AN ACT relating to contributions made to a Kentucky qualified expense program.

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AN ACT relating to contributions made to a Kentucky qualified expense program. 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) "Contribution" means the amount contributed to a Kentucky Educational 6
Savings Plan Trust account or STABLE Kentucky accou nt on behalf of an 7
employee; 8
(b) "Kentucky Educational Savings Plan Trust account" means the trust 9
established pursuant to KRS 164A.310, to which contributions are made 10
and withdrawn upon by a beneficiary for qualified educational expenses; 11
and 12
(c) "STABLE Kentucky account" means an account established pursuant to 13
KRS 164A.260 to which contributions are made and withdrawn upon by a 14
beneficiary for qualified expenses. 15
(2) (a) For taxable years beginning on or after January 1, 2027, the Kentucky 16
Educational Savings Plan Trust account and STABLE Kentucky account 17
contribution credit shall be available for Kentucky employers making a 18
contribution to a Kentucky Educational Savings Plan Trust account or a 19
STABLE Kentucky account on behalf of one (1) or more of their employees. 20
(b) The credit: 21
1. Shall be nonrefundable and nontransferable; 22
2. May be carried forward for a period that does not exceed five (5) 23
taxable years, if unused or not used in its entirety in the current 24
taxable year; 25
3. May be claimed agai nst the tax imposed under KRS 141.020 or 26
141.040 and 141.0401. The ordering of the credits shall be as provided 27
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in Section 2 of this Act; and 1
4. Shall equal twenty percent (20%) of the total employer's contribution 2
to the Kentucky Educational Savings Plan Trust account or STABLE 3
Kentucky account, with a maximum credit of five hundred dollars 4
($500) per employee, per taxable year. 5
(3) Claims for credit shall be documented on the applicable return of the employer 6
in the manner specified by the department, i ncluding but not limited to the 7
following information: 8
(a) The employer's name, tax identification number, and address; 9
(b) The employee's name, Social Security number, and Kentucky Educational 10
Savings Plan Trust account or STABLE Kentucky account number; and 11
(c) The amount of contribution made for each employee for the taxable year in 12
which the credit is being claimed. 13
(4) (a) By November 1 of each year in which a Kentucky Educational Savings Plan 14
Trust and STABLE Kentucky account contribution credit is c laimed, the 15
department shall report to the Legislative Research Commission for referral 16
to the Interim Joint Committee on Appropriations and Revenue: 17
1. The number of returns claiming the Kentucky Educational Savings 18
Plan Trust and STABLE Kentucky account contribution credit; 19
2. The total amount of credit claimed for each taxable year; and 20
3. a. In the case of all taxpayers other than corporations, based on 21
ranges of adjusted gross income of no larger than five thousand 22
dollars ($5,000) for the taxable year , the total amount of credits 23
claimed and the number of returns claiming a credit for each 24
adjusted gross income range; and 25
b. In the case of all corporations, based on ranges of net income no 26
larger than fifty thousand dollars ($50,000) for the taxable ye ar, 27
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the total amount of credit claimed and the number of returns 1
claiming a credit for each net income range. 2
(b) The information required to be reported under this section shall not be 3
considered confidential taxpayer information and shall not be subject to 4
KRS Chapter 131 or any other provisions of the Kentucky Revised Statutes 5
prohibiting disclosure or reporting of information. 6
Section 2. KRS 141.0205 is amended to read as follows: 7
If a taxpayer is entitled to more tha n one (1) of the tax credits allowed against the tax 8
imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of 9
the credits shall be determined as follows: 10
(1) The nonrefundable business incentive credits against the tax imposed by KRS 11
141.020 shall be taken in the following order: 12
(a) The limited liability entity tax credit permitted by KRS 141.0401; 13
(b) The economic development credits computed under KRS 141.347, 141.381, 14
