Kentucky Statutes 141.066 – Definitions — Nonrefundable low income, family size, and income gap tax credits
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(1) As used in this section:
(a) “Federal poverty level” means the Health and Human Services poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. § 9902(2) and available on June 30 of the taxable year;
(b) “Qualifying dependent” means a qualifying child as defined in the 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;
(c) “Qualifying individual” means an individual whose filing status is single or married filing separately if during the taxable year the individual’s spouse is not a member of the household;
(d) “Qualifying married couple” means a husband and wife living together who file a joint return or separately on a combined return. “Marital status” shall have the same meaning as defined in Section 7703 of the Internal Revenue Code; and
(e) “Threshold amount” means:
1. For a qualifying individual with no qualifying dependent children, the federal poverty level established for a family unit size of one (1):
2. For a qualifying individual with one (1) qualifying dependent child or a qualifying married couple with no qualifying dependent children, the federal poverty level established for a family unit size of two (2);
3. For a qualifying individual with two (2) qualifying dependent children or a qualifying married couple with one (1) qualifying dependent child, the federal poverty level established for a family unit size of three (3);
4. For a qualifying individual with (3) or more qualifying dependent children or a qualifying married couple with two (2) or more qualifying dependent children, the federal poverty level established for a family unit size of four (4).
(2) (a) For taxable years beginning before January 1, 2005, a resident individual whose adjusted gross income does not exceed the amounts set out in paragraph (c) of this subsection shall be eligible for a nonrefundable “low income” tax credit. The credit shall be applied against the taxpayer’s tax liability calculated under KRS § 141.020, and shall be taken in the order established by KRS § 141.0205.
(b) For a husband and wife filing jointly, the “low income” tax credit shall be computed on the basis of their joint adjusted gross income and shall be applied against their joint tax liability. For a husband and wife living together, whether filing separate returns or filing separately on a combined return, the “low income” credit shall be computed on the basis of their combined adjusted gross income, except that a separately computed gross income of less than
zero shall be treated as zero, and shall be applied against their combined tax liability.
(c) The “low income” tax credit shall be computed as follows: PERCENT OF TAX
AMOUNT OF ADJUSTED LIABILITY ALLOWED AS GROSS INCOME LOW INCOME TAX CREDIT
not over $5,000 100% over $ 5,000 but not over $10,000 50% over $10,000 but not over $15,000 25% over $15,000 but not over $20,000 15% over $20,000 but not over $25,000 5% over $25,000 -0-
(3) (a) For taxable years beginning after December 31, 2004, qualifying taxpayers whose modified gross income is below one hundred thirty-three percent (133%) of the threshold amount shall be entitled to a nonrefundable family size tax credit. The family size tax credit shall be applied against the taxpayer’s tax liability calculated under KRS § 141.020. The family size tax credit shall not reduce the taxpayer’s tax liability below zero.
(b) For qualifying taxpayers whose modified gross income is equal to or below one hundred percent (100%) of the threshold amount, the family size tax credit shall be equal to the taxpayer’s tax liability.
(c) For qualifying taxpayers whose modified gross income exceeds the threshold amount but is below one hundred thirty-three percent (133%) of the threshold amount, the family size tax credit shall be equal to the amount of the taxpayer’s individual income tax liability multiplied by a percentage as follows:
1. If modified gross income is above one hundred percent (100%) but less than or equal to one hundred four percent (104%) of the threshold amount, the credit percentage shall be ninety percent (90%);
2. If modified gross income is above one hundred four percent (104%) but less than or equal to one hundred eight percent (108%) of the threshold amount, the credit percentage shall be eighty percent (80%);
3. If modified gross income is above one hundred eight percent (108%) but less than or equal to one hundred twelve percent (112%) of the threshold amount, the credit percentage shall be seventy percent (70%);
4. If modified gross income is above one hundred twelve percent (112%) but less than or equal to one hundred sixteen percent (116%) of the threshold amount, the credit percentage shall be sixty percent (60%);
5. If modified gross income is above one hundred sixteen percent (116%) but less than or equal to one hundred twenty percent (120%) of the threshold amount, the credit percentage shall be fifty percent (50%);
6. If modified gross income is above one hundred twenty percent (120%)
but less than or equal to one hundred twenty-four percent (124%) of the
threshold amount, the credit percentage shall be forty percent (40%);
7. If modified gross income is above one hundred twenty-four percent (124%) but less than or equal to one hundred twenty-seven percent (127%) of the threshold amount, the credit percentage shall be thirty percent (30%);
8. If modified gross income is above one hundred twenty-seven percent (127%) but less than or equal to one hundred thirty percent (130%) of the threshold amount, the credit percentage shall be twenty percent (20%);
9. If modified gross income is above one hundred thirty percent (130%) but less than or equal to one hundred thirty-three percent (133%) of the threshold amount, the credit percentage shall be ten percent (10%);
10. If modified gross income is above one hundred thirty-three percent
(133%) of the threshold amount, the credit percentage shall be zero.
