AN ACT relating to a tax credit for qualified home modifications.

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AN ACT relating to a tax credit for qualified home modifications. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Eligible taxpayer" means any individual that incurs costs directly 6
associated with a qualified home modification for an occupant and who 7
does not receive reimbursement from that occupant; 8
(b) "Occupant" means an individual that: 9
1. Is age sixty-five (65) or older; or 10
2. a. Has a physical or mental impairment that substantially limits 11
one (1) or more of a person's major life activities; and 12
b. The impairment has existed for a continuous period of not less 13
than twelve (12) months; 14
(c) "Qualified home modification" means any up grade, renovation, or first -15
time installation made to a qualified residence that increases accessibility 16
for an occupant; and 17
(d) "Qualified residence" means a structure that is being used or constructed 18
for use as an occupant's primary dwelling located wi thin the 19
Commonwealth and includes: 20
1. Single-family homes; or 21
2. Multifamily residential units. 22
(2) (a) For taxable years beginning on or after January 1, 2027, but before 23
January 1, 2031, an eligible taxpayer may claim a nonrefundable credit 24
against the tax imposed under KRS 141.020 for a qualified home 25
modification. 26
(b) The amount of the credit allowed in paragraph (a) of this subsection shall 27
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be equal to the actual costs of the qualified home modification, up to seven 1
thousand five hundred dollars ($7, 500) for each taxable year in which a 2
qualified home modification is made to a qualified residence. 3
(3) In order to verify the tax credit claimed, the department may require: 4
(a) Invoices to substantiate the costs associated with the qualified home 5
modification; and 6
(b) Documentation that the eligible taxpayer and occupant meet the definitions 7
established in subsection (1) of this section. 8
(4) (a) The purpose of the qualified home modification tax credit is to assist 9
occupants with physical and mental impa irments and aging adults with 10
costs associated with making necessary adjustments to a qualified residence 11
to allow the occupant to remain in the qualified residence longer. 12
(b) In order for the General Assembly to evaluate the effectiveness of the 13
qualified home modification tax credit, the department shall submit a report 14
to the Interim Joint Committee on Appropriations and Revenue on or before 15
November 1, 2028, and on or before each November 1 thereafter as long as 16
the credit may be claimed. The report shall include: 17
1. The location of the taxpayer, by county, as reflected on the return filed 18
for the taxable year; 19
2. The amount of the qualified home modification tax credit claimed by 20
the taxpayer for the taxable year; 21
3. The total cumulative amount of all qualified home modification 22
credits claimed for the taxable year; and 23
4. Based on ranges of adjusted gross income of no larger than five 24
thousand dollars ($5,000) for the taxable year, the total amount of tax 25
credits claimed and the number of returns claim ing a tax credit for 26
each adjusted gross income range. 27
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(c) The information required to be reported under this section shall not be 1
considered confidential taxpayer information and shall not be subject to 2
KRS Chapter 131 or any other provisions of the Kentu cky Revised Statutes 3
prohibiting disclosure or reporting of information. 4
Section 2. KRS 141.0205 is amended to read as follows: 5
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax 6
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 7
the credits shall be determined as follows: 8
(1) The nonrefundable business incentive credits against the tax imposed by KRS 9
141.020 shall be taken in the following order: 10
(a) The limited liability entity tax credit permitted by KRS 141.0401; 11
(b) The economic development credits computed under KRS 141.347, 141.381, 12
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 13
154.12-2088; 14
(c) The qualified farming operation credit permitted by KRS 141.412; 15
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 16
(e) The health insurance credit permitted by KRS 141.062; 17
(f) The tax paid to other states credit permitted by KRS 141.070; 18
(g) The credit for hiring the unemployed permitted by KRS 141.065; 19
(h) The recycling or composting equipment credit permitted by KRS 141.390; 20
(i) The tax credit for cash contributions in investment funds permitted by KRS 21
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 22
154.20-258; 23
(j) The research facilities credit permitted by KRS 141.395; 24
(k) The employer High School Equivalency Diploma program incentive credit 25
permitted under KRS 151B.402; 26
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 27
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(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 1
(n) The clean coal incentive credit permitted by KRS 141.428; 2
(o) The ethanol credit permitted by KRS 141.4242; 3
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 4
(q) The energy efficiency credits permitted by KRS 141.436; 5
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 6
(s) The Endow Kentucky credit permitted by KRS 141.438; 7
(t) The New Markets Development Program credit permitted by KRS 141.434; 8
(u) The distilled spirits credit permitted by KRS 141.389; 9
(v) The angel investor credit permitted by KRS 141.396; 10
(w) The film industry credit permitted by KRS 141.383 for applications approved 11
on or after April 27, 2018, but before January 1, 2022; 12
(x) The inventory credit permitted by KRS 141.408; 13
(y) The renewable chemical production credit permitted by KRS 141.4231; and 14
(z) The qualified broadband investment[ tax] credit permitted by KRS 141.391; 15
(2) After the application of the nonrefundable credits in subsection (1) of this section, 16
