date
shown above line 9 to the date the amount on line 17 was paid
or the date shown on line 19 for the column in which you are
calculating penalty.
For example, if your underpayment on line 17 for column A is
$1,000, you would calculate the penalty from 4-15-23 to 6-15-23
and enter 61 days on line 20. If this $1,000 remains unpaid, it
will be added to any underpayment in column B and you would
calculate interest from 6-15-23 until 9-15-23 which would be 92
days for that period, etc.
Line 21—The annual percentage rate is established by the
Department of Revenue for each calendar year. The percentage
rate for calendar years 2023 is 8 percent and 2024 is 11 percent.
The penalty calculation for the required third installment payment
may be calculated using two dierent rates.
Part III—Annualized Income Installment Method
If your income varied during the year you may be able to lower
or eliminate the amount of one or more required installments by
using the annualized income installment method. For example,
you operated your business on a seasonal basis or you had a
large capital gain late in the year. Note: If you use Part III for any
payment due dates, you must use it for all payment due dates.
Line 1—For each period (column), gure your total income minus
your adjustments to income. Include your share of partnership or S
corporation income or loss items for the period.
Line 2—Estates and trusts don’t use the amounts shown in
columns (a) through (d). See Federal instructions.
Line 6—If you itemized deductions, multiply line 4 of each column
by line 5 and enter the result on line 6.
Line 7—Enter the standard deduction amount of $2,980.
Line 10—Form 740 or 740-NP lers, enter -0- in each column.
Estates and trusts see federal instructions.
33
Instructions for Form 8863-K
Purpose of Form—Use Form 8863-K to calculate and claim your
2023 education tuition tax credits. The education credits are: the
American Opportunity Credit and the Lifetime Learning Credit.
These credits are based on qualied undergraduate education
expenses paid to an eligible postsecondary educational institution
located in Kentucky. If you elected to claim the education credit for
federal purposes rather than the tuition and fees deduction, you
must make that same election for Kentucky purposes.
Part I, Qualications—All questions in Part I must be answered
“Yes” to be eligible to claim the Kentucky education tuition tax
credit.
Qualied Education Expenses—See the federal instructions to
determine the qualied expenses for the American Opportunity
Credit and the Lifetime Learning Credit. The allowable expenses
may be dierent for each credit.
Eligible Educational Institution located in Kentucky—An
eligible educational institution is generally any accredited public,
nonprot, or private college, university, vocational school, or
other postsecondary institution. The institution must be eligible
to participate in a student aid program administered by the
Department of Education. The institution attended must be
physically located in Kentucky to qualify.
Part II, American Opportunity Credit—You must enter the
student’s name and Social Security number, the name and
address of the Kentucky institution, and the qualied expenses.
Use the federal instructions to determine if each student meets the
qualications. For Kentucky, the credit is limited to 25% of the
allowable federal credit with a maximum amount allowed of
$625 for each qualifying student.
Part III, Lifetime Learning Credit—You must enter the student’s
name and Social Security number, the name and address of the
Kentucky institution, and the qualied expenses. Use the federal
instructions to determine if each student meets the qualications.
For Kentucky, the credit is limited to 25% of the allowable
federal credit with a maximum allowed of $500 per return.
Part IV, Allowable Education Credits—
Line 12—Multiply line 11 by 25% (.25). This is your tentative
Kentucky allowable credit.
Line 13—Enter the tentative tax from Form 740 or Form 740-NP,
line 22.
Line 14—Enter the amount from page 3, Part V, line 34. This is
the allowable credit carryforward from prior year(s). If there is no
carryforward, enter zero.
Line 15—Subtract line 14 from line 13.
Line 16—Enter the smaller of line 15 or line 12.
Line 17—Add lines 14 and 16. Enter here and on Form 740 or
Form 740–NP, line 23. This is your allowable 2023 education
credit.
Line 18—If line 15 is smaller than line 12, subtract line 15 from line
12. This is the amount of unused credit carryforward from 2023 to
2024. Maintain records for following years.
Part V, Credit Carryforward from Prior Years—The Kentucky
education tuition tax credit can be carried forward for up to 5
years if unused during the preceding tax year(s). You must have
completed Form 8863–K for any prior year(s) in which you are
claiming a credit carryforward.
34
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35
YOUR RIGHTS
AS A KENTUCKY TAXPAYER
As part of the Finance and Administration Cabinet, the mission of
the Kentucky Department of Revenue (DOR) is to administer tax
laws, collect revenue, and provide services in a fair, courteous,
DQGHႈFLHQW PDQQHUIRUWKH EHQH¿WRIWKH&RPPRQZHDOWKDQG
its citizens.