(d) For taxable years beginning on or after January 1, 2019, but before January 1,
2021, in addition to the credit calculated under paragraphs (a), (b), and (c) of this subsection, the income gap credit shall be allowed:
1. If modified gross income is above one hundred percent (100%) but less than or equal to one hundred four percent (104%) of the threshold amount, the credit shall be in an amount equal to:
a. Eleven dollars ($11) for a family size of one (1);
b. Seven dollars ($7) for a family size of two (2); and c. Three dollars ($3) for a family size of three (3);
2. If modified gross income is above one hundred four percent (104%) but less than or equal to one hundred eight percent (108%) of the threshold amount, the credit shall be in an amount equal to:
a. Twenty dollars ($20) for a family size of one (1);
b. Thirteen dollars ($13) for a family size of two (2); and c. Six dollars ($6) for a family size of three (3);
3. If modified gross income is above one hundred eight percent (108%) but less than or equal to one hundred twelve percent (112%) of the threshold amount, the credit shall be in an amount equal to:
a. Twenty-nine dollars ($29) for a family size of one (1); b. Eighteen dollars ($18) for a family size of two (2); and c. Six dollars ($6) for a family size of three (3);
4. If modified gross income is above one hundred twelve percent (112%) but less than or equal to one hundred sixteen percent (116%) of the threshold amount, the credit shall be in an amount equal to:
a. Thirty-seven dollars ($37) for a family size of one (1);
b. Twenty-two dollars ($22) for a family size of two (2); and c. Six dollars ($6) for a family size of three (3);
5. If modified gross income is above one hundred sixteen percent (116%) but less than or equal to one hundred twenty percent (120%) of the threshold amount, the credit shall be in an amount equal to:
a. Forty-five dollars ($45) for a family size of one (1);
b. Twenty-four dollars ($24) for a family size of two (2); and c. Four dollars ($4) for a family size of three (3);
6. If modified gross income is above one hundred twenty percent (120%) but less than or equal to one hundred twenty-four percent (124%) of the threshold amount, the credit shall be in an amount equal to:
a. Fifty-one dollars ($51) for a family size of one (1); and b. Twenty-six dollars ($26) for a family size of two (2);
7. If modified gross income is above one hundred twenty-four percent (124%) but less than or equal to one hundred twenty-seven percent (127%) of the threshold amount, the credit shall be in an amount equal to:
a. Fifty-eight dollars ($58) for a family size of one (1); and b. Twenty-seven dollars ($27) for a family size of two (2);
8. If modified gross income is above one hundred twenty-seven percent (127%) but less than or equal to one hundred thirty percent (130%) of the threshold amount, the credit shall be in an amount equal to:
a. Sixty-four dollars ($64) for a family size of one (1); and
b. Twenty-eight dollars ($28) for a family size of two (2); and
9. If modified gross income is above one hundred thirty percent (130%) but less than or equal to one hundred thirty-three percent (133%) of the threshold amount, the credit shall be in an amount equal to:
a. Sixty-nine dollars ($69) for a family size of one (1); and b. Twenty-eight dollars ($28) for a family size of two (2).
