(1) "Corporation" means a corporation as defined by KRS 141.010(4), a limited liability company taxed as a corporation, or other entity taxed as a corporation for Kentucky income tax purposes. (2) "Date prescribed by KRS 141.160" means the 15th day of the fourth month following the close of the taxable year. (3) "Fiduciary" is defined by KRS 141.010(10). (4) "General partnership" is a partnership composed of only general partners, who are personally liable for the partnership debts. (5) "Pass-through entity" has the same meaning as KRS 141.010(22).

Tax Return. (1) Pursuant to KRS 131.081(11) and 141.170, a taxpayer may obtain an extension of time for filing a Kentucky individual, fiduciary, or general partnership tax return by means of either a federal extension or a Kentucky extension. (2) Federal extension. (a) A taxpayer granted an extension of time for filing a federal income tax return shall be granted the same extension of the due date for filing a Kentucky tax return for the same taxable year. A copy of the federal extension approval or the request for an automatic extension shall be attached to the Kentucky tax return when it is filed if the taxpayer is relying upon the federal extension to extend the due date. (b) An extension of time for filing a Kentucky tax return granted pursuant to this subsection shall be valid for the extension period granted by the Internal Revenue Service. (c) A copy of the federal extension shall not be mailed to the department separate from the Kentucky tax return. (3) Kentucky extension. A taxpayer may file an application for extension with the department, on or before the date prescribed by KRS 141.160 for filing the return. An individual, general partnership, or fiduciary shall file Form 740EXT "Application for Extension of Time to File", Revenue Form 40A102. (a) An individual, general partnership, or fiduciary shall state the reason for the request on the application for extension. The inability to pay shall not be a valid reason. (b) An individual, general partnership, or fiduciary shall be notified by mail if the application for extension is denied. A copy of an approved application for extension shall not be returned to the taxpayer. (c) In accordance with KRS 141.170, an individual, general partnership, or fiduciary be granted an extension of time to file for six (6) months unless the application is denied. (d) In accordance with KRS 141.170, an individual outside the United States shall be granted an extension of time to file for twelve (12) months unless the application is denied. (e) A copy of the signed and dated application for extension shall be attached to the tax return when it is filed.

Entity Income or Limited Liability Entity Tax Return. (1) Pursuant to KRS 131.081(11) and 141.170, a taxpayer may obtain an extension of time for filing a Kentucky corporation, S-corporation, or pass-through entity income or limited liability entity tax return by means of either a federal extension or a Kentucky extension. (2) Federal extension. (a) A taxpayer granted an extension of time for filing a federal income tax return shall be granted the same extension of the due date, except as otherwise provided in KRS 141.170(2), for filing a Kentucky income or limited liability entity tax return for the same taxable year. A copy of the federal extension approval or the request for an automatic extension shall be attached to the Kentucky income or limited liability entity tax return when it is filed if the taxpayer is relying upon the federal extension to extend the due date. (b) An extension of time for filing a Kentucky income or limited liability entity tax return granted pursuant to this subsection shall be valid for the extension period granted by the Internal Revenue Service, except as otherwise provided in KRS 141.170(2). (c) A copy of the federal extension shall not be mailed to the department separate from the Kentucky tax return. (3) Kentucky extension. A taxpayer may file an application for extension with the department, on or before the date prescribed by KRS 141.160 for filing the return. A corporation, S-corporation, or pass-through entity shall file Form 720EXT "Extension of Time to File Kentucky Corporation/LLET Return", Revenue Form 41A720SL. (a) A corporation shall be granted an extension of time to file for seven (7) months pursuant to KRS 141.170(2). (b) A pass-through entity or S-corporation shall be granted an extension of time to file for six (6) months. (c) A copy of an approved application for extension shall not be returned to the corporation, S-corporation, or pass-through entity. (d) The extension shall become valid when mailed to the department on or before the date prescribed by KRS 141.160 for filing the return. (e) The corporation, S-corporation or pass-through entity shall attach a copy of the signed and dated application for extension to its Kentucky income tax or limited liability entity tax return when it is filed. (4) An extension of time for filing a unitary combined or elective consolidated income and limited liability entity tax return shall constitute an extension of time for filing each member of the group. (5) An extension of time for filing a corporation income tax return shall constitute an extension of time for filing a limited liability entity tax return for the same taxable year.

(1) An extension of time to file an income or limited liability entity tax return shall not constitute an extension to pay the tax. (2) A taxpayer shall determine if an amount of tax remains unpaid on or before the date prescribed by KRS 141.160 for filing the return. (3) If tax remains unpaid, a payment for the amount of the unpaid tax shall be submitted to the department on or before the date prescribed by KRS 141.160 for filing the return along with the Kentucky extension. (4) A group filing a unitary or elective consolidated income and limited liability entity tax return and making a payment of tax with the application for extension shall file a Kentucky extension to ensure proper processing of payments.

(1) Statutory interest shall be paid from the date prescribed by KRS 141.160 for filing the return until the tax is paid. (2) If the envelope bearing the return is postmarked on or before the filing date, the late filing penalty prescribe by 131.180 shall not apply.

applicable copyright law, from 8:00 a.m. until 4:30 p.m. at the Kentucky Department of Revenue, 501 High Street, Frankfort, Kentucky 40601, on the department Web site at http://revenue.ky.gov, or at a Kentucky Department of Revenue Taxpayer Service Center during their hours of operation. (IG-5-1; 1 Ky.R. 328; eff. 2-5-1975; 9 Ky.R. 1151; eff. 5-4-1983; 13 Ky.R. 26; eff. 8-12- 1986; 24 Ky.R. 388; 853; eff. 9-25-1997; 44 Ky.R. 1089, 1493; eff. 2-2-2018; 45 Ky.R.1057, 1513; eff. 1-4-2019; 45 Ky.R. 3445, 46 Ky.R. 865, eff. 10-4-2019.)

(1) "Applicant" means an ethanol producer that files a tax credit claim as provided by KRS 141.4242. (2) "Application" or "Schedule ETH" means the Schedule ETH, Application, and Credit Certificate of Income Tax/LLET Credit Ethanol (Revenue Form 41A720ETH) that is used to make an ethanol tax credit claim with the department for gallons of ethanol produced in this state as provided by KRS 141.4242(3). (3) "ASTM" means the American Society for Testing and Materials. (4) "Corporation" is defined by KRS 141.010(4). (5) "Department" is defined by KRS 141.010(5). (6) "Ethanol" is defined by KRS 141.422(9). (7) "Ethanol producer" is defined by KRS 141.422(11). (8) "Identification number" means: (a) Social Security number for individuals; (b) Federal Employer Identification Number for general partnerships, estates, and trusts; and (c) Kentucky corporation income tax and limited liability entity tax account number for corporations and limited liability pass-through entities. (9) "Individual" is defined by KRS 141.010(13). (10) "Limited liability pass-through entity" is defined by KRS 141.010(15). (11) "Pass-through entity" is defined by KRS 141.010(21). (12) "Tax credit" means the ethanol tax credit authorized by KRS 141.4242 and 141.4246.

completed application on or before January 15 for the preceding calendar year.

(1) An ethanol producer shall provide proof that the ethanol gallons reported on the application meet ASTM standard specification D4806 for ethanol. (2) Proof submitted by an ethanol producer shall be in the form of documentation of laboratory results that certify that the ethanol reported on the Schedule ETH meets the ASTM standard specification. (3) An independent ASTM certified laboratory shall be used to generate the laboratory results that are required by this section. (4) Failure to submit documented laboratory results that certify that the ethanol meets the ASTM standard specification with the Schedule ETH shall result in the department disallowing the credit. (5) (a) An ethanol producer shall have the ethanol tested as provided by subsection (2) of this section on July 1 and December 31 of each calendar year to determine if the ethanol meets the ASTM standard specification. (b) A copy of the laboratory results for July 1 and December 31 of each calendar year shall be attached to the application, Schedule ETH, submitted to the department as provided by Section 2 of this administrative regulation. (c) Failure to provide proof of meeting the ASTM standard specification on July 1 and December 31 of each calendar year with the application shall result in the denial of the credit for gallons of ethanol back to the previous testing date of July 1 or December 31. (d) If proof is timely submitted and the proof certifies that the ethanol does not meet the ASTM standard specification, then all credit claimed for gallons of ethanol back to the previous testing date of July 1 or December 31 shall be disallowed.

(1) An applicant claiming the tax credit shall attach the credit certificate issued by the department to the tax return on which the tax credit is claimed. (2) A partner, member, or shareholder claiming the tax credit shall attach a copy of Schedule K-1: Form 720S, Form number 41A720S(K-1); Form 765, Form number 41A765(K-1); or Form 765GP, Form number 42A765GP(K-1) to the partner's, member's, or shareholder's tax return on which the credit is claimed.

