Income/Franchise:
Kentucky: New Law Updates State Conformity to IRC and Creates Elective Pass-Through Entity Level Tax
H.B. 360, signed by gov. 3/24/23. Recently signed legislation incorporates some tax-related provisions, including generally updating Kentucky statutory corporate and personal income tax references to the Internal Revenue Code (IRC) for tax years beginning on or after January 1, 2023, to the IRC as in effect on December 31, 2022 – exclusive of any amendments made subsequent to this date, other than amendments that extend provisions in effect on December 31, 2022, that would otherwise terminate. The legislation also permits some pass-through entities (PTEs) to make an annual election to pay an entity level state income tax for taxable years beginning on and after January 1, 2022. Correspondingly, individual partners, members, or shareholders of an electing PTE may claim a nonrefundable credit against their individual income tax equal to 100% of the tax paid by the electing PTE based on the pro rata share of the individual partner’s, member’s, or shareholder’s income from the PTE.
See recently issued Multistate Tax Alert (March 27, 2023) for more details on the new PTE tax, and please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