(4) For a qualifying married couple filing jointly, the family size tax credit shall be computed on the basis of their joint modified gross income and shall be applied against their joint tax liability. For a qualifying married couple living together, whether filing separate returns or filing separately on a combined return, the family size tax credit shall be computed on the basis of their combined modified gross income, except that a separately computed modified gross income of less than zero shall be treated as zero, and shall be applied against their combined tax liability.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 151, sec. 43, effective June 27, 2019. — Amended
2005 Ky. Acts ch. 168, sec. 9, effective March 18, 2005. — Amended 1994 Ky. Acts ch. 57, sec. 3, effective July 15, 1994. “” Amended 1992 Ky. Acts ch. 52, sec. 1, effective July 14, 1992; and ch. 105, sec. 72, effective July 14, 1992. — Created 1990
Ky. Acts ch. 476, Pt. VII D, sec. 638, effective April 11, 1990.
Legislative Research Commission Note (6/27/2019). Section 88 of 2019 Ky. Acts 151 reads as follows: “It is the intent of the General Assembly to study the long-term impact of the income tax on certain family-size households and to extend the
provisions of Section 43 of this Act [this statute] or find a permanent alternative to those provisions.”
Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.
Legislative Research Commission Note (7/15/1994). The changes to this statute from
1994 Ky. Acts ch. 57 apply “to taxable years beginning after December 31, 1993.”
1994 Ky. Acts ch. 57, sec. 4.
(a) “Federal poverty level” means the Health and Human Services poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services under the authority of 42 U.S.C. § 9902(2) and available on June 30 of the taxable year;
Terms Used In Kentucky Statutes 141.066
- Department: means the Department of Revenue. See Kentucky Statutes 141.010
- Dependent: A person dependent for support upon another.
- Dependent: means those persons defined as dependents in the Internal Revenue
Code. See Kentucky Statutes 141.010 - Federal: refers to the United States. See Kentucky Statutes 446.010
- Individual: means a natural person. See Kentucky Statutes 141.010
- Internal Revenue Code: means for taxable years beginning on or after January 1,
2023, the Internal Revenue Code in effect on December 31, 2022, exclusive of any amendments made subsequent to that date, other than amendments that extend provisions in effect on December 31, 2022, that would otherwise terminate. See Kentucky Statutes 141.010 - Modified gross income: means the greater of:
(a) Adjusted gross income as defined in 26 U. See Kentucky Statutes 141.010 - Resident: means an individual domiciled within this state or an individual who is not domiciled in this state, but maintains a place of abode in this state and spends in the aggregate more than one hundred eighty-three (183) days of the taxable year in this state. See Kentucky Statutes 141.010
- Statute: A law passed by a legislature.
- Taxable year: means the calendar year or fiscal year ending during such calendar year, upon the basis of which net income is computed, and in the case of a return made for a fractional part of a year under the provisions of this chapter or under administrative regulations prescribed by the commissioner, "taxable year" means the period for which the return is made. See Kentucky Statutes 141.010
- Year: means calendar year. See Kentucky Statutes 446.010
(b) “Qualifying dependent” means a qualifying child as defined in the 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;
(c) “Qualifying individual” means an individual whose filing status is single or married filing separately if during the taxable year the individual’s spouse is not a member of the household;
(d) “Qualifying married couple” means a husband and wife living together who file a joint return or separately on a combined return. “Marital status” shall have the same meaning as defined in Section 7703 of the Internal Revenue Code; and
(e) “Threshold amount” means:
1. For a qualifying individual with no qualifying dependent children, the federal poverty level established for a family unit size of one (1):
2. For a qualifying individual with one (1) qualifying dependent child or a qualifying married couple with no qualifying dependent children, the federal poverty level established for a family unit size of two (2);
3. For a qualifying individual with two (2) qualifying dependent children or a qualifying married couple with one (1) qualifying dependent child, the federal poverty level established for a family unit size of three (3);
4. For a qualifying individual with (3) or more qualifying dependent children or a qualifying married couple with two (2) or more qualifying dependent children, the federal poverty level established for a family unit size of four (4).