(1) Each pass-through entity or agricultural cooperative association organized under KRS Chapter 272 claiming the ethanol tax credit shall file a report with the department by electronic mail at KRC.WEBResponseEconomicDevelopmentCredits@ky.gov. (2) The electronic mail shall contain a separate attachment in plain format text or plain ASCII format that includes each partner's, member's, or shareholder's: (a) Name; (b) Address; (c) Telephone number; (d) Identification number; and (e) Distributive share of the tax credit. (103 KAR 015:110. 36 Ky.R. 1553; 2042-M; eff. 4-2-2010; 45 Ky.R. 77, 1180; eff. 12-7- 2018; Crt to Am, filing deadline 5-14-2027.)

(1) "Applicant" means a cellulosic ethanol producer that files a tax credit claim as provided by KRS 141.4244. (2) "Application" or "Schedule CELL" means the Schedule CELL, Application, and Credit Certificate of Income Tax/LLET Credit Cellulosic Ethanol (Revenue Form 41A7220CELL) that is used to make a cellulosic ethanol tax credit claim with the department for gallons of cellulosic ethanol produced in this state as provided by KRS 141.4244(3). (3) "ASTM" means the American Society for Testing and Materials. (4) "Cellulosic ethanol" is defined by KRS 141.422(6). (5) "Cellulosic ethanol producer" is defined by KRS 141.422(7). (6) "Corporation" is defined by KRS 141.010(4). (7) "Department" is defined by KRS 141.010(5) (8) "Identification number" means: (a) Social Security number for individuals; (b) Federal Employer Identification Number for general partnerships, estates, and trusts; and (c) Kentucky corporation income tax and limited liability entity tax account number for corporations and limited liability pass-through entities. (9) "Individual" is defined by KRS 141.010(13). (10) "Limited liability pass-through entity" is defined by KRS 141.010(15). (11) "Pass-through entity" is defined by KRS 141.010(21). (12) "Tax credit" means the cellulosic ethanol tax credit authorized by KRS 141.4244 and 141.4246.

completed application on or before January 15 for the preceding calendar year.

(1) A cellulosic ethanol producer shall pro-vide proof that the cellulosic ethanol gallons reported on the application meet ASTM standard specification D4806 for ethanol that is produced from cellulosic biomass materials. (2) Proof submitted by a cellulosic ethanol producer shall be in the form of documentation of laboratory results that certify that the cellulosic ethanol reported on the Schedule CELL meets the ASTM standard specification. (3) An independent ASTM certified laboratory shall be used to generate the laboratory results that are required by this section. (4) Failure to submit documented laboratory results that certify that the cellulosic ethanol meets the ASTM standard specification with the Schedule CELL shall result in the department disallowing the credit. (5) (a) A cellulosic ethanol producer shall have the cellulosic ethanol tested as provided by subsection (2) of this section on July 1 and December 31 of each calendar year to determine if the cellulosic ethanol meets the ASTM standard specification. (b) A copy of the laboratory results for July 1 and December 31 of each calendar year shall be attached to the application, Schedule CELL, submitted to the department as provided by Section 2 of this administrative regulation. (c) Failure to provide proof of meeting the ASTM standard specification on July 1 and December 31 of each calendar year with the application shall result in the denial of the credit for gallons of cellulosic ethanol back to the previous testing date of July 1 or December 31. (d) If proof is timely submitted and the proof certifies that the cellulosic ethanol does not meet the ASTM standard specification, then all credit claimed for gallons of cellulosic ethanol back to the previous testing date of July 1 or December 31 shall be disallowed.

(1) An applicant claiming the tax credit shall attach the cred-it certificate issued by the department to the tax return on which the tax credit is claimed. (2) A partner, member, or shareholder claiming the tax credit shall attach a copy of Schedule K-1: Form 720S, Form number 41A720S(K-1); Form 765, Form number 41A765(K-1); or Form 765GP, Form number 42A765GP(K-1) to the partner's, member's, or shareholder's tax return on which the credit is claimed.

(1) Each pass-through entity or agricultural cooperative association organized under KRS Chapter 272 claiming the cellulosic ethanol tax credit shall file a report with the department by electronic mail at KRC.WEBResponseEconomicDevelopmentCredits@ky.gov. (2) The electronic mail shall contain a separate attachment in plain format text or plain ASCII format that includes each partner's, member's, or shareholder's: (a) Name; (b) Address; (c) Telephone number; (d) Identification number; and (e) Distributive share of the tax credit. (103 KAR 015:120. 36 Ky.R. 1554; 2043-M; eff. 4-2-2010; 45 Ky.R. 728, 1180; eff. 12-7- 2018; Crt to Am, filing deadline 5-14-2027.)

(1) "Applicant" means a biodiesel producer, biodiesel blender, or re-newable diesel producer that files a tax credit claim as provided by KRS 141.423. (2) "Application" or "Schedule BIO" means the Schedule BIO, Application and Credit Certificate of Income Tax/LLET Credit Cellulosic Ethanol (Revenue Form 41A720BIO) that is used to make a tax credit claim with the department for gallons of biodiesel produced in this state, gallons of biodiesel used in blended biodiesel produced in this state, or gallons of renewable diesel produced in this state as provided by KRS 141.423(4). (3) "ASTM" means the American Society for Testing and Materials. (4) "Biodiesel" is defined by KRS 141.422(4). (5) "Biodiesel blender" means an entity that blends biodiesel with petroleum diesel as pro-vided by KRS 141.422(8). (6) "Biodiesel producer" is defined by KRS 141.422(5). (7) "Blended biodiesel" is defined by KRS 141.422(8). (8) "Corporation" is defined by KRS 141.010(4). (9) "Department" is defined by KRS 141.010(5). (10) "Identification number" means the: (a) Social Security number for individuals; (b) Federal Employer Identification Number for general partnerships, estates, and trusts; and (c) Kentucky corporation income tax and limited liability entity tax account number for corporations and limited liability pass-through entities. (11) "Individual" is defined by KRS 141.010(13). (12) "Limited liability pass-through entity" is defined by KRS 141.010(15). (13) "Pass-through entity" is defined by KRS 141.010(21). (14) "Renewable diesel" is defined by KRS 141.422(12). (15) "Renewable diesel producer" is defined by KRS 141.422(13).

completed application on or before January 15 for the preceding calendar year.

(1) A biodiesel producer or biodiesel blender shall provide proof the biodiesel gallons reported on the application meet ASTM standard specification D6751 for biodiesel fuel (B100) blend stock distillate fuels. (2) A renewable diesel producer shall provide proof that the renewable diesel gallons reported on the application meet ASTM standard specification D396 for fuel oils intended for use in various types of fuel-oil-burning equipment, D975 for diesel fuel oils suitable for various types of diesel fuel engines, or D1655 for aviation fuels. (3) Proof submitted by a biodiesel producer or a renewable diesel producer shall be in the form of documentation of laboratory results that certify that the biodiesel or renewable diesel reported on the Schedule BIO meets the ASTM standard specification. (4) A biodiesel blender shall obtain from the biodiesel producer a copy of laboratory results that certify that the biodiesel reported on the Schedule BIO meets the ASTM standard speciation. (5) An independent ASTM certified laboratory shall be used to generate the laboratory results that are required by this section. (6) Failure to submit documented laboratory results that certify that the biodiesel, renewable diesel, or the biodiesel used in the blended biodiesel meets the ASTM standard specification with the Schedule BIO shall result in the department disallowing the credit. (7) (a) A biodiesel producer, biodiesel blender, or renewable diesel producer shall have the biodiesel, blended biodiesel, or renewable diesel tested as provided by subsections (1) or (2) of this section on July 1 and December 31 of each calendar year to determine if the biodiesel, blended biodiesel, or renewable diesel meets the ASTM standard specification, as required to be reported by subsection (4) of this section. (b) A copy of the laboratory results for July 1 and December 31 of each calendar year shall be attached to the Schedule BIO submitted to the department as provided by Section 2 of this administrative regulation. (c) Failure to provide proof of meeting the ASTM standard specification on July 1 and December 31 of each calendar year with the application shall result in the denial of the credit claimed for gallons of biodiesel or renewable diesel back to the previous testing date of July 1 or December 31. (d) If proof is timely submitted and the proof certifies that the biodiesel or renewable diesel does not meet the ASTM standard specification, then all credit claimed for gallons of biodiesel, renewable diesel, or biodiesel used in the blended biodiesel back to the previous testing date of July 1 or December 31 shall be disallowed.

(1) An applicant claiming the tax credit shall attach the credit certificate issued by the department to its tax return on which the tax credit is claimed. (2) A partner, member, or shareholder claiming the tax credit shall attach a copy of Schedule K-1, Form 720S, Form number 41A720S(K-1), Form 765, Form number 41A765(K-1), or Form 765GP, Form number 42A765GP(K-1) to the partner's, member's, or shareholder's tax return on which the credit is claimed.