As a Kentucky taxpayer, you have the right to expect the DOR to
honor its mission and uphold your rights every time you contact
or are contacted by the DOR.
6RPH.HQWXFN\WD[SD\HUULJKWVDUHYHU\VSHFL¿FVXFKDVZKHQ
and how to protest a Notice of Tax Due or the denial of a refund.
Others are more general.
The following is a summary of your rights and the DOR’s
responsibilities to you as a Kentucky taxpayer.
RIGHTS OF TAXPAYER
Privacy
You have the right to privacy with regard to information you provide
SHUWDLQLQJWRUHWXUQVUHSRUWVRUWKHDႇDLUVRI\RXUEXVLQHVV
Assistance
You have the right to advice and assistance from the DOR in
complying with state tax laws.
Explanation
You have the right to a clear and concise explanation of:
9 basis of assessment of additional taxes, interest and penalties,
or the denial or reduction of any refund or credit claim;
9 procedure for protest and appeal of a Notice of Tax Due,
a reduction or denial of a refund, or a denial of a request
IRU DGGLWLRQDO WLPH WR ¿OH D VXSSRUWLQJ VWDWHPHQW DQG
9 tax laws and changes in tax laws so that you can comply with
the law.
Protest and Appeal
<RXK DYHW K H U LJK W W R ¿ O HD S UR W H VW ZL WKWK H ' 2 5LI\R X G L V DJ UH HZLWK
a Notice of Tax Due, a reduction or denial of a refund, or a denial
RIDUHTXHVWIRUDGGLWLRQDOWLPHWR¿OHDVXSSRUWLQJVWDWHPHQW,I\ R X
¿OHDWLPHO\SURWHVW\RXKDYHDULJKWWRDFRQIHUHQFHWRGLVFXVV
WKH PDWWHU ,I \RX DUH QRW VDWLV¿HG ZLWK WKH 'HSDUWPHQW¶V ¿QDO
UXOLQJIROORZLQJ\RXUSURWHVW\RXPD\DSSHDOWKH¿QDOUXOLQJWRWKH
Kentucky Board of Tax Appeals, pursuant to KRS 131.110(5) and
.56HWVHT6HHUHYHUVHIRUSURFHGXUHWR¿OHDSURWHVW
Representation
You have the right to representation by your authorized agent
(attorney, accountant, or other person) in any hearing or conference
with the DOR. You have the right to be informed of this right prior
WRWKHFRQIHUHQFHRUKHDULQJ,I\RXLQWHQGIRU\RXUUHSUHVHQWDWLYH
to attend the conference or hearing in your place, you will be
required to give your representative a power of attorney before
the DOR can discuss tax matters with your authorized agent. See
Form 20A100.
Recordings
You have the right to make an audio recording of any meeting,
conference, or hearing with the DOR. The DOR has the right to
PDNHDQDXGLRUHFRUGLQJLI\RXDUHQRWL¿HGLQZULWLQJLQDGYDQFH
or if you make a recording. You have the right to receive a copy
of the recording.
Consideration
You have the right to consideration of:
9 waiver of penalties or collection fees if “reasonable cause” for
UHGXFWLRQRUZDLYHULVJLYHQ³UHDVRQDEOHFDXVH´LVGH¿QHGLQ
KRS 131.010(9) as: “an event, happening, or circumstance
entirely beyond the knowledge or control of a taxpayer who
KDV H[HU F LVH G G X HF DU H D Q GS UX G H QF H L QW KH ¿OLQ J R I D UH W XU QR U
report or the payment of monies due the department pursuant
to law or administrative regulation”);
9 installment payments of delinquent taxes, interest, and
penalties;
9 waiver of interest and penalties, but not taxes, resulting from
incorrect written advice from the DOR if all facts were given
and the law did not change or the courts did not issue a ruling
to the contrary;
9 H[WHQVLRQRIWLPHIRU¿OLQJUHSRUWVRUUHWXUQVDQG
9 SD\PHQWRIFKDUJHVLQFXUUHGUHVXOWLQJIURPDQHUURQHRXV¿OLQJ
of a lien or levy by the DOR.
Guarantee
You have the right to a guarantee that DOR employees are not paid,
evaluated, or promoted based on taxes assessed or collected, or a
tax assessment or collection quota or goal imposed or suggested.
Damages
<RXKDYHWKHULJKWWR¿OHDFODLPIRUDFWXDODQGGLUHFWPRQHWDU\
damages with the Kentucky Board of Tax Appeals if a DOR
employee willfully, recklessly, and intentionally disregards your
rights as a Kentucky taxpayer.