the nonrefundable p ersonal tax credits against the tax imposed by KRS 141.020 17
shall be taken in the following order: 18
(a) The individual credits permitted by KRS 141.020(3); 19
(b) The credit permitted by KRS 141.066; 20
(c) The tuition credit permitted by KRS 141.069; 21
(d) The household and dependent care credit permitted by KRS 141.067; 22
(e) The income gap credit permitted by KRS 141.066;[ and] 23
(f) The Education Opportunity Account Program [ tax] credit permitted by KRS 24
141.522; and 25
(g) The qualified home modification credit permitted by Section 1 of this Act; 26
(3) After the application of the nonrefundable credits provided for in subsection (2) of 27
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this section, the refundable credits against the tax imposed by KRS 141.020 shall be 1
taken in the following order: 2
(a) The individual withholding tax credit permitted by KRS 141.350; 3
(b) The individual estimated tax payment credit permitted by KRS 141.305; 4
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 5
171.397(1)(b); 6
(d) The film industry [tax] credit permitted by KRS 141.383 for applications 7
approved prior to April 27, 2018, or on or after January 1, 2022; 8
(e) The development area[ tax] credit permitted by KRS 141.398; 9
(f) The decontamination[ tax] credit permitted by KRS 141.419; and 10
(g) The pass-through entity tax credit permitted by KRS 141.209; 11
(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 12
tax imposed by KRS 141.040; 13
(5) The following nonrefundable credits shall be applied against the sum of the tax 14
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 15
of this section, and the tax imposed by KRS 141.0401 in the following order: 16
(a) The economic development credits computed under KRS 1 41.347, 141.381, 17
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 18
154.12-2088; 19
(b) The qualified farming operation credit permitted by KRS 141.412; 20
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 21
(d) The health insurance credit permitted by KRS 141.062; 22
(e) The unemployment credit permitted by KRS 141.065; 23
(f) The recycling or composting equipment credit permitted by KRS 141.390; 24
(g) The coal conversion credit permitted by KRS 141.041; 25
(h) The enterprise zone credit permitted by KRS 154.45 -090, for taxable periods 26
ending prior to January 1, 2008; 27
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(i) The tax credit for cash contributions to investment funds permitted by KRS 1
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 2
154.20-258; 3
(j) The research facilities credit permitted by KRS 141.395; 4
(k) The employer High School Equivalency Diploma program incentive credit 5
permitted by KRS 151B.402; 6
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 7
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 8
(n) The clean coal incentive credit permitted by KRS 141.428; 9
(o) The ethanol credit permitted by KRS 141.4242; 10
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 11
(q) The energy efficiency credits permitted by KRS 141.436; 12
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 13
permitted by KRS 141.437; 14
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 15
(t) The railroad expansion credit permitted by KRS 141.386; 16
(u) The Endow Kentucky credit permitted by KRS 141.438; 17
(v) The New Markets Development Program credit permitted by KRS 141.434; 18
(w) The distilled spirits credit permitted by KRS 141.389; 19
(x) The film industry credit permitted by KRS 141. 383 for applications approved 20
on or after April 27, 2018, but before January 1, 2022; 21
(y) The inventory credit permitted by KRS 141.408; 22
(z) The renewable chemical production[ tax] credit permitted by KRS 141.4231; 23
(aa) The Education Opportunity Account Pr ogram[ tax] credit permitted by KRS 24
141.522; and 25
(ab) The qualified broadband investment [ tax] credit permitted by KRS 141.391; 26
and 27
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(6) After the application of the nonrefundable credits in subsection (5) of this section, 1
the refundable credits shall be taken in the following order: 2
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 3
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 4
171.397(1)(b); 5
(c) The film industry [ tax] credit permitted by KRS 141.3 83 for applications 6
approved prior to April 27, 2018, or on or after January 1, 2022; 7
(d) The decontamination[ tax] credit permitted by KRS 141.419; and 8
(e) The pass-through entity tax credit permitted by KRS 141.209. 9
Section 3. KRS 131.190 is amended to read as follows:(1) No present or former 10
commissioner or employee of the department, present or former member of a county 11
board of assessment appeals, present or former property valuation administrator or 12
employee, present or former secretary or employee of the Finance and Administration 13
Cabinet, former secretary or employee of the Revenue Cabinet, or any other person, shall 14
intentionally and without authorization inspect or divulge any information acquired by 15
him or her of the affairs of any person, or information regarding the tax schedules, 16
returns, or reports required to be filed with the department or other proper officer, or any 17
information produced by a hearing or investigation, insofar as the information may have 18
to do with the affairs of the person's business. 19
(2) The prohibition established by subsection (1) of this section shall not extend to: 20
(a) Information required in prosecutions for making false reports or returns of 21
property for taxation, or any other infraction of the tax laws; 22
(b) Any matter properly entered upon any assessment record, or in any way made 23
a matter of public record; 24
(c) Furnishing any taxpayer or his or her properly authorized agent with 25
information respecting his or her own return; 26
(d) Testimony provided by the commissioner or any employee of the department 27