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 15 4.12-207, and 15
154.12-2088; 16
(c) The qualified farming operation credit permitted by KRS 141.412; 17
(d) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 18
(e) The health insurance credit permitted by KRS 141.062; 19
(f) The tax paid to other states credit permitted by KRS 141.070; 20
(g) The credit for hiring the unemployed permitted by KRS 141.065; 21
(h) The recycling or composting equipment credit permitted by KRS 141.390; 22
(i) The [tax ]credit for cash contributions in investment funds permitted by KRS 23
154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 24
154.20-258; 25
(j) The research facilities credit permitted by KRS 141.395; 26
(k) The employer Hi gh School Equivalency Diploma program incentive credit 27
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permitted under KRS 151B.402; 1
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 2
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 3
(n) The clean coal incentive credit permitted by KRS 141.428; 4
(o) The ethanol credit permitted by KRS 141.4242; 5
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 6
(q) The energy efficiency credits permitted by KRS 141.436; 7
(r) The railroad maintenance and improvement credit permitted by KRS 141.385; 8
(s) The Endow Kentucky credit permitted by KRS 141.438; 9
(t) The New Markets Development Program credit permitted by KRS 141.434; 10
(u) The distilled spirits credit permitted by KRS 141.389; 11
(v) The angel investor credit permitted by KRS 141.396; 12
(w) The film industry credit permitted by KRS 141.383 for applications approved 13
on or after April 27, 2018, but before January 1, 2022; 14
(x) The inventory credit permitted by KRS 141.408; 15
(y) The renewable chemical production credit permitted by KRS 141.4231;[ and] 16
(z) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 17
and 18
(aa) The Kentucky Educational Savings Plan Trust account and STABLE 19
Kentucky account contribution credit permitted by Section 1 of this Act; and 20
(2) After the application of the nonrefundable credits in subsection (1) of this section, 21
the nonrefundable personal tax credits against the tax imposed by KRS 141.020 22
shall be taken in the following order: 23
(a) The individual credits permitted by KRS 141.020(3); 24
(b) The credit permitted by KRS 141.066; 25
(c) The tuition credit permitted by KRS 141.069; 26
(d) The household and dependent care credit permitted by KRS 141.067; 27
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(e) The income gap credit permitted by KRS 141.066; and 1
(f) The Education Opportunity Account Program [tax ]credit permitted by KRS 2
141.522; 3
(3) After the application of the nonrefundable credits provided for in subsection (2) of 4
this section, the refundable credits against the tax imposed by KRS 141.020 shall be 5
taken in the following order: 6
(a) The individual withholding tax credit permitted by KRS 141.350; 7
(b) The individual estimated tax payment credit permitted by KRS 141.305; 8
(c) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 9
171.397(1)(b); 10
(d) The film industry [tax ] credit permitted by KRS 141.383 for applications 11
approved prior to April 27, 2018, or on or after January 1, 2022; 12
(e) The development area [tax ]credit permitted by KRS 141.398; 13
(f) The decontamination [tax ]credit permitted by KRS 141.419; and 14
(g) The pass-through entity tax credit permitted by KRS 141.209; 15
(4) The nonrefundable credit permitted by KRS 141.0401 shall be applied against the 16
tax imposed by KRS 141.040; 17
(5) The following nonrefundable credits shall be applied against the sum of the tax 18
imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) 19
of this section, and the tax imposed by KRS 141.0401 in the following order: 20
(a) The economic development credits computed under KRS 141.347, 141.381, 21
141.384, 141.3841, 141.400, 141.403, 141.407, 141.415, 154.12 -207, and 22
154.12-2088; 23
(b) The qualified farming operation credit permitted by KRS 141.412; 24
(c) The certified rehabilitation credit permitted by KRS 171.397(1)(a); 25
(d) The health insurance credit permitted by KRS 141.062; 26
(e) The unemployment credit permitted by KRS 141.065; 27
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(f) The recycling or composting equipment credit permitted by KRS 141.390; 1