Interest
You may have the right to receive interest on an overpayment of tax.
DEPARTMENT OF REVENUE RESPONSIBILITIES
The DOR has the responsibility to:
9 perform audits and conduct conferences and hearings with
you at reasonable times and places;
9 authorize, require, or conduct an investigation or surveillance
of you only if it relates to a tax matter;
9 make a written request for payment of delinquent taxes which
are due and payable at least 30 days prior to seizure and sale
of your assets;
9 conduct educational and informational programs to help you
understand and comply with the laws;
9 publish clear and simple statements to explain tax procedures,
remedies, your rights and obligations, and the rights and
obligations of the DOR;
9 notify you in writing when an erroneous lien or levy is released
and, if requested, notify major credit reporting companies in
FRXQWLHVZKHUHOLHQZDV¿OHG
2023
36
9 advise you of procedures, remedies, and your rights and
obligations with an original notice of audit or when an original
Notice of Tax Due is issued, a refund or credit is denied or
reduced, or whenever a license or permit is denied, revoked,
or canceled;
9 QRWLI\\RXLQZULWLQJSULRUWRWHUPLQDWLRQRUPRGL¿FDWLRQRID
payment agreement;
9 furnish copies of the agent’s audit workpapers and a written
narrative explaining the reason(s) for the assessment;
9 resolve tax controversies on a fair and equitable basis at the
administrative level whenever possible;
9 notify you in writing at your last known address at least 60 days
prior to publishing your name on a list of delinquent taxpayers
IRUZKLFKDWD[RUMXGJPHQWOLHQKDVEHHQ¿OHGDQG
9 QRWLI\\RXE\FHUWL¿HGPDLOGD\VSULRUWRVXEPLWWLQJ\RXU
name to the relevant agency for the revocation or denial
of professional license, driver’s license, or motor vehicle
registration.
PROTEST AND APPEAL PROCEDURE
Protest
,I\RXUHFHLYHD1RWLFHRI7D['XHRULIWKH'25QRWL¿HV\RXWKDW
a tax refund has been reduced or denied, or the DOR denies your
UHTXHVWIRUDGGLWLRQDOWLPHWR¿OHDVXSSRUWLQJVWDWHPHQW\RXKDYH
the right to protest. To do so:
9 submit a written protest within 60 days from the original
notice date (or 45 days if the original notice date is prior to
07/01/2018); notice of refund reduction or denial, or denial of
DUHTXHVWIRUDGGLWLRQDOWLPHWR¿OHDVXSSRUWLQJVWDWHPHQW
9 identify the type of tax involved and give the account number,
6RFLDO6HFXULW\QXPEHURURWKHULGHQWL¿FDWLRQQXPEHUDQG
attach a copy of the DOR Notice of Tax Due or refund denial
to support that your protest is timely;
9 explain why you disagree;
9 attach any proof or documentation available to support your
protest or request additional time to support your protest;
9 sign your statement, include your daytime telephone number
and mailing address; and
9 mail to the Kentucky Department of Revenue,
Frankfort, Kentucky 40620.
Conference
You have the right to request a conference to discuss the issue.
Final Ruling
,I\RXGRQRWZDQWWRKDYHDFRQIHUHQFHRULIWKHFRQIHUHQFHGLG
QRWUHVROYH\RXUSURWHVW\RXKDYHWKHULJKWWRUHTXHVWD¿QDOUXOLQJ
of the DOR so that you can appeal your case further.
Appeal
,I \RX GR QRW DJUHH ZLWK WKH '25¶V ¿QDO UXOLQJ \RX FDQ ¿OH D
ZULWWHQDSSHDOZLWKWKH.HQWXFN\%RDUGRI7D[$SSHDOV,I\RXGR
not agree with the decision of the Kentucky Board of Tax Appeals,
you have the right to appeal their ruling to the Kentucky courts
¿UVWWRWKHFLUFXLWFRXUWLQ\RXUKRPHFRXQW\RULQ)UDQNOLQ&RXQW\
WKHQWRWKH.HQWXFN\&RXU WRI$SSHDOVDQG¿QDOO\WRWKH.HQWXFN\
Supreme Court).
NOTE: The above protest and appeal procedures do not apply
for real property which is valued by the local property valuation
administrator (PVA). Contact the local PVA for information about
how to appeal the valuation of real property.
TAXPAYER OMBUDSMAN
The DOR has a Taxpayer Ombudsman whose job is to serve as
an advocate for taxpayers’ rights. One of the main functions of the
Ombudsman is to ensure that your rights as a Kentucky taxpayer
are protected.
