Kentucky Statutes 141.0205 – Priority of application and use of tax credits
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If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax imposed by KRS § 141.020, 141.040, and 141.0401, the priority of application and use of the credits shall be determined as follows:
(1) The nonrefundable business incentive credits against the tax imposed by KRS
141.020 shall be taken in the following order:
(a) The limited liability entity tax credit permitted by KRS § 141.0401;
(b) The economic development credits computed under KRS § 141.347, 141.381,
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and
154.12-2088;
(c) The qualified farming operation credit permitted by KRS § 141.412; (d) The certified rehabilitation credit permitted by KRS § 171.397(1)(a); (e) The health insurance credit permitted by KRS § 141.062;
(f) The tax paid to other states credit permitted by KRS § 141.070;
(g) The credit for hiring the unemployed permitted by KRS § 141.065;
(h) The recycling or composting equipment credit permitted by KRS § 141.390;
(i) The tax credit for cash contributions in investment funds permitted by KRS
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS
154.20-258;
(j) The research facilities credit permitted by KRS § 141.395;
(k) The employer High School Equivalency Diploma program incentive credit permitted under KRS § 151B.402;
(l) The voluntary environmental remediation credit permitted by KRS § 141.418; (m) The biodiesel and renewable diesel credit permitted by KRS § 141.423;
(n) The clean coal incentive credit permitted by KRS § 141.428; (o) The ethanol credit permitted by KRS § 141.4242;
(p) The cellulosic ethanol credit permitted by KRS § 141.4244; (q) The energy efficiency credits permitted by KRS § 141.436;
(r) The railroad maintenance and improvement credit permitted by KRS § 141.385; (s) The Endow Kentucky credit permitted by KRS § 141.438;
(t) The New Markets Development Program credit permitted by KRS § 141.434; (u) The distilled spirits credit permitted by KRS § 141.389;
(v) The angel investor credit permitted by KRS § 141.396;
(w) The film industry credit permitted by KRS § 141.383 for applications approved on or after April 27, 2018, but before January 1, 2022;
(x) The inventory credit permitted by KRS § 141.408; and
(y) The renewable chemical production credit permitted by KRS § 141.4231;
(2) After the application of the nonrefundable credits in subsection (1) of this section, the nonrefundable personal tax credits against the tax imposed by KRS § 141.020 shall be taken in the following order:
(a) The individual credits permitted by KRS § 141.020(3); (b) The credit permitted by KRS § 141.066;
(c) The tuition credit permitted by KRS § 141.069;
(d) The household and dependent care credit permitted by KRS § 141.067; (e) The income gap credit permitted by KRS § 141.066; and
(f) The Education Opportunity Account Program tax credit permitted by KRS
141.522;
(3) After the application of the nonrefundable credits provided for in subsection (2) of this section, the refundable credits against the tax imposed by KRS § 141.020 shall be taken in the following order:
(a) The individual withholding tax credit permitted by KRS § 141.350;
(b) The individual estimated tax payment credit permitted by KRS § 141.305;
(c) The certified rehabilitation credit permitted by KRS § 171.3961, 171.3963, and
171.397(1)(b);
(d) The film industry tax credit permitted by KRS § 141.383 for applications approved prior to April 27, 2018, or on or after January 1, 2022;
(e) The development area tax credit permitted by KRS § 141.398;
(f) The decontamination tax credit permitted by KRS § 141.419; and
(g) The pass-through entity tax credit permitted by KRS § 141.209;
(4) The nonrefundable credit permitted by KRS § 141.0401 shall be applied against the tax imposed by KRS § 141.040;
(5) The following nonrefundable credits shall be applied against the sum of the tax imposed by KRS § 141.040 after subtracting the credit provided for in subsection (4) of this section, and the tax imposed by KRS § 141.0401 in the following order:
(a) The economic development credits computed under KRS § 141.347, 141.381,
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and
154.12-2088;
(b) The qualified farming operation credit permitted by KRS § 141.412; (c) The certified rehabilitation credit permitted by KRS § 171.397(1)(a); (d) The health insurance credit permitted by KRS § 141.062;
