141.066 Definitions -- Nonrefundable "low income" tax credit.
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<![CDATA[ Page 1 of 3 141.066 Definitions -- Nonrefundable "low income" tax credit. (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 <br>Department of Health and Human Services under the authority of 42 U.S.C. <br>sec. 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 <br>household but cannot be claimed as a dependent if the provisions of Internal <br>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 <br>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 <br>have the same meaning as defined in Section 7703 of the Internal Revenue <br>Code; and (e) "Threshold amount" means: 1. For a qualifying individual with no qualifying dependent children, the <br>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 <br>qualifying married couple with no qualifying dependent children, the <br>federal poverty level established for a family unit size of two (2); 3. For a qualifying individual with two (2) qualifying dependent children or <br>a qualifying married couple with one (1) qualifying dependent child, the <br>federal poverty level established for a family unit size of three (3); 4. For a qualifying individual with (3) or more qualifying dependent <br>children or a qualifying married couple with two (2) or more qualifying <br>dependent children, the federal poverty level established for a family <br>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 <br>paragraph (c) of this subsection shall be eligible for a nonrefundable "low <br>income" tax credit. The credit shall be applied against the taxpayer's tax <br>liability calculated under KRS 141.020, and shall be taken in the order <br>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 <br>applied against their joint tax liability. For a husband and wife living together, <br>whether filing separate returns or filing separately on a combined return, the <br>"low income" credit shall be computed on the basis of their combined adjusted <br>gross income, except that a separately computed gross income of less than Page 2 of 3 zero shall be treated as zero, and shall be applied against their combined tax <br>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 <br>(133%) of the threshold amount shall be entitled to a nonrefundable family <br>size tax credit. The family size tax credit shall be applied against the <br>taxpayer's tax liability calculated under KRS 141.020. The family size tax <br>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 <br>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 <br>amount, the family size tax credit shall be equal to the amount of the <br>taxpayer's individual income tax liability multiplied by a percentage as <br>follows: <br>1. If modified gross income is above one hundred percent (100%) but less <br>than or equal to one hundred four percent (104%) of the threshold <br>amount, the credit percentage shall be ninety percent (90%); 2. If modified gross income is above one hundred four percent (104%) but <br>less than or equal to one hundred eight percent (108%) of the threshold <br>amount, the credit percentage shall be eighty percent (80%); 3. If modified gross income is above one hundred eight percent (108%) but <br>less than or equal to one hundred twelve percent (112%) of the threshold <br>amount, the credit percentage shall be seventy percent (70%); 4. If modified gross income is above one hundred twelve percent (112%) <br>but less than or equal to one hundred sixteen percent (116%) of the <br>threshold amount, the credit percentage shall be sixty percent (60%); 5. If modified gross income is above one hundred sixteen percent (116%) <br>but less than or equal to one hundred twenty percent (120%) of the <br>threshold amount, the credit percentage shall be fifty percent (50%); Page 3 of 3 6. If modified gross income is above one hundred twenty percent (120%) <br>but less than or equal to one hundred twenty-four percent (124%) of the <br>threshold amount, the credit percentage shall be forty percent (40%); 7. If modified gross income is above one hundred twenty-four percent <br>(124%) but less than or equal to one hundred twenty-seven percent <br>(127%) of the threshold amount, the credit percentage shall be thirty <br>percent (30%); 8. If modified gross income is above one hundred twenty-seven percent <br>(127%) but less than or equal to one hundred thirty percent (130%) of <br>the threshold amount, the credit percentage shall be twenty percent <br>(20%); 9. If modified gross income is above one hundred thirty percent (130%) but <br>less than or equal to one hundred thirty-three percent (133%) of the <br>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. (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 <br>against their joint tax liability. For a qualifying married couple living together, <br>whether filing separate returns or filing separately on a combined return, the family <br>size tax credit shall be computed on the basis of their combined modified gross <br>income, except that a separately computed modified gross income of less than zero <br>shall be treated as zero, and shall be applied against their combined tax liability. Effective: March 18, 2005 <br>History: Amended 2005 Ky. Acts ch. 168, sec. 9, effective March 18, 2005. -- Amended 1994 Ky. Acts ch. 57, sec. 3, effective July 15, 1994. </p>
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