(1) Each pass-through entity claiming the biodiesel tax credit shall file a report with the department by electronic mail at KRC.WEBResponseEconomicDevelopmentCredits@ky.gov. (2) The electronic mail shall contain a separate attachment in plain format text or plain ASCII format that includes each partner's, member's, or shareholder's: (a) Name; (b) Address; (c) Telephone number; (d) Identification number; and (e) Distributive share of the tax credit. (103 KAR 015:140. 32 Ky.R. 1817; 33 Ky.R. 378; eff. 9-1-2006; 36 Ky.R. 1519; 2044-M; eff. 4-2-2010; 45 Ky.R. 730, 1181; eff. 12-7-2018; Crt to Am, filing deadline 5-14-2027.)

(1) "Applicant" means a CDE that files an application with the department to have an equity investment or long-term debt security certified as a qualified equity investment eligible for the tax credit authorized by KRS 141.434. (2) "Application" means Form 8874(K), Application for Certification of Qualified Equity Investments Eligible for Kentucky New Markets Development Program Tax Credit (Revenue Form 41A720-S80), that is published by the department and filed by a CDE with the department for certification as a qualified equity investment. (3) "Application fee" means a $1,000 nonrefundable cashier's check attached to the application at the time of filing with the department. (4) "CDE" means a qualified community development entity as defined by KRS 141.432(6). (5) "CDFI Fund" means the U.S. Department of Treasury, Community Development Financial Institutions Fund. (6) "Certification form" means Form 8874(K)-A, Notice of Kentucky New Markets Development Program Tax Credit and Certification, that is published by the department and filed by a CDE certifying to the department receipt of a cash investment. (7) "Certified purchase price" means the purchase price of a qualified equity investment contained in the application approved by the department. (8) "Department" means the Kentucky Department of Revenue. (9) "Department's approval" means certified by the department as provided by KRS 141.433(3). (10) "Identification number" means the: (a) Social Security Number for an individual; (b) Federal Employer Identification Number for a general partnership, estate, or trust; or (c) Kentucky Corporation/LLET Account Number for a corporation or limited liability pass-through entity. (11) "Long-term debt security" is defined by KRS 141.432(3). (12) "Notice of recapture" means Form 8874(K)-B, Notice of Kentucky New Markets Development Program Tax Credit Recapture, that is published by the department and sent to the CDE and each taxpayer from whom a credit is to be recaptured as a final order of recapture. (13) "Performance fee" is defined by KRS 141.433(8). (14) "Qualified active low-income community business" is defined by KRS 141.432(5). (15) "Qualified community development entity" is defined by KRS 141.432(6). (16) "Qualified equity investment" is defined by KRS 141.432(7). (17) "Qualified low-income community investment" is defined by KRS 141.432(8). (18) "Tax credit" is defined by KRS 141.432(9). (19) "Taxpayer" is defined by KRS 141.432(10).

(1) A CDE that seeks to have an equity investment or long-term debt security certified by the department as a qualified equity investment eligible for the tax credit permitted by KRS 141.434 shall file an application with the department. (2) The department shall notify the CDE within thirty (30) days after receipt of the application whether the application is approved or denied. (a) If the department intends to deny the application, the CDE shall be notified in writing by the department of the reason for the denial, and the CDE may correct the application as provided by KRS 141.433(2). (b) If the department finds that the application is in compliance with KRS 141.432 to 141.434, a copy of the application shall be returned to the CDE with written notice of the department's approval. (c) 1. The department shall: a. Accept an application on or after July 15, 2019, if the application is received via hand-delivery, mail, express mail, or courier; and b. Not accept an application received via facsimile, CD-Rom, CD, or electronic means. 2. The date that the application is stamped received by the Office of Income Taxation, Division of Corporation Tax, Tax Credits Section, shall be the date that the application is recorded as received pursuant to the provisions of KRS 141.433. 3. An application received prior to July 15, 2019, shall be recorded as received on July 15, 2019.

information shall be required on or attached to the application: (1) The CDE's name, mailing address, identification number, telephone number, and fax number; (2) The name and identification number of the parent company, if the CDE is included in a consolidated corporation income tax return filed with the Commonwealth of Kentucky; (3) The type of entity of the CDE for Kentucky income tax purposes included in the application; (4) The signature of the person completing the application and the date signed; (5) The total number of taxpayers making qualified equity investments; (6) The total amount of qualified equity investments for all taxpayers; (7) A statement that the entity has been certified as a CDE, as required by 26 U.S.C. 45D(c); (8) (a) A statement that: 1. The entity has received a new markets tax credit allocation from the CDFI Fund; 2. Includes the Commonwealth of Kentucky within the service area as set forth in the allocation; and 3. Includes the date of the allocation agreement. (b) A copy of the new markets tax credit allocation agreement shall be attached to the application; (9) Proof of current certification with the CDFI Fund that includes the original application to CDFI and all subsequent updates; (10) A statement of whether the entity's service area is a county, state, multi-state, or national. A map of the service area, articles of organization that describe the service area, bylaws that describe the service area, or other documentation that describes the service area shall be attached to the application; (11) Information regarding the proposed use of the proceeds from the qualified equity investments, including a description of the qualified active low-income community business as provided by KRS 141.432(5); (12) The name, identification number, type of investment (whether debt or equity), and purchase price of the qualified equity investment for each taxpayer making a qualified equity investment; (13) A signed certification indicating that the application has been executed by the executive officer of the CDE, declaring under the penalty of perjury: (a) That the applicant's allocation agreement remains in effect and has not been revoked or canceled by the CDFI Fund; and (b) That the application, including all accompanying documents and statements, is true, correct and complete; (14) The application fee; and (15) The refundable performance fee.

(1) Within ninety (90) days after the approved application is received by the CDE, the CDE shall issue qualified equity investments in exchange for cash in the amount of the certified purchase prices contained in the application. (2) The CDE shall provide the department with evidence of the receipt of the cash for each qualified equity investment by filing with the department a certification form. (3) If the department is satisfied that the cash amount of the qualified equity investment was received by the CDE, a copy of the certification form shall be returned to the CDE and taxpayer with the department's written approval, including a statement of the tax credits available to the taxpayer for each of the next seven (7) years. (4) If the department is not satisfied that the cash amount of the qualified equity investment was received by the CDE, the department shall notify the CDE in writing of the reason. If the CDE does not agree with the department's written determination, the CDE may file a protest as provided by KRS 131.110.

(1) If there is an event as provided by KRS 141.433(6) that would result in the recapture of any portion of the tax credit previously approved: (a) The CDE shall notify the department upon discovery of the event; or (b) The department, upon discovery of the event or after receiving notice from the CDE of the event, shall provide written notice of the proposed recapture to the CDE as provided by KRS 141.433(6)(b). (2) If the entity fails or is unable to cure the deficiency within ninety (90) days after receiving the department's notice of proposed recapture as provided by KRS 141.433(6) (b), the department shall notify the CDE and each taxpayer of the amount of recapture or the balance of the tax credit on a notice of recapture. (3) If the taxpayer is a pass-through entity, a notice of recapture shall also be sent to each partner, member, or shareholder showing the amount of recapture or the balance of the tax credit. (103 KAR 015:180. 37 Ky.R. 1107; 1490; 1625; eff. 2-4-2011; 41 Ky.R. 85; 439; eff. 10-3- 2014; 43 Ky.R. 266; eff. 11-4-2016; 45 Ky.R. 1060, 1514; eff. 1-4-2019; TAm eff. 2-7- 2019; Crt to Am, filing deadline 6-15-2027.)

(1) "Affiliate community foundation" is defined by KRS 147A.310(1). (2) "Applicant" means a taxpayer that files an application with the department to obtain preliminary authorization for the Endow Kentucky tax credit as required by KRS 141.438(7). (3) "Application" means ENDOW Application, Application for Preliminary Authorization of the Endow Kentucky Tax Credit, Revenue Form 41A720-S85. (4) "County-specific component fund" is defined by KRS 147A.310(3). (5) "Department" means the Kentucky Department of Revenue. (6) "Endowment gift" is defined by KRS 147A.310(4). (7) "Final approval" means the applicant has received written notice from the department that proof of the endowment gift has been verified, as required by KRS 141.438(8)(c). (8) "Identification number" means: (a) A Social Security number for individuals; (b) A Federal Employer Identification Number for general partnerships, estates, or trusts; or (c) A Kentucky Corporation/LLET Account Number for corporations or limited liability pass-through entities. (9) "Preliminary authorization" means the applicant has received written notice from the department that the application is in compliance with KRS 141.438. (10) "Qualified community foundation" is defined by KRS 147A.310(6). (11) "Received" means the application has been delivered in accordance with Section 2(2) of this administrative regulation and time stamped as received by the Office of Income Taxation, Division of Corporation Tax, Tax Credits Section. (12) "Tax credit" means the credit established by KRS 141.438(3). (13) "Tax credit cap" means the amount provided by KRS 141.438(6).