(e) The unemployment credit permitted by KRS § 141.065;
(f) The recycling or composting equipment credit permitted by KRS § 141.390; (g) The coal conversion credit permitted by KRS § 141.041;
(h) The enterprise zone credit permitted by KRS § 154.45-090, for taxable periods ending prior to January 1, 2008;
(i) The tax credit for cash contributions to investment funds permitted by KRS
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS
154.20-258;
(j) The research facilities credit permitted by KRS § 141.395;
(k) The employer High School Equivalency Diploma program incentive credit permitted by KRS § 151B.402;
(l) The voluntary environmental remediation credit permitted by KRS § 141.418; (m) The biodiesel and renewable diesel credit permitted by KRS § 141.423;
(n) The clean coal incentive credit permitted by KRS § 141.428; (o) The ethanol credit permitted by KRS § 141.4242;
(p) The cellulosic ethanol credit permitted by KRS § 141.4244; (q) The energy efficiency credits permitted by KRS § 141.436;
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit permitted by KRS § 141.437;
(s) The railroad maintenance and improvement credit permitted by KRS § 141.385; (t) The railroad expansion credit permitted by KRS § 141.386;
(u) The Endow Kentucky credit permitted by KRS § 141.438;
(v) The New Markets Development Program credit permitted by KRS § 141.434; (w) The distilled spirits credit permitted by KRS § 141.389;
(x) The film industry credit permitted by KRS § 141.383 for applications approved on or after April 27, 2018, but before January 1, 2022;
(y) The inventory credit permitted by KRS § 141.408;
(z) The renewable chemical production tax credit permitted by KRS § 141.4231;
and
(aa) The Education Opportunity Account Program tax credit permitted by KRS
141.522; and
(6) After the application of the nonrefundable credits in subsection (5) of this section, the refundable credits shall be taken in the following order:
(a) The corporation estimated tax payment credit permitted by KRS § 141.044;
(b) The certified rehabilitation credit permitted by KRS § 171.3961, 171.3963, and
171.397(1)(b);
(c) The film industry tax credit permitted by KRS § 141.383 for applications approved prior to April 27, 2018, or on or after January 1, 2022;
(d) The decontamination tax credit permitted by KRS § 141.419; and
(e) The pass-through entity tax credit permitted by KRS § 141.209.
Effective: June 29, 2023
History: Amended 2023 Ky. Acts ch. 75, sec. 37, effective June 29, 2023; ch. 92, sec.
22, effective March 24, 2023; and ch. 148, sec. 6, effective March 31, 2023. — Amended 2022 Ky. Acts ch. 212, sec. 54, effective July 14, 2022. — Amended 2021
Ky. Acts ch. 156, sec. 31, effective June 29, 2021; ch. 167, sec. 20, effective June 29,
2021; and ch. 203, sec. 9, effective June 29, 2021. — Amended 2020 Ky. Acts ch. 91, sec. 20, effective April 15, 2020. — Amended 2019 Ky. Acts ch. 146, sec. 9, effective June 27, 2019; and ch. 151, sec. 79, effective June 27, 2019. — Amended
2018 Ky. Acts ch. 171, sec. 105, effective April 14, 2018; ch. 199, sec. 5, effective July 14, 2018; and ch. 207, sec. 105, effective April 27, 2018. — Amended 2017 Ky. Acts ch. 63, sec. 10, effective June 29, 2017. — Amended 2014 Ky. Acts ch. 102, sec. 17, effective July 15, 2014. — Amended 2013 Ky. Acts ch. 59, sec. 46, effective June 25, 2013; and ch. 131, sec. 33, effective June 25, 2013. — Amended 2010 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 15, effective June 4, 2010. — Repealed and
reenacted 2010 Ky. Acts ch. 5, sec. 14, effective February 25, 2010 — Amended
2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 30, effective June 26, 2009. — Amended
2008 Ky. Acts ch. 139, sec. 14, effective July 15, 2008. — Amended 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 27, effective August 30, 2007. — Amended 2007 Ky. Acts ch. 91, sec. 7, effective March 23, 2007. — Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 2, effective June 28, 2006. — Amended 2006 Ky. Acts ch. 6, sec. 13, effective March 4, 2006. — Amended 2005 Ky. Acts ch. 168, sec. 6, effective March
18, 2005. — Amended 2002 Ky. Acts ch. 230, sec. 7, effective July 15, 2002. — Amended 2000 Ky. Acts ch. 320, sec. 2, effective July 14, 2000. — Amended 1998
Ky. Acts ch. 414, sec. 20, effective July 15, 1998; and ch. 499, sec. 6, effective July
15, 1998. — Created 1994 Ky. Acts ch. 57, sec. 1, effective July 15, 1994.