(2) (a) For taxable years beginning before January 1, 2005, a resident individual whose adjusted gross income does not exceed the amounts set out in paragraph (c) of this subsection shall be eligible for a nonrefundable “low income” tax credit. The credit shall be applied against the taxpayer’s tax liability calculated under KRS § 141.020, and shall be taken in the order established by KRS § 141.0205.
(b) For a husband and wife filing jointly, the “low income” tax credit shall be computed on the basis of their joint adjusted gross income and shall be applied against their joint tax liability. For a husband and wife living together, whether filing separate returns or filing separately on a combined return, the “low income” credit shall be computed on the basis of their combined adjusted gross income, except that a separately computed gross income of less than
zero shall be treated as zero, and shall be applied against their combined tax liability.
(c) The “low income” tax credit shall be computed as follows: PERCENT OF TAX
AMOUNT OF ADJUSTED LIABILITY ALLOWED AS GROSS INCOME LOW INCOME TAX CREDIT
not over $5,000 100% over $ 5,000 but not over $10,000 50% over $10,000 but not over $15,000 25% over $15,000 but not over $20,000 15% over $20,000 but not over $25,000 5% over $25,000 -0-
(3) (a) For taxable years beginning after December 31, 2004, qualifying taxpayers whose modified gross income is below one hundred thirty-three percent (133%) of the threshold amount shall be entitled to a nonrefundable family size tax credit. The family size tax credit shall be applied against the taxpayer’s tax liability calculated under KRS § 141.020. The family size tax credit shall not reduce the taxpayer’s tax liability below zero.
(b) For qualifying taxpayers whose modified gross income is equal to or below one hundred percent (100%) of the threshold amount, the family size tax credit shall be equal to the taxpayer’s tax liability.
(c) For qualifying taxpayers whose modified gross income exceeds the threshold amount but is below one hundred thirty-three percent (133%) of the threshold amount, the family size tax credit shall be equal to the amount of the taxpayer’s individual income tax liability multiplied by a percentage as follows:
1. If modified gross income is above one hundred percent (100%) but less than or equal to one hundred four percent (104%) of the threshold amount, the credit percentage shall be ninety percent (90%);
2. If modified gross income is above one hundred four percent (104%) but less than or equal to one hundred eight percent (108%) of the threshold amount, the credit percentage shall be eighty percent (80%);
3. If modified gross income is above one hundred eight percent (108%) but less than or equal to one hundred twelve percent (112%) of the threshold amount, the credit percentage shall be seventy percent (70%);
4. If modified gross income is above one hundred twelve percent (112%) but less than or equal to one hundred sixteen percent (116%) of the threshold amount, the credit percentage shall be sixty percent (60%);
5. If modified gross income is above one hundred sixteen percent (116%) but less than or equal to one hundred twenty percent (120%) of the threshold amount, the credit percentage shall be fifty percent (50%);
6. If modified gross income is above one hundred twenty percent (120%)
but less than or equal to one hundred twenty-four percent (124%) of the
threshold amount, the credit percentage shall be forty percent (40%);
7. If modified gross income is above one hundred twenty-four percent (124%) but less than or equal to one hundred twenty-seven percent (127%) of the threshold amount, the credit percentage shall be thirty percent (30%);
8. If modified gross income is above one hundred twenty-seven percent (127%) but less than or equal to one hundred thirty percent (130%) of the threshold amount, the credit percentage shall be twenty percent (20%);
9. If modified gross income is above one hundred thirty percent (130%) but less than or equal to one hundred thirty-three percent (133%) of the threshold amount, the credit percentage shall be ten percent (10%);
10. If modified gross income is above one hundred thirty-three percent
(133%) of the threshold amount, the credit percentage shall be zero.