(1) An applicant that seeks to obtain preliminary authorization of a tax credit shall file an application with the department. (2) The application shall be delivered to the department by one (1) of the following methods: (a) By fax to (502) 564-0058; (b) By electronic mail sent to the department's mailbox at KRC.WEBResponseEconomicDevelopmentCredits@ky.gov; or (c) Hand-delivered to the Department of Revenue, 1st floor security desk at 501 High Street, Frankfort, Kentucky 40601. Security personnel shall notify the Office of Income Taxation, Division of Corporation Tax, Tax Credits Section, who shall stamp the application at the security desk as received. (3) (a) For fiscal years beginning on or after July 1, 2011, applications received by the department beginning at midnight Eastern Time on July 1 through 11:59 p.m. Eastern Time on July 7 shall be treated as having been filed at the same time. (b) If the tax credit cap is exceeded for applications received by the department within the time prescribed by paragraph (a) of this subsection, the tax credit amounts receiving preliminary authorization shall be prorated by the fraction prescribed by paragraph (c) of this subsection. (c) Tax credit amounts receiving preliminary authorization that are required to be prorated under the provisions of paragraph (b) of this subsection shall be multiplied by a fraction, the numerator of which shall be the tax credit cap and the denominator of which shall be the total tax credit amounts receiving preliminary authorization for applications delivered during the time period prescribed in paragraph (a) of this subsection. (d) If the tax credit cap is not fully allocated for a fiscal year that begins on or after July 1, 2011 for applications received during the period described in paragraph (a) of this subsection, a second period for accepting applications shall commence on July 8 of the fiscal year and end on July 14 of the fiscal year. (e) All applications received during the time frame prescribed by paragraph (d) of this subsection shall be treated as having been filed at the same time. (f) If the remaining tax credit cap is exceeded for applications received by the department within the time prescribed by paragraph (d) of this subsection, the tax credit amounts receiving preliminary authorization shall be prorated by the fraction prescribed by paragraph (g) of this subsection. (g) Tax credit amounts receiving preliminary authorization that are required to be prorated under the provisions of paragraph (f) of this subsection shall be multiplied by a fraction, the numerator of which shall be the portion of the tax credit cap not allocated during the first time period under paragraph (a) of this subsection and the denominator of which shall be the total tax credit amounts receiving preliminary authorization for applications delivered during the time prescribed in paragraph (d) of this subsection. (h) For fiscal years beginning on or after July 1, 2011, any tax credit cap not allocated under paragraphs (a) to (g) of this subsection shall be allocated on a first-come, first- serve basis beginning with applications received on or after July 15 of the fiscal year. If the tax credit cap is met under the provisions of this paragraph, subsequent applications shall be denied. (4) An application shall not be submitted prior to July 1st for each fiscal year beginning on or after July 1, 2011. (5) The department shall notify the applicant within thirty (30) calendar days after receipt of the application whether preliminary authorization of the tax credit is denied or approved. (a) If the department denies preliminary authorization of the tax credit, the applicant shall be notified in writing by the department of the reason for the denial. (b) If the department approves the tax credit application, a copy of the application shall be returned to the applicant with written notice of the department's preliminary authorization. (6) Any restored tax credit cap described in KRS 141.438(8)(d) shall be re-allocated to the pool of applications received during the same time period in which the application was received from the applicant that had the preliminary approval voided. Any restored tax credit cap shall be re-allocated based on the applicable requirements prescribed by subsection (3) of this section. The other applicants from the same pool shall receive amended preliminary approvals reflecting the re-allocation. (7) (a) The percentage of proration for the pool of applicants described in subsection (3)(d) of this section shall not exceed the percentage of proration for the pool of applicants described in subsection (3)(a) of this section. (b) The maximum tax credit amount for the pool of applicants described in subsection (3)(h) of this section shall not exceed the maximum tax credit amount received by the pool of applicants described in subsections (3)(a) and (3)(d) of this section.

information shall be required on or attached to the application: (1) The applicant's name, mailing address, identification number, telephone number, and fax number; (2) The entity type of the applicant for Kentucky income tax purposes; (3) The submission date of the application; (4) The amount of the endowment gift; (5) The amount of tax credit; (6) (a) The qualified community foundation's or affiliate community foundation's name, mailing address, identification number, telephone number, and fax number; or (b) If a county–specific component fund, its name; and (7) A statement that the application was executed by the applicant or authorized representative, declaring under the penalty of perjury that the application, including all accompanying documents and statements, is true, correct and complete.

(1) Within thirty (30) calendar days after receiving the notice of preliminary authorization of the tax credit from the department, the taxpayer shall make the endowment gift to the permanent endowment fund held by the approved qualified community foundation, county-specific component fund, or affiliate community foundation. (2) The applicant shall provide the department with proof of the endowment gift within ten (10) calendar days of making the gift by filing with the department Schedule ENDOW, Notice of Endow Kentucky Tax Credit and Certification, Revenue Form 41A720-S86. (3) If the department has verified that the endowment gift specified on the application was made to the approved qualified community foundation, county-specific component fund, or affiliate community foundation, Schedule ENDOW shall be returned to the applicant with the department's final approval of the tax credit. (4) If the applicant fails to make an endowment gift or provide proof of the endowment gift to the department within the time frames established in KRS 141.438(7), the department shall revoke the preliminary authorization of the tax credit by written notification to the applicant. The department shall restore the denied amount to the tax credit cap and re-allocate the restored amount under the requirements established in Section 2(6) of this administrative regulation.

(1) If an applicant approved for preliminary authorization makes an endowment gift that is less than the amount indicated on the application and all the other applicable requirements of KRS 141.438 and this administrative regulation are met by the applicant, the department shall: (a) Issue final approval based on the amount proven; and (b) Restore to the tax credit cap the difference between the amount of tax credit that received preliminary authorization and the amount receiving final approval. (2) The amount restored to the tax credit cap shall be re-allocated as provided in Section 2(6) of this administrative regulation.

preliminary authorization for an amount but due to the proration provisions in Section 2 of this administrative regulation will receive a tax credit for less than the amount for which the applicant is preliminarily approved, the applicant may donate the lesser prorated amount without penalty and receive the corresponding tax credit of the lesser prorated amount.

information shall be required on or attached to the Schedule ENDOW: (1) The applicant's name, mailing address, identification number, telephone number, and fax number; (2) The entity type of the applicant for Kentucky income tax purposes; (3) The date the endowment gift was made to the approved qualified community foundation, county-specific component fund, or affiliate community foundation; (4) The amount of the endowment gift; (5) The date of the department's preliminary authorization of the tax credit; (6) (a) The qualified community foundation's or affiliate community foundation's name, mailing address, identification number, telephone number, and fax number; or (b) If a county–specific component fund, its name; and (7) A statement that the Schedule ENDOW was executed by a foundation officer or designee, declaring under the penalty of perjury that the: (a) 1. Foundation is a qualified community foundation as provided by KRS 147A.310(6); 2. Foundation is a qualified affiliate community foundation as provided by KRS 147A.310(1); or 3. Fund is a county-specific component fund as provided by KRS 147A.310(3); (b) Endowment gift is held in a permanent endowment fund as provided by KRS 147A.310(4); and (c) Schedule ENDOW, including all accompanying documents and statements, is true, correct and complete.

(1) An applicant claiming the tax credit shall attach each tax year a copy of the approved Schedule ENDOW to the tax return on which the credit is claimed. (2) An applicant claiming the tax credit shall not claim more than $10,000 in credit on a single return. (3) A partner, member, or shareholder of an applicant claiming the tax credit shall attach each taxable year a copy of Schedule K-1, Form 720S (Revenue Form 41A720S(K-1)); Schedule K-1, Form 765 (Revenue Form 41A765(K-1)); or Schedule K-1, Form 765-GP (Revenue Form 42A765-GP(K-1)), to the partner's, member's, or shareholder's tax return on which the credit is claimed. (4) A beneficiary of an applicant that is an estate or trust shall attach each taxable year a copy of Schedule K-1, Form 741 (Revenue Form 42A741(K-1)), to the beneficiary's tax return on which the credit is claimed.

subject to applicable copyright law, from 8:00 a.m. until 4:30 p.m. at the Kentucky Department of Revenue, 501 High Street, Frankfort, Kentucky 40601, at any Kentucky Department of Revenue Taxpayer Service Center during operating hours, and on the department's website at http:\\revenue.ky.gov. (103 KAR 015:195. 37 Ky.R. 2769; 38 Ky.R. 13; eff. 8-5-2011; 45 Ky.R. 1062; eff. 1-4- 2019; Crt to Am, filing deadline 6-15-2027.)

