Schedule ITC: Kentucky Individual Tax Credit Schedule (2024)
Kentucky · Kentucky DOR · Used for tax years 2024
Schedule ITC is Kentucky’s 2024 Individual Tax Credit Schedule. It reports business incentive and other tax credits, personal tax credits, and information used to calculate the family size tax credit. Enclose it with Form 740, 740-NP, or 741.
Who files this form
For tax year 2024, you must file Schedule ITC if you have:
- Nonrefundable business incentive credits.
- Personal tax credits for being age 65 or older, legally blind, or a member of the Kentucky National Guard.
- Qualifying dependent children and are claiming the Family Size Tax Credit.
Enclose Schedule ITC with Form 740, 740-NP, or 741.
When it's due
The tax year 2024 Schedule ITC does not state a deadline for filing the schedule itself. It lists these recurring credit-related dates:
- Biodiesel and renewable diesel credit: File the credit claim with the Department of Revenue by January 15 each year for qualifying production or blending in the previous calendar year. The department issues the credit certification by April 15.
- Renewable chemical production credit: Schedule CHEM is due to the Department of Revenue by March 1 each year. The department issues the credit certificate by April 15 each year.
These dates are printed as annual rules, not as deadlines labeled for a specific claim year.
What you'll need
Have your tax return and the information needed for the credits you claim:
- Identification: Names as shown on your tax return and your Social Security number.
- Personal credits: Your date of birth and, when completing the spouse portion, your spouse’s date of birth.
- Family Size Tax Credit: Each qualifying dependent’s name, Social Security number, and relationship to you. You also need the income amounts required by the Modified Gross Income worksheet, including your spouse’s amounts if you file separate returns and live in the same household.
Section A lists the required attachments for each business or other credit. Examples include:
- Limited liability entity tax credit: Copies of Kentucky Schedule K-1 or Form 725. Complete a separate Worksheet C for each entity and retain it for your records.
- Tax paid to another state: A copy of that state’s return, including a schedule of income sources. Compute each state’s credit separately.
- Unemployment credit: Schedule UTC. Keep the unemployment certification in your files.
- Qualified research facility credit: Schedule QR.
- Renewable chemical production credit: The credit certificate, Schedule CHEM.
Check the attachment requirements for every credit you claim.
How to file
Enclose the completed Schedule ITC and required credit attachments with Form 740, 740-NP, or 741. The supplied text does not provide a tax-return mailing address or e-filing directions.
Transfer your credits to the return as directed:
- Section A: Add lines 1 through 24 on line 25. Transfer the totals to Form 740, page 1, line 15, Columns A and B. For Form 740-NP, page 1, line 15, or Form 741, line 18, enter the combined totals of Columns E and F.
- Section B: Follow lines 9 through 12 for your filing status to transfer personal credits to Form 740 or 740-NP, line 17.
- Section C: Use your family size and modified gross income to find your credit percentage. Multiply the tax on Form 740 or 740-NP, line 19, by that percentage and enter the credit on line 21.
Common mistakes
- Claiming another state’s withholding as a credit: The instructions say you cannot claim credit for tax withheld alone. You must file a return with the other state and pay tax on income also taxed by Kentucky.
- Combining credits for multiple states: Compute the credit separately for each state.
- Submitting both inventory forms for the same entity: The instructions specifically say not to submit both Schedule INV and Worksheet INV for the same entity.
- Overlooking gambling losses: The printed tip warns that gambling losses claimed on Schedule A may reduce or eliminate the credit for taxes paid to another state.
- Overlooking an Endow Kentucky adjustment: You may need to reduce your Schedule A contribution by the amount of the ENDOW credit. The form directs you to the Schedule A instructions.
Questions people ask
What personal tax credits are available for 2024?
Section B allows $40 if you were age 65 on or before December 31, 2024, $40 if you were legally blind on December 31, 2024, and $20 if you were a Kentucky National Guard member on December 31, 2024. Complete the spouse portion only for a joint return or married filing separately on a combined return.
Who counts toward my family size?
Family size includes you, your spouse if you are married and living in the same household, and qualifying children. The instructions describe relationship, residence, age, and support tests for qualifying children.
How do I find my Family Size Tax Credit percentage?
Complete the Modified Gross Income worksheet, then use that amount and your family size in the 2024 Family Size Tax Credit Table on Schedule ITC.
Do all business credits require preapproval?
No. Section A identifies whether preapproval is required for each listed credit and names its required attachment.
Can I carry an unused credit forward?
It depends on the credit. For example, unused Kentucky Small Business Tax Credits may be carried forward for up to five years. Remaining limited liability entity tax credits cannot be carried forward. Check the instructions for the specific credit.