KRS § 141.522 — KY Code / Title XI / Chapter 141 / Section 141.522
141.522 Education Opportunity Account Program tax credit -- Cap on credit -- Prioritization. (See LRC Note below)
Status: in_force

141.522 Education Opportunity Account Program tax credit -- Cap on credit --

Prioritization. (See LRC Note below)

(1) (a) Effective for taxable years beginning on or after January 1, 2021, but before

January 1, 2026, a nonrefundable, nontransferable tax credit shall be

permitted against the tax imposed by KRS 141.020 or 141.040 and 141.0401,

with the ordering of credit as provided in KRS 141.0205 as applicable, for

contributions made during a taxable year to one (1) or more AGOs in

accordance with the EOA program. To qualify for this credit, a taxpayer filing

as an individual shall elect to claim a federal and Kentucky contribution

deduction associated with the contributions made to an AGO that does not

exceed an amount equal to the total contribution for the taxable year less the

amount of credit allowed by this section for the taxable year.

(b) If the taxpayer is a pass-through entity, the taxpayer shall apply the credit

against the limited liability entity tax imposed by KRS 141.0401, and shall

also pass the credit through to its members, partners, or shareholders in the

same proportion as the distributive share of income or loss is passed through.

(2) The aggregate value of the total annual tax credit cap awarded shall not exceed

twenty-five million dollars ($25,000,000).

(3) The credit amount awarded per taxpayer per taxable year shall be no more than the

lesser of:

(a) Ninety-five percent (95%) of the total contributions made to an AGO, except

as provided in subsection (4) of this section; or

(b) One million dollars ($1,000,000).

(4) (a) The taxpayer may elect to pledge a contribution for multiple taxable years, not

to exceed a total of four (4) taxable years.

(b) If the multi-year pledge is made by the taxpayer and the amount of the

contributions for each of the multiple taxable years is equal to or more than

the amount of contributions made to the AGO in the taxable year within

which the pledge is made, the amount of allowable credit shall be increased

by two (2) percentage points to ninety-seven percent (97%) in the taxable year

within which the pledge is made and for each pledged year.

(c) If the taxpayer does not remit the pledged amount of contributions during any

taxable year for which a multi-year pledge is made, the taxpayer shall repay

the portion of the credit resulting from the increase allowed by this

subsection.

(5) Any tax credit awarded under this section that is not used by the taxpayer in the

current taxable year may be carried forward for up to five (5) succeeding taxable

years until the tax credit has been utilized.

(6) Tax credits under this section shall be awarded on a first-come, first-served basis

each fiscal year within the limitations set forth in this section. The date and time

stamp from each application for preapproval shall establish the order in which the

application was received. For contributions pledged for multiple tax years, the

contribution shall be considered the first in line for the years subsequent to the

initial year of the pledge.