Legislative Research Commission Note (6/29/2023). This statute was amended by 2023
Ky. Acts chs. 75, 92, and 148. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 148, which was last enacted by the General Assembly, prevails under KRS § 446.250.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”
Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 30, provides that this section applies retroactively for taxable years beginning on or after January 1, 2005.
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). This statute applies “to taxable years beginning after December 31, 1993.” 1994 Ky. Acts ch. 57, sec. 4.
(1) The nonrefundable business incentive credits against the tax imposed by KRS
Terms Used In Kentucky Statutes 141.0205
- Individual: means a natural person. See Kentucky Statutes 141.010
- Pass-through entity: means any partnership, S corporation, limited liability company, limited liability partnership, limited partnership, or similar entity recognized by the laws of this state that is not taxed for federal purposes at the entity level, but instead passes to each partner, member, shareholder, or owner their proportionate share of income, deductions, gains, losses, credits, and any other similar attributes. See Kentucky Statutes 141.010
- Statute: A law passed by a legislature.
- Year: means calendar year. See Kentucky Statutes 446.010
141.020 shall be taken in the following order:
(a) The limited liability entity tax credit permitted by KRS § 141.0401;
(b) The economic development credits computed under KRS § 141.347, 141.381,
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and
154.12-2088;
(c) The qualified farming operation credit permitted by KRS § 141.412; (d) The certified rehabilitation credit permitted by KRS § 171.397(1)(a); (e) The health insurance credit permitted by KRS § 141.062;
(f) The tax paid to other states credit permitted by KRS § 141.070;
(g) The credit for hiring the unemployed permitted by KRS § 141.065;
(h) The recycling or composting equipment credit permitted by KRS § 141.390;
(i) The tax credit for cash contributions in investment funds permitted by KRS
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS
154.20-258;
(j) The research facilities credit permitted by KRS § 141.395;
(k) The employer High School Equivalency Diploma program incentive credit permitted under KRS § 151B.402;
(l) The voluntary environmental remediation credit permitted by KRS § 141.418; (m) The biodiesel and renewable diesel credit permitted by KRS § 141.423;
(n) The clean coal incentive credit permitted by KRS § 141.428; (o) The ethanol credit permitted by KRS § 141.4242;
(p) The cellulosic ethanol credit permitted by KRS § 141.4244; (q) The energy efficiency credits permitted by KRS § 141.436;
(r) The railroad maintenance and improvement credit permitted by KRS § 141.385; (s) The Endow Kentucky credit permitted by KRS § 141.438;
(t) The New Markets Development Program credit permitted by KRS § 141.434; (u) The distilled spirits credit permitted by KRS § 141.389;
(v) The angel investor credit permitted by KRS § 141.396;
(w) The film industry credit permitted by KRS § 141.383 for applications approved on or after April 27, 2018, but before January 1, 2022;
(x) The inventory credit permitted by KRS § 141.408; and
(y) The renewable chemical production credit permitted by KRS § 141.4231;
(2) After the application of the nonrefundable credits in subsection (1) of this section, the nonrefundable personal tax credits against the tax imposed by KRS § 141.020 shall be taken in the following order:
(a) The individual credits permitted by KRS § 141.020(3); (b) The credit permitted by KRS § 141.066;
(c) The tuition credit permitted by KRS § 141.069;
(d) The household and dependent care credit permitted by KRS § 141.067; (e) The income gap credit permitted by KRS § 141.066; and
(f) The Education Opportunity Account Program tax credit permitted by KRS
