KRS 141.065: Tax credit for hiring person classified as unemployed -- Annual report.

(1) For the purposes of this section, "code" or "Internal Revenue Code" means the

Internal Revenue Code in effect as of December 31, 1981.

(2) For taxable years beginni ng before January 1, 2028, there shall be allowed as a

credit for any taxpayer against the tax imposed by KRS 141.020 or 141.040 and

141.0401 for any taxable year, with the ordering of the credits as provided in KRS

141.0205, an amount equal to one hundred dollars ($100) for each person hired by

the taxpayer, if that person has been classified as unemployed by the Office of

Unemployment Insurance in the Education and Labor Cabinet and has been so

classified for at least sixty (60) days prior to his employment by the taxpayer, and if

further that person has remained in the employ of the taxpayer for at least one

hundred eighty (180) consecutive days during the taxable year in which the

taxpayer claims the credit.

(3) No credit shall be allowed to any taxpayer for any person hired under any of the

following circumstances:

(a) A person for whom the taxpayer receives federally funded payments for on -

the-job training;

(b) For any person who bears any of the relationships to the taxpayer described in

paragraphs (1) through (8) of Section 152(a) of the Internal Revenue Code, or,

if the taxpayer is a corporation, to an individual who owns, directly or

indirectly, more than fifty percent (50%) in value of the outstanding stock of

the corporation as determined with the application of Section 267(c) of the

code;

(c) If the taxpayer is an estate or trust, to any person who is a grantor, beneficiary,

or fiduciary of the estate or trust, or is an individual who bears any of the

relationships described in paragraphs (1) throu gh (8) of Section 152(a) of the

code to a grantor, beneficiary, or fiduciary of the estate or trust; or

(d) To any person who is a dependent of the taxpayer as described in code

Section 152(a)(9), or, if the taxpayer is an estate or trust, of a grantor,

beneficiary, or fiduciary of the estate or trust.

(4) For purposes of this section, all employees of all corporations which are members

of the same controlled group of corporations shall be treated as employed by a

single employer. In no instance shall the c redit, if any, allowable by subsection (2)

of this section for any employee qualified thereunder be claimed more than once for

any taxable year by such a controlled group of corporations. For purposes of this

subsection, the term "controlled group of corpo rations" has the meaning given to

that term by code Section 1563(a), except that "more than fifty percent (50%)" shall

be substituted for "at least eighty percent (80%)" each place it appears in code

Section 1563(a)(1), and the determination shall be made without regard to

subsections (a)(4) and (e)(3)(c) of code Section 1563.

(5) For purposes of this section, all employees of trades or businesses (whether or not

incorporated) which are under common control shall be treated as employed by a

single employer, and in no instance shall the credit, if any, allowable by subsection

(2) of this section for any employee qualified thereunder be claimed more than once

for any taxable year.

(6) No credit shall be allowed under subsection (2) of this section to any organ ization

which is exempt from income tax by this chapter.

(7) In the case of a pass -through entity, the amount of the credit determined under this

section for any taxable year shall be applied at the entity level against the limited

liability entity tax imposed by KRS 141.0401 and shall also be apportioned pro rata

among the members, partners, or shareholders of the limited liability entity on the

last day of the taxable year, and any person to whom an amount is so apportioned

shall be allowed, subject to code Section 53, a credit under subsection (2) of this

section for that amount.

(8) In the case of an estate or trust, the amount of the credit determined under this

section for any taxable year shall be apportioned between the estate or trust and the

beneficiaries on the basis of income of the estate or trust allocable to each, and any

beneficiary to whom any amount has been apportioned under this subsection shall

be allowed, subject to code Section 53, a credit under subsection (2) of this section

for that amount.

(9) In no event shall the credit allowed, pursuant to this section, for any taxable year

exceed the tax liability of the taxpayer for the taxable year.

(10) (a) By November 1, 2026, and each November 1 thereafter as long as credit is

claimed under this section, the department shall report to the Legislative

Research Commission for referral to the Interim Joint Committee on

Appropriations and Revenue:

1. The total number of returns claiming the credit for the taxable year;

2. The total amount of credit claimed for the taxable year;

3. By county, the total number of unemployed persons hired for which

credit is claimed for the taxable year;

4. By taxpayer:

a. The name and location of the taxpayer claiming the credit as listed

on the tax return;

b. The total number of tax credits claimed for the taxable year;

c. The total amount of credit claimed for the taxable year; and

d. The total number of unemployed persons hired in which credit is

claimed for the taxable year; and

5. a. In the case of taxpayers other than corporations, based on ranges

of adjusted gross income of no larger than five thousand dollars

($5,000) for the taxable year, the total amount of credit claimed

and the total number of returns claiming this credit for each

adjusted gross income range.

b. In the case of corporations, based on ranges of net income of no

larger than fifty thousand dollars ($50,000) for the taxable year,

the total amount of credit claimed and the total number of returns

claiming this credit for each net income range.

(b) The Office of Unemployment Insurance shall assist by providing t he

department with the information necessary to help fulfill the requirements

under this subsection.

(c) The information required to be reported under this subsection shall not be

considered confidential taxpayer information and shall not be subject to KRS

Chapter 131 or any other provisions of the Kentucky Revised Statutes

prohibiting disclosure or reporting of information.