141.020 Levy of income tax on individuals -- Rate of normal tax -- Tax credits -- Income of nonresidents subject to tax -- Election to pay tax imposed by KRS 141.023. - Kentucky Statutes

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141.020 Levy of income tax on individuals -- Rate of normal tax -- Tax credits -- Income of nonresidents subject to tax -- Election to pay tax imposed by KRS
141.023. (1) An annual tax shall be paid for each taxable year by every resident individual of this state upon his entire net income as defined in this chapter. The tax shall be
determined by applying the rates in subsection (2) of this section to net income and
subtracting allowable tax credits provided in subsection (3) of this section. (2) (a) For taxable years beginning before January 1, 2005, the tax shall be determined by applying the following rates to net income:
1. Two percent (2%) of the amount of net income up to three thousand
dollars ($3,000); 2. Three percent (3%) of the amount of net income over three thousand
dollars ($3,000) and up to four thousand dollars ($4,000); 3. Four percent (4%) of the amount of net income over four thousand
dollars ($4,000) and up to five thousand dollars ($5,000); 4. Five percent (5%) of the amount of net income over five thousand
dollars ($5,000) and up to eight thousand dollars ($8,000); and 5. Six percent (6%) of the amount of net income over eight thousand
dollars ($8,000). (b) For taxable years beginning after December 31, 2004, the tax shall be determined by applying the following rates to net income:
1. Two percent (2%) of the amount of net income up to three thousand
dollars ($3,000); 2. Three percent (3%) of the amount of net income over three thousand
dollars ($3,000) and up to four thousand dollars ($4,000); 3. Four percent (4%) of the amount of net income over four thousand
dollars ($4,000) and up to five thousand dollars ($5,000); 4. Five percent (5%) of the amount of net income over five thousand
dollars ($5,000) and up to eight thousand dollars ($8,000); 5. Five and eight-tenths percent (5.8%) of the amount of net income over
eight thousand dollars ($8,000) and up to seventy-five thousand dollars
($75,000); and 6. Six percent (6%) of the amount of net income over seventy-five
thousand dollars ($75,000). (3) The following tax credits, when applicable, shall be deducted from the result obtained under subsection (2) to arrive at the annual tax:
(a) Twenty dollars ($20) for an unmarried individual;
(b) Twenty dollars ($20) for a married individual filing a separate return and an additional twenty dollars ($20) for the spouse of taxpayer if a separate return
is made by the taxpayer and if the spouse, for the calendar year in which the
taxable year of the taxpayer begins, had no Kentucky gross income and is not the dependent of another taxpayer; or forty dollars ($40) for married persons
filing a joint return, provided neither spouse is the dependent of another
taxpayer. The determination of marital status for the purpose of this section
shall be made in the manner prescribed in Section 153 of the Internal Revenue
Code; (c) Twenty dollars ($20) credit for each dependent. No credit shall be allowed for any dependent who has made a joint return with his spouse; (d) An additional forty dollars ($40) credit if the taxpayer has attained the age of sixty-five (65) before the close of the taxable year; (e) An additional forty dollars ($40) credit for taxpayer's spouse if a separate return is made by the taxpayer and if the taxpayer's spouse has attained the age
of sixty-five (65) before the close of the taxable year, and, for the calendar
year in which the taxable year of the taxpayer begins, has no Kentucky gross
income and is not the dependent of another taxpayer; (f) An additional forty dollars ($40) credit if the taxpayer is blind at the close of the taxable year; (g) An additional forty dollars ($40) credit for taxpayer's spouse if a separate return is made by the taxpayer and if the taxpayer's spouse is blind, and, for
the calendar year in which the taxable year of the taxpayer begins, has no
Kentucky gross income and is not the dependent of another taxpayer; (h) In the case of nonresidents, the tax credits allowable under this subsection shall be the portion of the credits that are represented by the ratio of the
taxpayer's Kentucky adjusted gross income as determined by KRS
141.010(10), without the adjustments contained in (f) and (g) of that
