KRS 141.081: Optional standard deduction for individuals -- Exception.

(1) An individual, at his election, may deduct from his adjusted gross income a

standard deduction of:

(a) Six hundred and fifty dollars ($650) for taxable years beginning before

December 31, 1996;

(b) Nine hundred dollars ($900) for taxable years beginning af ter December 31,

1996, but before December 31, 1997;

(c) One thousand two hundred dollars ($1,200) for taxable years beginning after

December 31, 1997, but before December 31, 1998;

(d) One thousand five hundred dollars ($1,500) for taxable years beginning after

December 31, 1998, but before December 31, 1999;

(e) One thousand seven hundred dollars ($1,700) for taxable years beginning after

December 31, 1999, but before December 31, 2000; and

(f) The amount calculated under subsection (2) of this section fo r taxable years

beginning after December 31, 2000.

(2) (a) For taxable years beginning after December 31, 2000, and each taxable year

thereafter, the standard deduction for the current taxable year shall be equal to

the standard deduction for the prior taxable year multiplied by the greater of:

1. The average of the monthly CPI -U figures for the twelve (12)

consecutive months ending in and including the July six (6) months

prior to the January beginning the current tax year, divided by the

average of the monthly CPI-U figures for the twelve (12) months ending

in and including the July eighteen (18) months prior to the January

beginning the current tax year; or

2. One (1).

(b) As used in this subsection, a tax year shall be the twelve (12) month period

beginning in January and ending in December.

(c) As used in this subsection, "CPI -U" means the nonseasonally adjusted United

States city average of the Consumer Price Index for all urban consumers for

all items, as released by the federal Bureau of Labor Statistics.

(3) The standard deduction provided for in this section shall be in lieu of all deductions

and shall not be allowed in the case of a taxable year of less than twelve (12)

months on account of a change in the accounting period or in the case of a fiduciary.

(4) In the case of a husband and wife living together, the standard deduction provided

for in this section shall not be allowed to either if the net income of one (1) of the

spouses is determined without regard to the standard deduction. The determination

of marital status shall be made in th e manner prescribed in Section 153 of the

Internal Revenue Code.