(1) "Domicile" means the place where an individual has established permanent residency. (2) "Nonresident" is defined by KRS 141.010(25). (3) "Nonresident citizen" means an individual residing in a foreign country who may file federal income tax returns as a nonresident citizen. (4) "Part-year resident" is defined by KRS 141.010(27). (5) "Resident" is defined by KRS 141.010(32).

returns to Kentucky within six (6) months from the time he had moved, it shall be construed that the removal from Kentucky was not intended to be permanent and the individual shall be considered a resident, or part-year resident during the time in which his abode may have been elsewhere. Any individual changing his domicile during a taxable year may also be required to furnish evidence of compliance with requirements of the other state with respect to taxation and qualifications as a resident citizen.

Domicile is not changed by removal for a definite period or for incidental purposes. To constitute a change, there shall be intent to change, actual removal, and a new abode.

federal income tax returns as a nonresident citizen, and who immediately prior to residing in a foreign country was domiciled in Kentucky, is presumed to be a Kentucky resident. An individual may, however, overcome this presumption by presenting sufficient evidence that the Kentucky domicile has been abandoned.

a domicile in Kentucky are taxable as residents. Individuals, once domiciled in Kentucky, are considered Kentucky residents if a domicile has not been established outside of Kentucky. If the individual's domicile is claimed to be outside Kentucky, the requirements of Section 3 of this administrative regulation shall be met.

Act of 1940 as amended, a member of the Armed Forces retains the domicile which he had when he entered military service. Individuals domiciled in Kentucky at the time of induction will continue to be liable for the payment of Kentucky income taxes on all income regardless of where their military services are performed. However, military personnel (usually career personnel) may change their domicile from Kentucky to another state as any other individual. Conclusive evidence shall be submitted showing that their Kentucky domicile has been abandoned and a new domicile established outside of Kentucky.

(1) Kentucky has reciprocal tax agreements with the states of Indiana, Illinois, Michigan, Ohio, Virginia, West Virginia, and Wisconsin. These agreements provide that salaries and wages earned in Kentucky by residents of those states are exempt from Kentucky income tax. Kentucky residents are exempt from income tax, imposed by these states, on salaries and wages earned there. The Virginia Agreement, however, applies only to taxpayers who commute daily to their employment in the nonresident state. (2) A Kentucky resident, working in one (1) of the states listed in subsection (1) of this section shall file the required certificate of nonresidence with his employer if they wish for tax to not be withheld by that employer. That certificate is the employer's authority to exempt the employee's income from withholding. A resident of a state listed in subsection (1) of this section shall file Form K-4, Kentucky Withholding Certificate, Revenue Form 42A804, with his Kentucky employer to exempt his income from Kentucky withholding. All Kentucky residents are subject to Kentucky income tax requirements as set forth in KRS 141.020. (103 KAR 017:010. II-1-1; 1 Ky.R. 328; eff. 2-5-1975; 10 Ky.R. 43; eff. 8-3-1983; 45 Ky.R. 1066, 1516; eff. 1-4-2019; Crt eff. 12-15-2025; TAm eff. 1-29-2026.)

separate return. If both spouses have income, separate returns are required for married taxpayers that do not have the same residency status as a resident, nonresident, or part year resident.

if they are married at the close of the taxable year; or a surviving spouse may elect to file a joint return if the deceased spouse died during the taxable year even though one (1) spouse had no gross income. If a joint return is filed, the gross income and adjusted gross income of the taxpayer and spouse are computed in an aggregate amount and the deductions and the net income are also computed on an aggregate basis. If separate returns have been filed by both spouses for the taxable year, the taxpayers may elect to file an amended joint return if the Department of Revenue is notified in writing that the separate return election is rescinded. Likewise, if two (2) married taxpayers have filed a joint return for the taxable year, they may elect to file an amended combined or amended separate returns. Taxpayers filing joint returns are jointly and severally liable for all taxes, penalties, and interest accruing under the return.

they are married at the close of the taxable year and have the same residency status as a resident, nonresident, or part year resident. If a combined return is filed, the gross income, adjusted gross income, deductions, net income, tax credits, and tax liabilities of the taxpayer and spouse are computed separately, but the tax shall be assessed on an aggregate basis. If married taxpayers elect to file a combined return, refunds shall be made payable to the taxpayers jointly and the taxpayers shall be jointly and severally liable for all taxes, penalties, and interest. Married couples electing to file a combined return shall not be permitted to rescind such election and file separate returns for that taxable year. (103 KAR 017:020. II-2; 1 Ky.R. 225; eff. 1-8-1975; 3 Ky.R. 147; eff. 9-1-1976; 45 Ky.R. 1068, 1516; eff. 1-4-2019; Crt eff. 12-15-2025.)

(1) "Nonresident" is defined by KRS 141.010(25). (2) "Part-year resident" is defined by KRS 141.010(27). (3) "Resident" is defined by KRS 141.010(32).

Kentucky income tax regardless of its source. Income from out of state sources shall not be exempt. The adjustments to gross income and itemized deductions allowed under KRS 141.019 of a resident shall not be limited to those paid in Kentucky.

(1) Part-year residents shall be subject to Kentucky individual income tax upon their entire net incomes from all sources while they are Kentucky residents, and upon their incomes from Kentucky sources during the period of non-residency. (2) Except as provided in Section 6 of this administrative regulation for net operating loss deductions, part-year residents shall be limited to either. (a) Adjustments to gross income and itemized deductions allowed pursuant to KRS 141.019 paid while a Kentucky resident; or (b) That portion of total adjustments to gross income and total itemized deductions allowed pursuant to KRS 141.019 that Kentucky income bears to total income.

(1) Any net income of a nonresident shall be subject to Kentucky income tax if it is derived from services performed in Kentucky, from property located in Kentucky, or from income received from a pass-through entity doing business in Kentucky. Income from sources outside Kentucky shall not be subject to Kentucky income tax. Losses incurred outside Kentucky shall not be deductible in computing Kentucky adjusted gross income. (2) Except as provided in Section 6 of this administrative regulation for net operating loss deductions, the adjustments to gross income and itemized deductions allowed pursuant to KRS 141.019 shall be limited to that portion of adjustments to gross income and total itemized deductions that Kentucky income bears to total income.

gross income is allowable based upon the receipt of certain types of income and is limited to a maximum amount deductible for federal income tax purposes, the Kentucky income used to make the allocation shall be the same type of income used to allow the deduction on the federal return per KRS 141.017.

shall compute the net operating loss deduction using Kentucky income and expenses allowed or allowable on the Kentucky return. (103 KAR 017:060. II-6-1; 1 Ky.R. 329; eff. 2-5-1975; 20 Ky.R. 2879; eff. 5-18-1994; 32 Ky.R. 2060; 33 Ky.R. 77; eff. 8-7-2006; 45 Ky.R. 1069, 1517; eff. 1-4-2019; Crt eff. 12-15- 2025; TAm eff. 1-29-2026.)

property, or intangible property shall be divided in accordance with the actual ownership of the property by married individuals filing separate tax returns. If actual ownership is not known or specified, income shall be divided equally. Income derived from property not held jointly shall be attributable to its individual owner.

returns shall be divided according to Section 6017 of the Internal Revenue Code, 26 U.S.C. 6017 and other guidance issued by the U.S. Department of the Treasury and the Internal Revenue Service. (103 KAR 017:100. 32 Ky.R. 2205; 33 Ky.R. 77; eff. 8-7-2006; 45 Ky.R. 734, 1182; eff. 12- 7-2018; Crt eff. 11-14-2025.)

3911(1).

received under the provisions of 103 KAR 17:060.

military assignment shall not be required to report income or compensation from service in the military. Income from nonmilitary Kentucky sources shall be subject to Kentucky income tax and shall be reported under the provisions of 103 KAR 17:060.

accordance with the provisions of 50 U.S.C. 4001.

living outside of Kentucky shall not be considered a resident of Kentucky merely because the servicemember is considered a resident for tax purposes.