subsection, to the taxpayer's adjusted gross income as defined in Section 62 of
the Internal Revenue Code. However, in the case of a married nonresident
taxpayer with income from Kentucky sources, whose spouse has no income
from Kentucky sources, the taxpayer shall determine allowable tax credit(s) by
either:
1. The method contained above applied to the taxpayer's tax credit(s),
excluding credits for a spouse and dependents; or 2. Prorating the taxpayer's tax credit(s) plus the tax credits for the
taxpayer's spouse and dependents by the ratio of the taxpayer's Kentucky
adjusted gross income as determined by KRS 141.010(10), without the
adjustments contained in (f) and (g) of that subsection, to the total joint
federal adjusted gross income of the taxpayer and the taxpayer's spouse; (i) In the case of an individual who becomes a resident of Kentucky during the taxable year, the tax credits allowable under this subsection shall be the
portion of the credits represented by the ratio of the taxpayer's Kentucky
adjusted gross income as determined by subsection (10) of KRS 141.010,
without the adjustments contained in paragraphs (f) and (g) of that subsection,
to the taxpayer's adjusted gross income as defined in Section 62 of the Internal
Revenue Code; (j) In the case of a fiduciary, other than an estate, the allowable tax credit shall be two dollars ($2); (k) In the case of an estate, the allowable tax credit shall be twenty dollars ($20);
(l) An additional twenty dollars ($20) credit shall be allowed if the taxpayer is a member of the Kentucky National Guard at the close of the taxable year. (4) An annual tax shall be paid for each taxable year as specified in this section upon the entire net income except as herein provided, from all tangible property located
in this state, from all intangible property that has acquired a business situs in this
state, and from business, trade, profession, occupation, or other activities carried on
in this state, by natural persons not residents of this state. A nonresident individual
shall be taxable only upon the amount of income received by the individual from
labor performed, business done, or from other activities in this state, from tangible
property located in this state, and from intangible property which has acquired a
business situs in this state; provided, however, that the situs of intangible personal
property shall be at the residence of the real or beneficial owner and not at the
residence of a trustee having custody or possession thereof. The remainder of the
income received by such nonresident shall be deemed nontaxable by this state. (5) Subject to the provisions of KRS 141.081, any individual may elect to pay the annual tax imposed by KRS 141.023 in lieu of the tax levied under this section. (6) An individual who becomes a resident of Kentucky during the taxable year is subject to taxation as prescribed in subsection (4) of this section prior to
establishing such residence and as prescribed in subsection (1) of this section
following the establishment of such residence. (7) An individual who becomes a nonresident of Kentucky during the taxable year is subject to taxation, as prescribed in subsection (1) of this section, during that
portion of the taxable year that the individual is a resident and, as prescribed in
subsection (4) of this section, during that portion of the taxable year when the
individual is a nonresident. Effective: March 18, 2005
History: Amended 2005 Ky. Acts ch. 168, sec. 5, effective March 18, 2005. -- Amended 1990 Ky. Acts ch. 476, Pt. VII D, sec. 632, effective April 11, 1990. --
Amended 1976 Ky. Acts ch. 77, Pt. I, sec. 1. -- Amended 1974 Ky. Acts ch. 362,
sec. 1. -- Amended 1972 Ky. Acts ch. 84, Pt. II, sec. 2. -- Amended 1970 Ky. Acts
ch. 216, sec. 5. -- Amended 1966 Ky. Acts ch. 176, Part I, sec. 3. -- Amended 1964
Ky. Acts ch. 76, sec. 1. -- Amended 1962 Ky. Acts ch. 124, sec. 2. -- Amended 1960
Ky. Acts ch. 5, Art. III, sec. 2. -- Amended 1958 Ky. Acts ch. 3, sec. 1. -- Amended
1956 (4th Extra. Sess.) Ky. Acts ch. 4, sec. 2. -- Amended 1954 Ky. Acts ch. 79,
sec. 2. -- Amended 1952 Ky. Acts ch. 124, sec. 1. -- Amended 1948 Ky. Acts ch. 93,
sec. 2. -- Amended 1946 Ky. Acts ch. 234, sec. 6. -- Recodified 1942 Ky. Acts
ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 4281b-14. Legislative Research Commission Note (3/18/2005). 2005 Ky. Acts ch. 168, sec. 165, provides that this section shall apply to tax years beginning on or after January 1,
2005.