Schedule UTC: Unemployment Tax Credit (2025)
Kentucky · Kentucky DOR · Used for tax years 2025
Kentucky Schedule UTC calculates the unemployment tax credit of $100 for each qualifying employee hired. It lists employees’ names, Social Security numbers, employment dates, and Office of Employment and Training certificate numbers, and is attached to the applicable tax return.
Who files this form
Use 2025 Schedule UTC to claim Kentucky’s unemployment tax credit for qualifying employees you hired.
To qualify, an employee must:
- Have been classified as unemployed by the Education and Workforce Development Cabinet, Department of Workforce Investment, Office of Development and Training for at least 60 days before you hired them.
- Remain employed by you for at least 180 consecutive days during the tax year for which you claim the credit.
No credit is allowed for employees for whom you receive federally funded on-the-job training payments. Certain relatives, dependents, and people connected to an estate or trust are also excluded under the relationships specified in the schedule’s instructions.
Organizations exempt from income tax under KRS Chapter 141 cannot claim the credit.
What you'll need
Have the information requested by Schedule UTC ready:
- Your name or entity name, address, and applicable Social Security number, federal identification number, and Kentucky Corporation/LLET account number.
- Each employee’s name and Social Security number.
- Each employee’s Office of Employment and Training certificate number.
- Each employee’s hire date and last date on your payroll during the tax year.
The schedule must be attached to Form 720, 720U, PTE, 725, 740, 740-NP, or 741, as applicable.
How to file
- Complete your identifying information and list the employees for whom you are claiming the credit.
- Enter the total employee count on line 24 and carry it to line 25.
- Multiply line 25 by $100 and enter the credit on line 26.
- Report the credit as directed for your return:
- Form 720 or 720U: Schedule TCS, Part II, Columns E and F.
- Form PTE: Schedule TCS, Part II, Column E, and Form PTE, Schedule K. General partnerships enter it only on Form PTE, Schedule K.
- Form 725: Schedule TCS, Part II, Column E.
- Form 740 or 740-NP: Schedule ITC, Section A, line 7.
- Form 741: Form 741, line 18.
- Attach Schedule UTC to the applicable return.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Claiming the same employee more than once: The credit for a qualified employee cannot be claimed more than once for any tax year. Related corporations or unincorporated trades and businesses are treated as a single employer for this credit.
- Overlooking excluded employees: No credit is allowed for employees covered by the federally funded on-the-job training exclusion or the relationship and dependent exclusions listed in the instructions.
- Missing the number-format reminder: Where the form requires nine digits, a six-digit number must have leading zeros.
- Forgetting the attachment: Schedule UTC must be attached to the applicable return.
Questions people ask
How much is the credit?
The credit is $100 for each qualifying employee. Multiply the employee count on line 25 by $100 and enter the result on line 26. The credit is subject to the ordering rules in KRS 141.0205.
How long must an employee work for me?
The employee must remain employed by you for at least 180 consecutive days during the tax year in which you claim the credit. They must also have been classified as unemployed by the office named in the instructions for at least 60 days before you hired them.
How does a pass-through entity apply the credit?
The credit is applied at the entity level against the limited liability entity tax and distributed to each partner, member, or shareholder based on their pro rata share.
How is the credit divided for an estate or trust?
The credit is apportioned between the estate or trust and its beneficiaries based on the estate or trust income allocable to each.