(g) The coal conversion credit permitted by KRS 141.041; 2
(h) The enterprise zone credit permitted by KRS 154.45 -090, for taxable periods 3
ending prior to January 1, 2008; 4
(i) The [tax ]credit for cash contributions to investment funds permitted by KRS 5
154.20-263 in effect prior to July 15 , 2002, and the credit permitted by KRS 6
154.20-258; 7
(j) The research facilities credit permitted by KRS 141.395; 8
(k) The employer High School Equivalency Diploma program incentive credit 9
permitted by KRS 151B.402; 10
(l) The voluntary environmental remediation credit permitted by KRS 141.418; 11
(m) The biodiesel and renewable diesel credit permitted by KRS 141.423; 12
(n) The clean coal incentive credit permitted by KRS 141.428; 13
(o) The ethanol credit permitted by KRS 141.4242; 14
(p) The cellulosic ethanol credit permitted by KRS 141.4244; 15
(q) The energy efficiency credits permitted by KRS 141.436; 16
(r) The ENERGY STAR home or ENERGY STAR manufactured home credit 17
permitted by KRS 141.437; 18
(s) The railroad maintenance and improvement credit permitted by KRS 141.385; 19
(t) The railroad expansion credit permitted by KRS 141.386; 20
(u) The Endow Kentucky credit permitted by KRS 141.438; 21
(v) The New Markets Development Program credit permitted by KRS 141.434; 22
(w) The distilled spirits credit permitted by KRS 141.389; 23
(x) The film industry credit permitted by KRS 141.383 for applications approved 24
on or after April 27, 2018, but before January 1, 2022; 25
(y) The inventory credit permitted by KRS 141.408; 26
(z) The renewable chemical production [tax ]credit permitted by KRS 141.4231; 27
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(aa) The Education Opportunity Account Program [tax ]credit permitted by KRS 1
141.522;[ and] 2
(ab) The qualified broadband investment [tax ]credit permitted by KRS 141.391; 3
and 4
(ac) The Kentucky Educational Savings Plan Trust account and STABLE 5
Kentucky account contribution credit permitted by Section 1 of this Act; and 6
(6) After the application of the nonrefundable credits in subsection (5) of this section, 7
the refundable credits shall be taken in the following order: 8
(a) The corporation estimated tax payment credit permitted by KRS 141.044; 9
(b) The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 10
171.397(1)(b); 11
(c) The film industry [tax ] credit permitted by KRS 141.383 for applications 12
approved prior to April 27, 2018, or on or after January 1, 2022; 13
(d) The decontamination [tax ]credit permitted by KRS 141.419; and 14
(e) The pass-through entity tax credit permitted by KRS 141.209. 15
Section 3. KRS 131.190 is amended to read as follows: 16
(1) No present or former commissioner or employee of the department, present or 17
former member of a county board of assessment appeals, present or former property 18
valuation administrator or employee, present or former secretary or employee of the 19
Finance and Administration Cabinet, former secretary or employee of the Revenue 20
Cabinet, or any other person, shall intentionally and without authorization inspect 21
or divulge any information acquired b y him or her of the affairs of any person, or 22
information regarding the tax schedules, returns, or reports required to be filed with 23
the department or other proper officer, or any information produced by a hearing or 24
investigation, insofar as the informati on may have to do with the affairs of the 25
person's business. 26
(2) The prohibition established by subsection (1) of this section shall not extend to: 27
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(a) Information required in prosecutions for making false reports or returns of 1
property for taxation, or any other infraction of the tax laws; 2
(b) Any matter properly entered upon any assessment record, or in any way made 3
a matter of public record; 4
(c) Furnishing any taxpayer or his or her properly authorized agent with 5
information respecting his or her own return; 6
(d) Testimony provided by the commissioner or any employee of the department 7
in any court, or the introduction as evidence of returns or reports filed with the 8
department, in an action for violation of state or federal tax laws or in any 9
action challenging state or federal tax laws; 10
