SB 12 — AN ACT relating to the Kentucky child tax credit.

Summary

Create a new section of KRS Chapter 141 to establish a refundable Kentucky child tax credit for taxpayers with qualifying children under the age of six; authorize a maximum credit of $1,000 per qualifying child for individuals with income below $50,000 for single taxpayers and $100,000 for married taxpayers filing jointly; provide that individuals with incomes above the specified thresholds may be eligible for a reduced child tax credit; amend KRS 141.0205 to order the tax credit; amend KRS 131.190 to allow the Department of Revenue to report on the tax credit.

Bill Text

• Introduced View text Current pdf

Compared against the Kentucky Revised Statutes as published AI-generated reading aid — verify against the official bill.

The bill creates a new refundable child tax credit for certain qualifying taxpayers in Kentucky and amends the priority of tax credits.

• As used in this section, "qualifying child" has the same meaning as in Section 152 of the Internal Revenue Code, but only includes individuals under the age of six (6) at the end of the taxable year for purposes of the Kentucky child tax credit permitted by this section.

  Defines what qualifies as a 'qualifying child' for the new tax credit.

• For taxable years beginning on or after January 1, 2025, but before January 1, 2029, taxpayers may claim a refundable child tax credit against the tax imposed under KRS 141.020, with the ordering of the tax credit as provided in Section 2 of this Act.

  Establishes a refundable child tax credit for specific taxable years.

• Part-year resident taxpayers shall be allowed a prorated Kentucky child tax credit based upon their portion of Kentucky adjusted gross income as determined by KRS 141.019 to their adjusted gross income as defined in Section 62 of the Internal Revenue Code.

  Allows part-year residents to claim a prorated version of the child tax credit.

• The maximum amount of the credit that may be claimed under this section shall be determined under paragraphs (b) and (c) of this subsection.

  Sets conditions for determining the maximum child tax credit amount.

• Individuals with modified gross incomes of less than: 1. Fifty thousand dollars ($50,000) for single taxpayers or taxpayers filing a separate return; or 2. One hundred thousand dollars ($100,000) for married taxpayers filing separately on a combined form or a joint tax return; shall be eligible for a credit of one thousand dollars ($1,000) per qualifying child.

  Establishes income thresholds and credit amounts for the child tax credit.

• Individuals with modified gross incomes in excess of the thresholds set forth in paragraph (b) of this subsection may be eligible for a credit of one thousand dollars ($1,000) per qualifying child reduced by ten dollars ($10) for every one dollar ($1) above the income thresholds.

  Implements a reduction of the child tax credit based on income over specified thresholds.

• KRS 141.0205

  [(g) The pass-through entity tax credit permitted by KRS 141.209;] → The Kentucky child tax credit permitted by Section 1 of this Act;

  Adds the Kentucky child tax credit to the list of refundable credits.

Action History

1. January 03, 2024

   to Appropriations & Revenue (S)

2. January 02, 2024

   to Committee on Committees (S)

3. January 02, 2024

   introduced in Senate

Sponsors

• D. Yates · Primary
• Cassie Chambers Armstrong · Primary

Subjects