Kentucky to another state in which he or she resides. Notice of intent to change shall be filed with the personnel department of the appropriate military service. (103 KAR 017:130. 33 Ky.R. 1201; 1519; eff. 1-5-2007; 45 Ky.R. 735, 11863; eff. 12-7- 2018; Crt to Am, filing deadline 5-14-2027.)

exempting specific income from tax shall apply only to the specific types of income listed. Income from other sources may require the filing of a nonresident income tax return.

withholding tax.

of income exemption available are listed in this section: (1) Illinois. (a) Reciprocity with Illinois shall be in accordance with the reciprocity agreement titled "Agreement between Director of Revenue for the State of Illinois and the Commissioner of Revenue of the Commonwealth of Kentucky". (b) Residents of Illinois shall be exempt from Kentucky income tax on wages and salaries. (2) Indiana. (a) Reciprocity with Indiana shall be in accordance with the reciprocity agreement titled "Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Indiana". (b) Residents of Indiana shall be exempt from Kentucky income tax on wages, salaries, and commissions. (3) Michigan. (a) Reciprocity with Michigan shall be in accordance with the reciprocity agreement titled "Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Michigan". (b) Residents of Michigan shall be exempt from tax on income earned from personal services in Kentucky. Personal services shall include salaries and wages. (4) Ohio. (a) Except as provided in paragraphs (b) and (c) of this subsection, reciprocity with Ohio shall be in accordance with the reciprocity agreement titled "Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Ohio". (b) Except as provided in paragraph (c) of this subsection, residents of Ohio shall be exempt from Kentucky income tax on salaries and wages. (c) Effective for calendar years beginning on or after January 1, 2007, the reciprocity agreement with Ohio shall not apply with respect to wages which an S corporation pays to a shareholder-employee if the shareholder-employee is a "twenty (20) percent or greater" direct or indirect equity investor in the S corporation. (5) Virginia. (a) Reciprocity with Virginia shall be in accordance with the reciprocity agreement titled "Reciprocal Income Tax Agreement between Commonwealth of Kentucky and Commonwealth of Virginia". (b) Virginia residents commuting daily to work in Kentucky shall be exempt from income tax on salaries and wages. (6) West Virginia. (a) Reciprocity with West Virginia shall be in accordance with the reciprocity agreement titled "Reciprocal Income Tax Agreement between State of West Virginia and Commonwealth of Kentucky". (b) Residents of West Virginia shall be exempt from Kentucky income tax on salaries and wages. (7) Wisconsin. (a) Reciprocity with Wisconsin shall be in accordance with the reciprocity agreement titled "Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Wisconsin". (b) Residents of Wisconsin shall be exempt from tax on income earned from personal services in Kentucky. Personal services shall include salaries and wages.

administrative regulation, but who maintains a place of abode and spends more than 183 days in Kentucky during the year, reciprocity shall not apply and that person shall be considered a Kentucky resident for tax purposes.

(1) The following material is incorporated by reference: (a) Agreement between Director of Revenue for the State of Illinois and the Commissioner of Revenue of the Commonwealth of Kentucky, January 28, 1971; (b) Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Indiana, January 1, 1965. (c) Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Michigan, February 16, 1968; (d) Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Ohio, January 7, 1972; (e) Reciprocal Income Tax Agreement between Commonwealth of Kentucky and Commonwealth of Virginia, September 2, 1964; (f) Reciprocal Income Tax Agreement between State of West Virginia and Commonwealth of Kentucky, April 9, 1965; and (g) Reciprocal Income Tax Agreement between Commonwealth of Kentucky and State of Wisconsin, June 21, 1965. (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Department of Revenue, 501 High Street, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 5 p.m. (103 KAR 017:140. 33 Ky.R. 1202; 1606; 1792; eff. 2-2-2007; TAm eff. 5-16-2017; 45 Ky.R. 736, 1183; eff. 12-7-2018; Crt eff. 11-14-2025.)

Kentucky, doing business in Kentucky, or subject to the jurisdiction of Kentucky in any manner, and making payment of wages subject to withholding shall deduct, withhold, and pay to the department the tax required to be withheld.

Kentucky, as a regular employee in the conduct of business of an employer required to withhold taxes, are subject to withholding. The wages paid to nonresidents of Kentucky are subject to withholding to the extent that they are wages for personal services rendered in Kentucky as a regular employee in the conduct of the business of an employer in Kentucky. However, the nonresident is not subject to withholding where a reciprocal exemption agreement is in effect between Kentucky and the state of residence of the nonresident employee. (103 KAR 018:010. IW-1; 1 Ky.R. 329; eff. 2-5-1975; TAm eff. 5-16-2017; Crt eff. 11-6- 2018; Crt eff. 10-1-2025.)

tax required to be withheld and paid to the department for any period, proper adjustment may be made on the return for a subsequent period of the same calendar year. Every return on which an adjustment for a preceding period is reported shall include a statement explaining the adjustment and designating the period in which the error occurred. A claim for refund may be filed for any overpayment.

withheld is deducted from any wage payment, the employer may deduct the under- collection from the remuneration of the employee under his or her control. If there is no remuneration under the control of the employer, the matter is one for settlement between the employer and the employee, but the amount under-collected shall be the liability of the employer.

is deducted from any wage payment, the over-collection may be repaid to the employee. The employer shall obtain and keep, as part of his or her records, the written acknowledgement of receipt of the repayment by the employee showing the date and amount of the repayment. Any over-collection not repaid and receipted for by the employee shall be reported and paid to the department for the period in which the over-collection was made.

withholding which cannot be adjusted in a return for a subsequent period of the same calendar year. (IW-2; 1 Ky.R. 227; eff. 1-8-1975; TAm eff. 5-16-2017; TAm eff. 7-16-2018; 48 Ky.R. 488, 1508; eff. 2-1-2022.) CONTACT PERSON: Gary Morris, Executive Director, Office of Tax Policy and Regulation, Department of Revenue, 501 High Street, Station 1, Frankfort, Kentucky 40601, phone (502) 564-0424, fax (502) 564-3875, email Gary.Morris@ky.gov.

(1) Employers shall provide to their employees the following forms as withholding statements to report Kentucky withholding: (a) Federal Form W-2, "Wage and Tax Statement"; (b) Federal Form W-2G, Certain Gambling Winnings; (c) Federal Form 1099 series; or (d) Facsimiles of the forms listed in this subsection that are acceptable to the Internal Revenue Service. (2) The statements provided by employers to their employees shall contain: (a) The state name; (b) The employer's Kentucky withholding account number; (c) The Kentucky taxable wages; and (d) The Kentucky tax withheld.

(1) If the employer terminates its business, the withholding statement shall be provided to its employees for the calendar year of termination within thirty (30) days of termination. (2) The employer shall submit its final return and withholding statements to the department within the same thirty (30) day period.

(1) If it is necessary to correct a withholding statement after it has been issued to an employee, the Federal Form W-2C or a new withholding statement shall be clearly marked "Corrected", and a copy submitted to the department within thirty (30) days of issuance. (2) If the withholding statement is lost or destroyed, the employer shall prepare and issue a duplicate copy to the employee that is clearly marked "Duplicate" within thirty (30) days of the request by the employee.

(1) Employers shall provide withholding statement information to the department in an acceptable format by January 31 following the close of the calendar year. (2) An employer who issues twenty-six (26) or more withholding statements annually shall utilize an acceptable form of electronic filing. (3) An employer who issues less than twenty-six (26) withholding statements annually shall file either Form K-5, "Kentucky Employer's Report of Withholding Tax Statements," Revenue Form 42A805 with the department or utilize another acceptable form of electronic filing. (4) (a) The department shall provide to employers by October 31 of each year information about the types of electronic filing methods acceptable to the department. (b) Acceptable electronic filing methods shall include all of the acceptable methods utilized by the Social Security Administration and the Internal Revenue Service that can be supported by the department's processes. (c) Withholding statement information submitted electronically to the department via a physical media device (e.g., CD, USB, external hard drive, etc.) shall be accompanied by Form 42A806 "Transmitter Report" upon submission. (5) If an employer is required to utilize an electronic method of filing, it shall file the withholding statements in an acceptable electronic format unless the department grants a written waiver of the requirement.

(1) Failure to comply with the provisions of this administrative regulation may result in the issuance of penalties in accordance with KRS 131.180 unless reasonable cause is provided. (2) Examples. One (1) or more of the penalties may apply if the employer: (a) Fails to file timely; (b) Fails to include all information required to be shown on the withholding statement; (c) Includes incorrect or illegible information on the withholding statement and fails to file corrections; (d) Files on paper if required to file electronically; or (e) Fails to provide timely or correct payee statement to employees.

subject to applicable copyright law, from 8:00 a.m. until 4:30 p.m. at the Kentucky Department of Revenue, 501 High Street, Frankfort, Kentucky 40601, at any Kentucky Department of Revenue Taxpayer Service Center during operating hours, and on the department's website at http:\\revenue.ky.gov. . (103 KAR 018:050. IW-5; 1 Ky.R. 329; 585; eff. 2-5-1975; 3 Ky.R. 150; eff. 9-1-1976; 23 Ky.R. 461; 1578; eff. 10-14-1996; 30 Ky.R. 664; 1455; eff. 11-25-2003; 45 Ky.R. 1070, 1518; eff. 1-4-2019; Crt eff. 12-15-2025.)

period of more than one (1) year, the amount of tax required to be deducted and withheld in respect to such wages shall be determined as if such payroll period constituted a miscellaneous payroll period of 365 days. (103 KAR 018:060. IW-6; 1 Ky.R. 330; eff. 2-5-1975; TAm eff. 6-22-2017; Crt eff. 11-6- 2018; Crt eff. 10-1-2025.)