141.522;
(3) After the application of the nonrefundable credits provided for in subsection (2) of this section, the refundable credits against the tax imposed by KRS § 141.020 shall be taken in the following order:
(a) The individual withholding tax credit permitted by KRS § 141.350;
(b) The individual estimated tax payment credit permitted by KRS § 141.305;
(c) The certified rehabilitation credit permitted by KRS § 171.3961, 171.3963, and
171.397(1)(b);
(d) The film industry tax credit permitted by KRS § 141.383 for applications approved prior to April 27, 2018, or on or after January 1, 2022;
(e) The development area tax credit permitted by KRS § 141.398;
(f) The decontamination tax credit permitted by KRS § 141.419; and
(g) The pass-through entity tax credit permitted by KRS § 141.209;
(4) The nonrefundable credit permitted by KRS § 141.0401 shall be applied against the tax imposed by KRS § 141.040;
(5) The following nonrefundable credits shall be applied against the sum of the tax imposed by KRS § 141.040 after subtracting the credit provided for in subsection (4) of this section, and the tax imposed by KRS § 141.0401 in the following order:
(a) The economic development credits computed under KRS § 141.347, 141.381,
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12-207, and
154.12-2088;
(b) The qualified farming operation credit permitted by KRS § 141.412; (c) The certified rehabilitation credit permitted by KRS § 171.397(1)(a); (d) The health insurance credit permitted by KRS § 141.062;
(e) The unemployment credit permitted by KRS § 141.065;
(f) The recycling or composting equipment credit permitted by KRS § 141.390; (g) The coal conversion credit permitted by KRS § 141.041;
(h) The enterprise zone credit permitted by KRS § 154.45-090, for taxable periods ending prior to January 1, 2008;
(i) The tax credit for cash contributions to investment funds permitted by KRS
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS
154.20-258;
(j) The research facilities credit permitted by KRS § 141.395;
(k) The employer High School Equivalency Diploma program incentive credit permitted by KRS § 151B.402;
(l) The voluntary environmental remediation credit permitted by KRS § 141.418; (m) The biodiesel and renewable diesel credit permitted by KRS § 141.423;
(n) The clean coal incentive credit permitted by KRS § 141.428; (o) The ethanol credit permitted by KRS § 141.4242;
(p) The cellulosic ethanol credit permitted by KRS § 141.4244; (q) The energy efficiency credits permitted by KRS § 141.436;
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit permitted by KRS § 141.437;
(s) The railroad maintenance and improvement credit permitted by KRS § 141.385; (t) The railroad expansion credit permitted by KRS § 141.386;
(u) The Endow Kentucky credit permitted by KRS § 141.438;
(v) The New Markets Development Program credit permitted by KRS § 141.434; (w) The distilled spirits credit permitted by KRS § 141.389;
(x) The film industry credit permitted by KRS § 141.383 for applications approved on or after April 27, 2018, but before January 1, 2022;
(y) The inventory credit permitted by KRS § 141.408;
(z) The renewable chemical production tax credit permitted by KRS § 141.4231;
and
(aa) The Education Opportunity Account Program tax credit permitted by KRS
141.522; and
(6) After the application of the nonrefundable credits in subsection (5) of this section, the refundable credits shall be taken in the following order:
(a) The corporation estimated tax payment credit permitted by KRS § 141.044;
(b) The certified rehabilitation credit permitted by KRS § 171.3961, 171.3963, and
171.397(1)(b);
(c) The film industry tax credit permitted by KRS § 141.383 for applications approved prior to April 27, 2018, or on or after January 1, 2022;
(d) The decontamination tax credit permitted by KRS § 141.419; and
(e) The pass-through entity tax credit permitted by KRS § 141.209.