Also, an important function of the Taxpayer Ombudsman is to
FRQIHUZLWK'25HPSOR\HHVZKHQ\RXKDYHDSUREOHPRUFRQÀLFW
that you have been unable to resolve. However, it is not the role of
the Ombudsman to intercede in an audit, handle a protest, waive
taxes, penalty or interest, or answer technical tax questions. To
¿OHDSURWHVWVHH3527(67$1'$33($/352&('85(3OHDVH
do not mail your protest to the Ombudsman.
The Taxpayer Ombudsman is your advocate and is there to make
VXUH\RXUULJKWVDUHSURWHFWHG,I\RXWKLQN\RXDUHQRWEHLQJWUHDWHG
fairly or if you have a problem or complaint, please contact the
Ombudsman for assistance.
The Taxpayer Ombudsman may be contacted by telephone at
502–564–7822 (between 8:00 a.m. and 5:00 p.m. weekdays). The
mailing address is: Department of Revenue, Taxpayer Ombudsman,
501 High Street, Station 1, Frankfort, Kentucky 40601.
WHERE TO GET ASSISTANCE
7KH'25KDVRႈFHVLQ)UDQNIRUWDQGWD[SD\HUVHUYLFHFHQWHUV
in nine cities and towns throughout Kentucky. DOR employees in
the service centers answer tax questions and provide assistance.
You may obtain assistance by contacting any of the following:
Ashland Taxpayer Service Center
1539 Greenup Avenue, 41101–7695
606–920–2037
Bowling Green Taxpayer Service Center
201 West Professional Park Court, 42104–3278
270–746 –7470
Corbin Taxpayer Service Center
1RUWK86(6XLWH±
606–528–3322
Frankfort Taxpayer Service Center
501 High Street, 40601–2103
502–564–5930
Hopkinsville Taxpayer Service Center
181 Hammond Drive, 42240–7926
270–889–6521
Louisville Taxpayer Service Center
600 West Cedar Street, 2nd Floor West, 40202–2310
502–595–4512
Northern Kentucky Taxpayer Service Center
7XUIZD\5LGJH2ႈFH3DUN
7310 Turfway Road, Suite 190
Florence 41042–4871
859–371– 9049
Owensboro Taxpayer Service Center
401 Frederica Street, Building C, Suite 201, 42301–6295
270–687–7301
Paducah Taxpayer Service Center
Clark Business Complex, Suite G
2928 Park Avenue, 42001–4024
270–575–7148
Pikeville Taxpayer Service Center
8QLSOH[&HQWHU7ULYHWWH'ULYH6XLWH±
606–433–7675
* * * * * * * * * *
The DOR has an online taxpayer service center where you can
download forms, publications, and obtain general information about
the department. The address is www.revenue.ky.gov.
The information in this brochure merely summarizes your rights as
a Kentucky taxpayer and the responsibilities of the Department of
Revenue. The Kentucky Taxpayers’ Bill of Rights may be found in
the Kentucky Revised Statutes (KRS) at Chapter 131.041-131.083.
Additional rights and responsibilities are provided for in KRS
131.020, 131.110, 131.170, 131.1817, 131.183, 131.190, 131.500,
131.654, 133.120, 133.130, 134.580, and 134.590.
Printing costs paid from state funds.
Commonwealth of Kentucky
DEPARTMENT OF REVENUE
10F100 (2023)
The Kentucky Department of Revenue does not discriminate on the
basis of race, color, national origin, sex, age, religion, disability, sexual
orientation, gender identity, veteran status, genetic information or
ancestry in employment or the provision of services.
Electronic Filing
It’s fast, it’s easy, it’s simply the best way to le…..
Free File options
• Many taxpayers are eligible to e-le using free commercial online tax preparation software.
• Visit revenue.ky.gov and click on “Free File for Taxpayers.”
It’s fast, easy and convenient.
• Faster refund.
• Direct deposit and receive your refund even faster. Direct deposit is available only through
e-le.
• Sign your return electronically and le a completely paperless return.
• Get an electronic acknowledgment that the Department of Revenue has received your return.
• Schedule debit dates for estimate tax payments and pay any additional income tax owed by using
direct debit. Direct debit is not available on paper led returns.
• Prepare and le your federal and state returns at the same time.
• File from the comfort of your home 24 hours a day, 7 days a week.
It’s accurate and secure.
• Approved software ensures more accurate returns due to edits within the program.
• Department of Revenue computers quickly and automatically process return information.
• IRS/Kentucky e-le meets or exceeds all government security standards.
• Over 90% of Kentucky taxpayers chose e-le in 2023.