(1) "Benefit year" is defined by KRS 341.090(3). (2) "Benefits" is defined by KRS 341.020(4). (3) "Cabinet" means the Education and Workforce Development Cabinet as defined by KRS 341.005. (4) "Department" means the Department of Revenue as defined by KRS 141.010(5). (5) "Fund" is defined by KRS 341.020(1). (6) "Gambling winnings" means winnings that are subject to withholding as defined by 26 U.S.C. 3402(q) of the Internal Revenue Code. (7) "Supplemental wages" means payments made to an employee by the individual's employer in addition to regular wages.

deduct and withhold from the payment Kentucky income tax at the maximum tax rate provided in KRS 141.020.

(1) If supplemental wages are paid at the same time as regular wages, the tax to be withheld shall be determined as if the aggregate of the supplemental and regular wages were a single wage payment for the regular payroll period. (2) If supplemental wages are paid at a different time, the employer shall determine the tax to be withheld by aggregating the supplemental wages either with the regular wages for the current payroll period or with the regular wages for the last preceding payroll period within the same calendar year.

(1) If an employee receives vacation pay for the time of a vacation absence, the vacation pay shall be subject to withholding as though it were a regular wage payment made for the payroll period or periods which occur during the vacation. (2) If vacation pay is paid in addition to regular wages to an employee who forgoes his vacation, the payments shall be treated as supplemental wages.

(1) An individual filing a new claim for benefits shall: (a) Be notified of the requirements established in KRS 341.395(1) by the Education and Workforce Development Cabinet; and (b) Indicate on the initial or reopened claim for benefits if the individual elects to have the state income tax imposed by KRS 141.020 deducted and withheld from the individual's benefits at the rate of four (4) percent. An individual may make the indication: 1. On paper by completing an "Initial Claim Application" as incorporated by reference in 787 KAR 1:090; 2. Electronically by submitting an Initial Claim Application online at https://uiclaims.des.ky.gov/ebenefit; or 3. By any other means of filing an initial claim application as established by the cabinet and 787 KAR 1:090(2). (2) The amounts deducted and withheld from benefits pursuant to subsection (1) of this section shall remain in the unemployment insurance fund until transferred to the department as a payment of income tax in accordance with the priority order established in 787 KAR 1:320. (3) The cabinet shall follow all procedures pertaining to the deducting and withholding of income tax specified in KRS 341.395(3) or by the department. (IW-7; 1 Ky.R. 330; eff. 2-5-1975; 30 Ky.R. 952; 1456; eff. 11-25-2003; 32 Ky.R. 1723; 33 Ky.R. 78; eff. 8-7-2006; 37 Ky.R. Am. 409; Am 1177; eff. 12-3-2010; 44 Ky.R. 1096; eff. 2-2-2018; TAm eff. 7-16-2018; Cert to Am, filing deadline 7-27-2026.)

(1) (a) Every employer required to deduct and withhold income tax upon wages shall keep employee withholding exemption certificates and records showing the following: 1. The number of persons employed during the year whose wages are subject to withholding; 2. The periods of employment; and 3. The amounts and dates of payment to each person. (b) No specific form for records has been prescribed by the department. (2) Records required by this administrative regulation shall be maintained for a period of at least four (4) years after the date the withholding return is filed or the date tax withheld by the employer is paid, whichever is later. (IW-9; 1 Ky.R. 330; eff. 2-5-1975; TAm eff. 6-22-2017; TAm eff. 7-16-2018; 48 Ky.R. 490, 1509; eff. 2-1-2022.) CONTACT PERSON: Gary Morris, Executive Director, Office of Tax Policy and Regulation, Department of Revenue, 501 High Street, Station 1, Frankfort, Kentucky 40601, phone (502) 564-0424, fax (502) 564-3875, email Gary.Morris@ky.gov.

required by KRS 141.370 or by any withholding computer formula published by the department, an employee may authorize his employer to withhold additional Kentucky income tax using Form K-4, Kentucky Withholding Certificate, Revenue Form 42A804. (103 KAR 018:110. IW-11; 1 Ky.R. 331; eff. 2-5-1975; 2 Ky.R. 588; 3 Ky.R. 287; eff. 8-4- 1976; 9 Ky.R. 10; eff. 8-11-1982; 16 Ky.R. 2698; eff. 8-2-1990; 17 Ky.R. 1524; eff. 11-21- 1990; 36 Ky.R. 1522; 2046-M; eff. 4-2-2010; 45 Ky.R. 1073; eff. 1-4-2019; Crt eff. 12-15- 2025.)

Revenue to collect withholding taxes has been provided in KRS 141.310(14) which authorizes the department to fix the amount of and demand the posting of a corporate surety bond or cash not to exceed $50,000 by any employer required under KRS Chapter 141, or the administrative regulations promulgated thereunder, to withhold Kentucky income taxes from wages of employees.

department may require a withholding tax security bond and those persons from whom a security bond may be required includes the following: (1) An employer who is delinquent in either filing withholding tax returns required by law or is delinquent in submitting to the department any tax withheld from an employee, or both; or (2) An employer, who for any reason, the department determines is or may become an insecure risk for which there is a need to ensure compliance with the law.

ensure compliance of reporting and paying withholding taxes, shall demand the posting of a security bond by written notice transmitted by certified mail and shall include therein instructions and forms for the convenience of the employer.

department demanded from the employer within twenty (20) days from the date of the written notification by certified mail will, by such failure, authorize the department to invoke immediately its statutory authority to seek a court order requiring cessation of all business or activities of the employer failing to post the bonds.

decrease the amount of any bond that has been posted.

required to file monthly withholding tax returns and to accompany the monthly returns with a complete payment of all taxes withheld during the month covered by the return.

requiring cessation of all business operation or activity of any employer failing to comply with this administrative regulation, in the Franklin Circuit Court or in any other circuit court which may have jurisdiction over the area in which the employer resides, or in which some or all of the employer's business is conducted, or having jurisdiction of the area in which property of the employer is located. The department may institute legal action in accordance with any provision of this administrative regulation. (103 KAR 018:120. IW-12; 1 Ky.R. 331; eff. 2-5-1975; 20 Ky.R. 2879; 21 Ky.R. 16; eff. 6- 17-1994; TAm eff. 6-22-2017; 45 Ky.R. 1074, 1518; eff. 1-4-2019; Crt eff. 12-15-2025.)

December 31 of the year immediately preceding the current calendar year. For example, the lookback period for calendar year 2020 is the period beginning on January 1, 2019 and ending on December 31, 2019.

Section 3 of this administrative regulation: (1) (a) Any employer who withheld income tax of less than $400 during the lookback period shall report and pay the tax annually using Revenue Form K-3, "Employer's Annual Reconciliation Return." (b) Revenue Form K-3 and the income tax withheld shall be filed and paid on or before the last day of the month following the close of the calendar year in which the tax was withheld (January 31). (2) (a) Any employer who withheld income tax of $400 or more, but less than $2,000 during the lookback period shall report and pay the tax quarterly using Revenue Form K-1, "Employer's Return of Income Tax Withheld." (b) Revenue Form K-1 and the income tax withheld each quarter shall be filed and paid on or before the last day of the month following the close of each of the first three (3) quarters of the calendar year (April 30, July 31, and October 31). (c) Revenue Form K-3, "Employer's Annual Reconciliation Return," and the income tax withheld for the fourth quarter shall be filed and paid on or before the last day of the month following the close of the calendar year in which the tax was withheld (January 31). (3) (a) Any employer who withheld income tax of $2,000 or more, but less than $50,000 during the lookback period shall report and pay the tax monthly using Revenue Form K-1, "Employer's Return of Income Tax Withheld." (b) Revenue Form K-1 and the income tax withheld each month shall be filed and paid on or before the 15th day of the following month for each of the first eleven (11) months of the calendar year. (c) Revenue Form K-3, "Employer's Annual Reconciliation Return," and the income tax withheld for the last month shall be filed and paid on or before the last day of the month following the close of the calendar year in which the tax was withheld (January 31). (4) (a) 1. Except as provided in paragraph (b) of this subsection, any employer who withheld income tax of $50,000 or more during the lookback period shall report and pay the tax twice monthly using Revenue Form K-1, "Employer's Return of Income Tax Withheld." 2. Revenue Form K-1 and the income tax withheld during the first through the 15th day of each month of the calendar year shall be reported and paid on or before the 25th day of that month. 3. Revenue Form K-1 and the income tax withheld during the 16th through the last day of each month of the calendar year shall be reported and paid on or before the tenth day of the following month. 4. However, Revenue Form K-1 and the income tax withheld during the first calendar month shall be filed and paid on or before the tenth of the following month (February 10), and the income tax withheld for the period beginning December 16 and ending on December 31 shall be paid with Revenue Form K-3, "Employer's Annual Reconciliation Return," which shall be filed on or before the last day of the month following the close of the calendar year in which the tax was withheld (January 31). (b) Any employer who withheld income tax during the lookback period of $50,000 or more and whose average monthly income tax withheld during the lookback period is more than $25,000 shall pay the tax withheld by electronic funds transfer. (5) The department shall provide written notification of the reporting and payment requirements to any employer who does not have a lookback period. (6) For periods beginning on or after January 1, 2021, twice monthly and monthly filers shall electronically file and pay the income tax withheld. (7) For periods beginning on or after January 1, 2022, all filers shall electronically file and pay the income tax withheld.

