{"data":{"id":"us-ky/krs-154.20-258","jurisdiction":"us-ky","citation":"KRS 154.20-258","heading":"Investor entitled to credit -- Amount  -- Carry-forward -- Liabilities --","body":"Transferability -- Notification of Department  of Revenue  -- Additional\ncredits.\n(1) (a) For investment funds approved by the authority prior to January 1, 2023,\nan  investor shall be entitled to a nonrefundable credit equal to forty\npercent (40%) of the investor's proportional ownership share of all\nqualified investments made  by its investment fund and verified by the\nauthority. The aggregate tax credit available to any investor shall not\nexceed forty percent (40%) of the cash contribution made by the investor\nto its investment fund.\n(b) For investment funds approved by the authority on or after January 1,\n2023, an investor shall be entitled to a nonrefundable credit not to exceed\ntwenty-five percent (25%) of the investor's proportional ownership share\nof all qualified investments made  by its investment fund and verified by\nthe authority.\n(c) The credit may be applied against:\n1. Both the income tax imposed by KRS  141.020 or 141.040, and the\nlimited liability entity tax imposed  by KRS  141.0401, with the\nordering of the credits as provided in KRS 141.0205;\n2. The  insurance taxes imposed  by KRS  136.320, 136.330, and\n304.3-270; and\n3. The  taxes on  financial institutions imposed  by KRS  136.300,\n136.310, and 136.505.\n(2) The tax credit amount that may be claimed by an investor in any tax year shall\nnot exceed fifty percent (50%) of the initial aggregate credit amount approved\nby the authority for the investment fund which would be proportionally available\nto the investor. For qualified investments approved on or after January 1, 2022,\nan investor may first claim the credit granted in subsection (1) of this section on\nthe tax return filed for the taxable year in which the qualified investment is\nmade  by the investment fund. No tax credit shall become  effective until the\nauthority notifies the Department of Revenue in accordance with subsection (6)\nof this section.\n(3) If the credit amount that may be claimed in any tax year, as determined under\nsubsections (1) and (2) of this section, exceeds the investor's combined tax\nliabilities against which the credit may be claimed for that year, the investor\nmay  carry the excess tax credit forward until the tax credit is used, but the\ncarry-forward of any excess tax credit shall not increase the fifty percent (50%)\nlimitation established by subsection (2) of this section. Any tax credits not used\nwithin fifteen (15) years of the approval by the authority of the aggregate tax\ncredit amount available to the investor shall be lost.\n(4) The tax credits allowed by this section shall not apply to any liability an investor\nmay  have for interest, penalties, past due taxes, or any other additions to the\ninvestor's tax liability. The holder of the tax credit shall assume  any and all\nliabilities and responsibilities of the credit.\n(5) The tax credits allowed by this section are not transferable, except that:\n(a) A nonprofit entity may transfer, for some or no consideration, any or all of\nthe credits it receives under this section and any related benefits, rights,\nresponsibilities, and liabilities. Within thirty (30) days of the date of any\ntransfer of credits pursuant to this subsection, the nonprofit entity shall\nnotify the authority and the Department of Revenue of:\n1. The  name,  address, and  Social Security number  or employer\nidentification number, as may be applicable, of the party to which the\nnonprofit entity transferred its credits;\n2. The amount of credits transferred; and\n3. Any  additional information the authority or the Department of\nRevenue  deems necessary.\n(b) If an investor is an entity and is a party to a merger, acquisition,\nconsolidation, dissolution, liquidation, or similar corporate reorganization,\nthe tax credits shall pass through to the investor's successor.\n(c) If an individual investor dies, the tax credits shall pass to the investor's\nestate or beneficiaries in a manner  consistent with the transfer of\nownership of the investor's interest in the investment fund.\n(6) The tax credit amount that may be claimed by an investor shall reflect only the\ninvestor's participation in qualified investments properly reported to the\nauthority by the investment fund manager. No tax credit authorized by this\nsection shall become  effective until the Department of Revenue  receives\nnotification from the authority that includes:\n(a) A  statement that a qualified investment has been  made  that is in\ncompliance  with KRS  154.20-250 to 154.20-284 and  all applicable\nregulations; and\n(b) A list of each investor in the investment fund that owns a portion of the\nsmall business in which a qualified investment has been made by virtue of\nan  investment in the investment fund, and each investor's amount of\ncredit granted to the investor for each qualified investment.\nThe  authority shall, within sixty (60) days of approval of credits, notify the\nDepartment of Revenue of the information required pursuant to this subsection\nand notify each investor of the amount of credits granted to that investor, and\nthe year the credits may first be claimed.\n(7) After the date on which investors in an investment fund have cumulatively\nreceived an amount of credits equal to the amount of credits allocated to the\ninvestment fund by the authority, no investor shall receive additional credits by\nvirtue of its investment in that investment fund unless the investment fund's\nallocation of credits is increased by the authority pursuant to an amended\napplication.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=52153","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:53Z","sha256":"76fddbcf70d314e9a3a05a73e9331f34faa9ecea7bd138decc8fb20fce61666a","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154.20-257","next":"us-ky/krs-154.20-259"},"notice":"GroundRules: Original legal text. Not legal advice."}