Schedule ITC: Kentucky Individual Tax Credit Schedule (2025)

Who files this form

For tax year 2025, 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.

Complete Section A for business incentive and other tax credits, Section B for personal tax credits, and Section C for qualifying dependents used to determine your family size.

When it's due

The 2025 Schedule ITC gives these credit-specific deadlines:

• Qualified Broadband Investment Tax Credit: Submit the application to the Department of Revenue by December 31 of the current calendar year. For tax year 2025, that is December 31, 2025.
• Biodiesel and renewable diesel credit: File the claim with the Department of Revenue by January 15 each year for production or blending in the previous calendar year. The department issues certification by April 15. These are annual dates printed in the 2025 schedule, not a separately stated deadline for filing your 2025 income tax return.

The supplied text does not state a general filing deadline for Schedule ITC.

What you'll need

Have your Form 740, 740-NP, or 741 available, along with your name as shown on the return and your Social Security number.

For personal and family size credits:

• Your date of birth and your spouse’s date of birth, if completing the spouse’s personal credit section.
• Each qualifying dependent’s name, Social Security number, and relationship to you.
• Federal and Kentucky adjusted gross income amounts for the Modified Gross Income worksheet. Include your spouse’s amounts if you file separate returns and live in the same household.
• Non-Kentucky municipal bond interest and applicable lump-sum distribution amounts from federal Form 4972 and Kentucky Form 4972-K.

For business and other credits: Attach the documents required for the credit you claim. 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 keep it for your records.
• Tax paid to another state: A copy of the other state’s return, including a schedule of income sources. Compute each state’s credit separately using Worksheet A.
• Unemployment credit: Schedule UTC. Keep the unemployment certification in your files.
• Recycling or composting credit: Schedule RC and/or Schedule K-1 showing the approved credit.
• Qualified research facility credit: Schedule QR.
• Endow Kentucky credit: Approved Schedule ENDOW each year, or Schedule K-1, Form PTE, for a partner, member, or shareholder claiming a passed-through credit.

Section A lists the required attachment and whether preapproval is required for each credit.

How to file

Enclose Schedule ITC with Form 740, 740-NP, or 741, along with the required credit attachments.

• Section A: Add lines 1 through 24. Transfer line 25 to Form 740, page 1, line 15, Columns A and B. For Form 740-NP, enter the combined totals of Columns E and F on page 1, line 15. For Form 741, enter the combined totals on line 18.
• Section B: Follow the assignment instructions for your filing status and transfer the personal tax credit to Form 740 or 740-NP, line 17.
• Section C: Use your family size and modified gross income to find your percentage in the table. Multiply Form 740 or 740-NP, line 19, by that percentage and enter the credit on line 21.

The supplied text does not give a mailing address or e-file instructions for Schedule ITC.

Common mistakes

• Claiming another state’s withholding as a credit: The instructions say you cannot claim credit for tax withheld by another state. You must file that state’s return and pay tax on income also taxed by Kentucky.
• Combining credits for several states: Compute the credit for each state separately.
• 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.
• Submitting duplicate inventory credit documents: Do not submit both Schedule INV and Worksheet INV for the same entity.
• Missing the Endow Kentucky adjustment: You may need to reduce your Schedule A contribution by the ENDOW credit amount. The text directs you to the Schedule A instructions.

Questions people ask

What personal tax credits are listed for 2025?

The form allows $40 if you were age 65 on or before December 31, 2025, $40 if you were legally blind on that date, and $20 if you were a Kentucky National Guard member on that date. The same amounts apply to an eligible spouse when completing the spouse’s section.

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 give 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 2025 Family Size Tax Credit Table. The worksheet uses the greater of its federal-based and Kentucky-based income totals.

Do all business credits require preapproval?

No. Section A marks each credit with “Yes” or “No” in the preapproval column and lists its required attachment.

Official sources

• https://revenue.ky.gov/Forms/Schedule%20ITC%20(2025).pdf