(1) If, on any day during a reporting period, an employer accumulates $100,000 or more of total income tax withheld before a current electronic transaction is otherwise due, the employer shall pay the tax withheld by electronic funds transfer. The employer shall electronically transfer the tax withheld as provided by 103 KAR 1:060 by the close of the first banking day after the first day the employer accumulates $100,000 or more of income tax withheld. (2) (a) Any employer not required to pay the tax by electronic funds transfer may make a written request to the department and, if approved by the department, shall be subject to the same requirements as those employers required to electronically transfer the tax. (b) Any employer who may pay by electronic funds transfer shall continue to pay the tax withheld by electronic funds transfer until the department authorizes the employer in writing to change his reporting and payment method.

provisions of Section 2 of this administrative regulation: (1) The department may change annually the reporting or payment requirements of any employer upon written notice to the employer. (2) Upon written request by any employer and approval by the department, the department may change the reporting or payment frequency prescribed by this administrative regulation.

this administrative regulation shall be subject to penalties as provided in KRS 131.180 and interest as provided in KRS 131.183. (21 Ky.R. 144; 912; eff. 9-12-1994; 45 Ky.R. 1075, 1520; eff. 1-4-2019; 46 Ky.R. 1593; eff. 5-5-2020.)

rescinded and shall be null, void, and unenforceable: (1) Revenue Circular 42C010 - Withholding tax reporting procedures under the Ky. Revitalization Authority. This circular is being rescinded because it is obsolete. Guidance on withholding tax reporting procedures under the Kentucky Revitalization Authority is available in 103 KAR 18:180 - Withholding Tax Reporting Procedures Under the Kentucky Revitalization Authority. (2) Revenue Circular 42C011 - Kentucky. Withholding tax reporting procedures under the Kentucky Jobs Development Authority. This circular is being rescinded because it is obsolete. Guidance on withholding tax reporting procedures under the Kentucky Jobs Development Authority is available in 103 KAR 18:210, Kentucky Jobs Development Act Service and Technology Job Creation Assessment Fee. (3) Revenue Circular 42C012 - Kentucky. Withholding tax reporting procedures under the Ky. Rural Economic Development Authority. This circular is being rescinded because it is obsolete. Guidance on withholding tax reporting procedures under the Kentucky Rural Economic Development Authority is available in 103 KAR 18:190, Kentucky Rural Economic Development Act Job Development Assessment Fee. (4) Revenue Circular 42C013 - Kentucky. Withholding tax reporting procedures under the Ky. Industrial Development Act. This circular is being rescinded because it is obsolete. Guidance on withholding tax reporting procedures under the Kentucky Industrial Development Act is available in 103 KAR 18:200, Kentucky Industrial Development Act Job Development Assessment Fee. (103 KAR 018:172. 33 Ky.R. 1203; 1520; eff. 1-5-2007; Crt eff. 11-6-2018; Crt eff. 10-1- 2025.)

(1) "Annual Report" means Form 42A900, Wage Assessment Annual Report for Economic Development Credits, as prescribed by the department at https://revenue.ky.gov. (2) "Department" means the Kentucky Department of Revenue. (3) "Gross wages" means any payment an employer gives an employee for services performed before any deductions permitted by federal or Kentucky law to yield "Taxable wages." (4) "KBI" means the Kentucky Business Investment Program Act, which is codified as KRS 154.32-010 to 154.32-100 and referenced in KRS 141.415. (5) "KEOZ" means the Kentucky Economic Opportunity Zone Act, which is codified as KRS 154.23-005 to 154.23-080 and referenced in KRS 141.401. (6) "KIDA" means the Kentucky Industrial Development Act, which is codified as KRS 154.28-010 to 154.28-140 and referenced in KRS 141.400. (7) "KIRA" means the Kentucky Industrial Revitalization Act, which is codified as KRS 154.26-010 to 154.26-125 and referenced in KRS 141.403. (8) "KJDA" means the Kentucky Jobs Development Act, which is codified as KRS 154.24-010 to 154.24-160 and referenced in KRS 141.407. (9) "KJRA" means the Kentucky Jobs Retention Act, which is codified as KRS 154.25- 010 to 154.25-050 and referenced in KRS 141.402. (10) "KREDA" means the Kentucky Rural Economic Development Act, which is codified as KRS 154.22-010 to 154.22-102 and referenced in KRS 141.347. (11) "Taxable wages" means any payment an employer gives an employee for services performed as reported in box 1 of Internal Revenue Service Form W-2, Wage and Tax Statement.

(1) An approved company with a Kentucky economic development act project authorized under the statutes listed in Section 1 of this administrative regulation shall file an annual wage assessment report with the department. (2) The annual report shall be faxed or mailed on or before March 15 of each calendar year to the department, to report wage assessment credits claimed for the preceding calendar year. (3) Information required on the annual report shall include: (a) Company name; (b) Project number assigned by the Cabinet for Economic Development; (c) Kentucky withholding account number; (d) Activation date of project; (e) Total annual gross or taxable wages for all employees as described below: 1. Gross wages shall be used for the KEOZ, KIDA, KIRA, KJRA and KREDA credits; and 2. Taxable wages shall be used for the KBI and KJDA credits; (f) Total annual wage assessment credit claimed; (g) Total annual local wage assessment credit claimed; and (h) Total annual Kentucky tax withheld and reported for all employees. (4) Information required to be submitted as an attachment to the annual report in a spreadsheet format if not included on Form 42A900 shall include: (a) Each eligible employee's name; (b) Each eligible employee's Social Security number or requested part thereof; (c) Each eligible employee's state of residence; (d) Each eligible employee's hire date; (e) Annual gross or taxable wages per eligible employee as described below: 1. Gross wages shall be used for the KEOZ, KIDA, KIRA, KJRA and KREDA credits; and 2. Taxable wages shall be used for the KBI and KJDA credits; (f) Annual Kentucky income tax withheld per eligible employee; and (g) Annual Kentucky wage assessment credit claimed per eligible employee. (103 KAR 018:180. 33 Ky.R. 1201; 1519; eff. 1-5-2007; 45 Ky.R. 738; eff. 12-7-2018; Crt to Am, filing deadline 5-14-2027.)

defined by KRS 141.019 except: (1) The standard deduction permitted individuals in KRS 141.081 is not allowed; (2) Federal estate tax paid on income accrued at the date of death of a decedent is deductible; (3) Deductions that have been allowed on the Kentucky inheritance tax return or the Kentucky individual income tax return may not be claimed on the fiduciary income tax return; and (4) Any deductions (or federal tax) related to nontaxable income are not allowed.

taxable income except that portion of net income distributable or distributed during the taxable year, and that portion of the net income from intangible personal property attributable to a nonresident beneficiary.

of the distributed or distributable income from a resident or nonresident estate or trust.

income arising from all: (1) Activities carried on in this state, including labor performed or business done in this state; (2) Services performed in this state; (3) Real or tangible property located in this state; or (4) Intangible property that has acquired a business situs in this state.

taxable year from Kentucky sources of $1,200 or more and a nonresident trust with gross income for the taxable year from Kentucky sources of $100 or more shall pay tax on all taxable income from Kentucky sources, except that portion of net income distributable or distributed during the taxable year and that portion of the net income from intangible personal property attributable to a nonresident beneficiary.

derived from Kentucky sources. (103 KAR 019:010. IF-1; 1 Ky.R. 332; eff. 2-5-1975; 45 Ky.R. 1077, 2066; eff. 2-1-2019; 52 Ky.R. 1372; eff. 8-4-2026.) THOMAS B. MILLER, Commissioner APPROVED BY AGENCY: January 8, 2026 FILED WITH LRC: January 13, 2026 at 12:00 p.m. PUBLIC HEARING AND COMMENT PERIOD: A public comment on this administrative regulation shall be held on March 25, 2026, at 10:00 a.m. in Room 11A, State Office Building, 501 High Street, Frankfort, Kentucky 40601. Individuals interested in being heard at this hearing shall notify this agency in writing at least five (5) workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through March 31, 2026. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person. CONTACT PERSON: Gary Morris, Executive Director, Office of Tax Policy and Regulation, Department of Revenue, 501 High Street, Station 1, Frankfort, Kentucky 40601, (502) 564-0424 (telephone), (502) 564-3875 (fax), DORTAXPOLICY@ky.gov (email).