2021 ProSeries/Kentucky Readme
Release 2021.410
Contents
Items addressed in this release
Items addressed in previous releases
What's new for ProSeries/Kentucky
Forms
Electronic filing
Items addressed in this release
Items addressed in previous releases
- Form 8582-K: Smart worksheet added to capture prior year CRD loss carryover.
- Federal Form 8915-F. Updates in relation to Federal Form 8915-F have been finalized
- Form 8582-K, Kentucky Passive Activity Loss Limitations: Part IX, Activities With Losses
Reported on Two or More Forms or Schedules is not eligible for electronic filing.
- Form 2441-K, Part I, line 1, Column A: An additional correction was implemented to enable electronic
filing for those filing Form 2441-K without Care Provider Information.
- Form 740-NP, Schedule A, line 6: A correction was implemented to properly calculate the deduction for
Qualified Mortgage Insurance Premiums.
- Form 2441-K, Part I, line 1, Column A: A correction was implemented to enable electronic filing for filers
that are reporting Taxable Dependent Care Benefits only.
The following forms were enabled for filing in previous releases of ProSeries/Kentucky:
- Form 740-ES, Individual Income Tax Estimated Payments
- Form 740-NP, Individual Income Tax Return, Nonresident or Part-Year Resident
- Form 740-NP, Schedule A, Kentucky Itemized Deductions, Nonresident or Part-Year Resident
- Form 62A500, Tangible Personal Property Tax Return
- Form 62A500-A, Tangible Personal Property Tax Return (Aircraft Assessments Only)
- Form 62A500-W, Tangible Personal Property Tax Return (Documented Watercraft)
- Form 228, Net Profits License Fee Return
What's new for ProSeries/Kentucky
The following items are new for tax year 2021:
- Standard Deduction -
Kentucky's Standard Deduction for individual income tax is $2,690.
- Family Size Tax Credit -
This credit provides benefit to individuals and families at
incomes up to 133 percent of the threshold amount based on the federal poverty level. The 2021
threshold amount is $12,880 for a family size of one, $17,420 for a family of two, $21,960 for
a family of three, and $26,500 for a family size of four or more.
- Income Gap Tax Credit -
This credit has expired. It was only available for tax years 2019 and 2020.
- New Form 2441-K, Child and Dependent Care Credit -
Kentucky does not conform to the federal American Rescue Plan (ARP) of 2021, which enhanced
the federal child and dependent care credit. The ARP increased the amount of child and dependent
care credit, made the credit refundable, increased the percentages of employment-related expenses
for qualifying care considered in calculating the credit, and modified the phase-out of the credit
for higher income earners. Since Kentucky conforms to the Internal Revenue Code as of December 31,
2018, Kentucky did not adopt these federal changes. A new form 2441-K was created to calculate the
allowable Kentucky child and dependent care credit.
- Kentucky 8863-K, Kentucky Education and Tuition Tax Credit -
Kentucky does not conform to the federal Consolidated Appropriations Act of 2021, which (CAA)
made changes to the federal lifetime learning credit. The CAA increased the phase out limits when
calculating the federal lifetime learning credit. Since Kentucky conforms to the Internal Revenue
Code as of December 31, 2018, Kentucky Form 8863-K was updated to add lines 9(a) through 9(e) using
the phase out limits in effect as of Kentucky's IRC conformity date for the Kentucky lifetime
learning credit.
- PPP Loans and EIDL Grants and Advances -
Expenses paid with proceeds from forgiven Paycheck Protection Program (PPP) loans or Economic
Injury Disaster Loans (EIDL) grants and advances are authorized to be deducted for Kentucky income
tax purposes and federal income tax purposes. 2021 House Bill 278 updated KRS 141.019 to allow the
same treatment afforded by Pub. L. No. 116-260, sec. 276 and sec. 278, related to the tax treatment
of forgiven covered loans, deductions attributable to those loans, and tax attributes associated
with those loans for taxable years ending on or after March 27, 2020, but before January 1, 2022.
Loans forgiven under the CARES Act PPP and EIDL grants and advances that are excluded from gross
income for federal income tax purposes are also excluded for Kentucky income tax purposes.
- Renewable Chemical Production Tax Credit -
For taxable years beginning on or after January 1, 2021, and ending on or before December 31, 2024,
a nonrefundable and nontransferable credit allowed against the taxes imposed by KRS 141.020 or KRS
141.040 and KRS 141.0401 is available for taxpayers that produce renewable chemicals. Preliminary
approval is obtained through the Department of Agriculture. Schedule CHEM is due to the Department
of Revenue by March 1 each year. The Department of Revenue will issue the credit certificate
(Schedule CHEM) by April 15 each year. The annual biodiesel, renewable diesel, and renewable chemical
production tax credit cap is $10,000,000 annually. There is a carryforward of three (3) years for
any unused credit. The credit certificate must be attached to the tax return claiming the credit
per KRS 141.4231 and KRS 246.700(8).
- HB 563 - Education Opportunity Account Program -
Pursuant to Franklin Circuit Court's October 8, 2021 Opinion and Order addressing a challenge to
the constitutionality of HB 563, which, in part, established a tax credit for a limited pool of
Kentuckians to pay for private school tuition, the Department of Revenue was ordered to cease
administering the programs established by the bill. Accordingly, the Department of Revenue shall
not approve the creation or operation of any Account-Granting Organizations, the establishment of
any Educational Opportunity Accounts, or grant any tax credits to fund such organizations and
accounts under the legislation enacted in House Bill 563. See KRS 141.500 et seq.
- Disaster Response Employees/Businesses -
2021 House Bill 84 provides an exemption for qualified disaster response employees and disaster
response businesses from income tax for tax years beginning on or after January 1,2021 but before
January 1, 2025. A disaster response business is exempt from income tax under KRS 141.040
(corporations) and KRS 141.020 (sole proprietorships) if the disaster response business has no
presence in Kentucky and conducts no business in Kentucky, except for disaster or emergency-related
work during a disaster response period, whose services are requested by a registered business or by
a state or local government for purposes of performing disaster or emergency-related work in Kentucky
during a disaster period and has no registrations, tax filings or nexus in Kentucky other than
disaster or emergency-related work during the calendar year immediately preceding the declared state
disaster or emergency. Disaster response employees are exempt from individual income tax if the
employee does not work or reside in Kentucky, except for disaster or emergency-related work during
the disaster response period. Disaster or emergency-related work means repairing, renovating,
installing, building, or rendering services that are essential to the restoration of critical
infrastructure that has been damaged, impaired, or destroyed by a declared state disaster or
emergency. The disaster or emergency-related work must take place up to 10 days prior and up to
30 days after the declared state disaster or emergency ("the disaster response period"). NOTE: This
exemption does not apply to the LLET or to taxes imposed under KRS 141.206 on pass-through entities,
such as nonresident withholding.
Forms
Kentucky returns can be filed in this version of ProSeries/Kentucky.
Electronic Filing
You can file returns electronically with this version of ProSeries/Kentucky.
For a list of forms that can be e-filed go to What's New This Year in Help Center.
End of ReadMe file for ProSeries/Kentucky