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in any court, or the introduction as evidence of returns or reports filed with the 1
department, in an action for violation of state or federal tax laws or in any 2
action challenging state or federal tax laws; 3
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 4
energy resources assessed under KRS 132.820, or owners of surface land 5
under which the unmined minerals lie, factual information about the owner's 6
property derived from third-party returns filed for that owner's property, under 7
the provisions of KRS 132.820, that is used to determine the owner's 8
assessment. This information shall be provided to the owner on a confidential 9
basis, and the owner shall be subject to the penalties prov ided in KRS 10
131.990(2). The third -party filer shall be given prior notice of any disclosure 11
of information to the owner that was provided by the third-party filer; 12
(f) Providing to a third -party purchaser pursuant to an order entered in a 13
foreclosure actio n filed in a court of competent jurisdiction, factual 14
information related to the owner or lessee of coal, oil, gas reserves, or any 15
other mineral resources assessed under KRS 132.820. The department may 16
promulgate an administrative regulation establishing a fee schedule for the 17
provision of the information described in this paragraph. Any fee imposed 18
shall not exceed the greater of the actual cost of providing the information or 19
ten dollars ($10); 20
(g) Providing information to a licensing agency, the Transpo rtation Cabinet, or 21
the Kentucky Supreme Court under KRS 131.1817; 22
(h) Statistics of gasoline and special fuels gallonage reported to the department 23
under KRS 138.210 to 138.448; 24
(i) Providing any utility gross receipts license tax return information that is 25
necessary to administer the provisions of KRS 160.613 to 160.617 to 26
applicable school districts on a confidential basis; 27
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(j) Providing documents, data, or other information to a third party pursuant to an 1
order issued by a court of competent jurisdiction; 2
(k) Publishing administrative writings on its official website in accordance with 3
KRS 131.020(1)(b); or 4
(l) Providing information to the Legislative Research Commission under: 5
1. KRS 139.519 for purposes of the sales and use tax refund on building 6
materials used for disaster recovery; 7
2. KRS 141.436 for purposes of the energy efficiency products credits; 8
3. KRS 141.437 for purposes of the ENERGY STAR home and the 9
ENERGY STAR manufactured home credits; 10
4. KRS 141.383 for purposes of the film industry incentives; 11
5. KRS 154.26 -095 for purposes of the Kentucky industrial revitalization 12
credit and the job assessment fees; 13
6. KRS 141.068 for purposes of the Kentucky investment fund; 14
7. KRS 141.396 for purposes of the angel investor credit; 15
8. KRS 141.389 for purposes of the distilled spirits credit; 16
9. KRS 141.408 for purposes of the inventory credit; 17
10. KRS 141.390 for purposes of the recycling and composting credits; 18
11. KRS 141.3841 for purposes of the selling farmer credit; 19
12. KRS 141.4231 for purposes of the renewable chemical production 20
credit; 21
13. KRS 141.524 for purposes of the Education Opportunity Account 22
Program credit; 23
14. KRS 141.398 for purposes of the development area credit; 24
15. KRS 139.516 for purposes of the sales and use tax exemptions for t he 25
commercial mining of cryptocurrency; 26
16. KRS 141.419 for purposes of the decontamination credit; 27
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17. KRS 141.391 for purposes of the qualified broadband investment credit; 1
18. KRS 139.499 for purposes of the sales and use tax exemptions for a 2
qualified data center project;[ and] 3
19. KRS 139.5325 for purposes of the sales and use tax incentive for a 4
qualifying attraction; and 5
20. Section 1 of this Act for purposes of the qualified home modification 6
tax credit. 7
(3) The commissioner shall make available any information for official use only and on 8
a confidential basis to the proper officer, agency, board or commission of this state, 9
any Kentucky county, any Kentucky city, any other state, or the federal 10
government, un der reciprocal agreements whereby the department shall receive 11
similar or useful information in return. 12
(4) Access to and inspection of information received from the Internal Revenue Service 13
is for department use only, and is restricted to tax administrati on purposes. 14
Information received from the Internal Revenue Service shall not be made available 15
to any other agency of state government, or any county, city, or other state, and 16
shall not be inspected intentionally and without authorization by any present 17
secretary or employee of the Finance and Administration Cabinet, commissioner or 18
employee of the department, or any other person. 19
(5) Statistics of crude oil as reported to the department under the crude oil excise tax 20
requirements of KRS Chapter 137 and s tatistics of natural gas production as 21
reported to the department under the natural resources severance tax requirements 22
of KRS Chapter 143A may be made public by the department by release to the 23
Energy and Environment Cabinet, Department for Natural Resources. 24
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 25
submissions for the 1989 tax year, the department may make public or divulge only 26
those portions of mine maps submitted by taxpayers to the department pursuant to 27
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KRS C hapter 132 for ad valorem tax purposes that depict the boundaries of mined -1
out parcel areas. These electronic maps shall not be relied upon to determine actual 2
boundaries of mined -out parcel areas. Property boundaries contained in mine maps 3
required under KRS Chapters 350 and 352 shall not be construed to constitute land 4
surveying or boundary surveys as defined by KRS 322.010 and any administrative 5
regulations promulgated thereto. 6