(d) For taxable years beginning on or after January 1, 2019, but before January 1,
2021, in addition to the credit calculated under paragraphs (a), (b), and (c) of this subsection, the income gap credit shall be allowed:
1. If modified gross income is above one hundred percent (100%) but less than or equal to one hundred four percent (104%) of the threshold amount, the credit shall be in an amount equal to:
a. Eleven dollars ($11) for a family size of one (1);
b. Seven dollars ($7) for a family size of two (2); and c. Three dollars ($3) for a family size of three (3);
2. If modified gross income is above one hundred four percent (104%) but less than or equal to one hundred eight percent (108%) of the threshold amount, the credit shall be in an amount equal to:
a. Twenty dollars ($20) for a family size of one (1);
b. Thirteen dollars ($13) for a family size of two (2); and c. Six dollars ($6) for a family size of three (3);
3. If modified gross income is above one hundred eight percent (108%) but less than or equal to one hundred twelve percent (112%) of the threshold amount, the credit shall be in an amount equal to:
a. Twenty-nine dollars ($29) for a family size of one (1); b. Eighteen dollars ($18) for a family size of two (2); and c. Six dollars ($6) for a family size of three (3);
4. If modified gross income is above one hundred twelve percent (112%) but less than or equal to one hundred sixteen percent (116%) of the threshold amount, the credit shall be in an amount equal to:
a. Thirty-seven dollars ($37) for a family size of one (1);
b. Twenty-two dollars ($22) for a family size of two (2); and c. Six dollars ($6) for a family size of three (3);
5. If modified gross income is above one hundred sixteen percent (116%) but less than or equal to one hundred twenty percent (120%) of the threshold amount, the credit shall be in an amount equal to:
a. Forty-five dollars ($45) for a family size of one (1);
b. Twenty-four dollars ($24) for a family size of two (2); and c. Four dollars ($4) for a family size of three (3);
6. If modified gross income is above one hundred twenty percent (120%) but less than or equal to one hundred twenty-four percent (124%) of the threshold amount, the credit shall be in an amount equal to:
a. Fifty-one dollars ($51) for a family size of one (1); and b. Twenty-six dollars ($26) for a family size of two (2);
7. If modified gross income is above one hundred twenty-four percent (124%) but less than or equal to one hundred twenty-seven percent (127%) of the threshold amount, the credit shall be in an amount equal to:
a. Fifty-eight dollars ($58) for a family size of one (1); and b. Twenty-seven dollars ($27) for a family size of two (2);
8. If modified gross income is above one hundred twenty-seven percent (127%) but less than or equal to one hundred thirty percent (130%) of the threshold amount, the credit shall be in an amount equal to:
a. Sixty-four dollars ($64) for a family size of one (1); and
b. Twenty-eight dollars ($28) for a family size of two (2); and
9. If modified gross income is above one hundred thirty percent (130%) but less than or equal to one hundred thirty-three percent (133%) of the threshold amount, the credit shall be in an amount equal to:
a. Sixty-nine dollars ($69) for a family size of one (1); and b. Twenty-eight dollars ($28) for a family size of two (2).
(4) For a qualifying married couple filing jointly, the family size tax credit shall be computed on the basis of their joint modified gross income and shall be applied against their joint tax liability. For a qualifying married couple living together, whether filing separate returns or filing separately on a combined return, the family size tax credit shall be computed on the basis of their combined modified gross income, except that a separately computed modified gross income of less than zero shall be treated as zero, and shall be applied against their combined tax liability.
Effective: June 27, 2019
History: Amended 2019 Ky. Acts ch. 151, sec. 43, effective June 27, 2019. — Amended
2005 Ky. Acts ch. 168, sec. 9, effective March 18, 2005. — Amended 1994 Ky. Acts ch. 57, sec. 3, effective July 15, 1994. “” Amended 1992 Ky. Acts ch. 52, sec. 1, effective July 14, 1992; and ch. 105, sec. 72, effective July 14, 1992. — Created 1990
Ky. Acts ch. 476, Pt. VII D, sec. 638, effective April 11, 1990.
Legislative Research Commission Note (6/27/2019). Section 88 of 2019 Ky. Acts 151 reads as follows: “It is the intent of the General Assembly to study the long-term impact of the income tax on certain family-size households and to extend the
provisions of Section 43 of this Act [this statute] or find a permanent alternative to those provisions.”
Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.
Legislative Research Commission Note (7/15/1994). The changes to this statute from
1994 Ky. Acts ch. 57 apply “to taxable years beginning after December 31, 1993.”
1994 Ky. Acts ch. 57, sec. 4.