Effective: June 29, 2023
History: Amended 2023 Ky. Acts ch. 75, sec. 37, effective June 29, 2023; ch. 92, sec.
22, effective March 24, 2023; and ch. 148, sec. 6, effective March 31, 2023. — Amended 2022 Ky. Acts ch. 212, sec. 54, effective July 14, 2022. — Amended 2021
Ky. Acts ch. 156, sec. 31, effective June 29, 2021; ch. 167, sec. 20, effective June 29,
2021; and ch. 203, sec. 9, effective June 29, 2021. — Amended 2020 Ky. Acts ch. 91, sec. 20, effective April 15, 2020. — Amended 2019 Ky. Acts ch. 146, sec. 9, effective June 27, 2019; and ch. 151, sec. 79, effective June 27, 2019. — Amended
2018 Ky. Acts ch. 171, sec. 105, effective April 14, 2018; ch. 199, sec. 5, effective July 14, 2018; and ch. 207, sec. 105, effective April 27, 2018. — Amended 2017 Ky. Acts ch. 63, sec. 10, effective June 29, 2017. — Amended 2014 Ky. Acts ch. 102, sec. 17, effective July 15, 2014. — Amended 2013 Ky. Acts ch. 59, sec. 46, effective June 25, 2013; and ch. 131, sec. 33, effective June 25, 2013. — Amended 2010 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 15, effective June 4, 2010. — Repealed and
reenacted 2010 Ky. Acts ch. 5, sec. 14, effective February 25, 2010 — Amended
2009 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 30, effective June 26, 2009. — Amended
2008 Ky. Acts ch. 139, sec. 14, effective July 15, 2008. — Amended 2007 (2d Extra. Sess.) Ky. Acts ch. 1, sec. 27, effective August 30, 2007. — Amended 2007 Ky. Acts ch. 91, sec. 7, effective March 23, 2007. — Amended 2006 (1st Extra. Sess.) Ky. Acts ch. 2, sec. 2, effective June 28, 2006. — Amended 2006 Ky. Acts ch. 6, sec. 13, effective March 4, 2006. — Amended 2005 Ky. Acts ch. 168, sec. 6, effective March
18, 2005. — Amended 2002 Ky. Acts ch. 230, sec. 7, effective July 15, 2002. — Amended 2000 Ky. Acts ch. 320, sec. 2, effective July 14, 2000. — Amended 1998
Ky. Acts ch. 414, sec. 20, effective July 15, 1998; and ch. 499, sec. 6, effective July
15, 1998. — Created 1994 Ky. Acts ch. 57, sec. 1, effective July 15, 1994.
Legislative Research Commission Note (6/29/2023). This statute was amended by 2023
Ky. Acts chs. 75, 92, and 148. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 148, which was last enacted by the General Assembly, prevails under KRS § 446.250.
Legislative Research Commission Note (6/28/2006). 2006 (1st Extra Sess.) Ky. Acts ch. 2, sec. 73, provides that “unless a provision of this Act specifically applies to an earlier tax year, the provisions of this Act shall apply to taxable years beginning on or after January 1, 2007.”
Legislative Research Commission Note (3/6/2006). 2006 Ky. Acts ch. 6, sec. 30, provides that this section applies retroactively for taxable years beginning on or after January 1, 2005.
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). This statute applies “to taxable years beginning after December 31, 1993.” 1994 Ky. Acts ch. 57, sec. 4.