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 11
energy resources assessed under KRS 132.820, or owners of surface land 12
under which the unmined minerals lie, factual information about the owner's 13
property derived from third-party returns filed for that owner's property, under 14
the provisions of KRS 132.820, that is used to determine the owner's 15
assessment. This information shall be provided to the owner on a confidential 16
basis, and the owner shall be subject to the penalties prov ided in KRS 17
131.990(2). The third -party filer shall be given prior notice of any disclosure 18
of information to the owner that was provided by the third-party filer; 19
(f) Providing to a third -party purchaser pursuant to an order entered in a 20
foreclosure actio n filed in a court of competent jurisdiction, factual 21
information related to the owner or lessee of coal, oil, gas reserves, or any 22
other mineral resources assessed under KRS 132.820. The department may 23
promulgate an administrative regulation establishing a fee schedule for the 24
provision of the information described in this paragraph. Any fee imposed 25
shall not exceed the greater of the actual cost of providing the information or 26
ten dollars ($10); 27
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(g) Providing information to a licensing agency, the Transpo rtation Cabinet, or 1
the Kentucky Supreme Court under KRS 131.1817; 2
(h) Statistics of gasoline and special fuels gallonage reported to the department 3
under KRS 138.210 to 138.448; 4
(i) Providing any utility gross receipts license tax return information that is 5
necessary to administer the provisions of KRS 160.613 to 160.617 to 6
applicable school districts on a confidential basis; 7
(j) Providing documents, data, or other information to a third party pursuant to an 8
order issued by a court of competent jurisdiction; 9
(k) Publishing administrative writings on its official website in accordance with 10
KRS 131.020(1)(b); or 11
(l) Providing information to the Legislative Research Commission under: 12
1. KRS 139.519 for purposes of the sales and use tax refund on building 13
materials used for disaster recovery; 14
2. KRS 141.436 for purposes of the energy efficiency products credits; 15
3. KRS 141.437 for purposes of the ENERGY STAR home and the 16
ENERGY STAR manufactured home credits; 17
4. KRS 141.383 for purposes of the film industry incentives; 18
5. KRS 154.26 -095 for purposes of the Kentucky industrial revitalization 19
credit and the job assessment fees; 20
6. KRS 141.068 for purposes of the Kentucky investment fund; 21
7. KRS 141.396 for purposes of the angel investor credit; 22
8. KRS 141.389 for purposes of the distilled spirits credit; 23
9. KRS 141.408 for purposes of the inventory credit; 24
10. KRS 141.390 for purposes of the recycling and composting credits; 25
11. KRS 141.3841 for purposes of the selling farmer credit; 26
12. KRS 141.4231 for purposes of the renewable chemical production 27
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credit; 1
13. KRS 141.524 for purposes of the Education Opportunity Account 2
Program credit; 3
14. KRS 141.398 for purposes of the development area credit; 4
15. KRS 139.516 for purposes of the sales and use tax exemptions for t he 5
commercial mining of cryptocurrency; 6
16. KRS 141.419 for purposes of the decontamination credit; 7
17. KRS 141.391 for purposes of the qualified broadband investment credit; 8
18. KRS 139.499 for purposes of the sales and use tax exemptions for a 9
qualified data center project;[ and] 10
19. KRS 139.5325 for purposes of the sales and use tax incentive for a 11
qualifying attraction; and 12
20. Section 1 of this Act for purposes of the Kentucky Educational 13
Savings Plan Trust account and STABLE Kentucky account 14
contribution credit. 15
(3) The commissioner shall make available any information for official use only and on 16
a confidential basis to the proper officer, agency, board or commission of this state, 17
any Kentucky county, any Kentucky city, any other state, or the federal 18
government, un der reciprocal agreements whereby the department shall receive 19
similar or useful information in return. 20
(4) Access to and inspection of information received from the Internal Revenue Service 21
is for department use only, and is restricted to tax administrati on purposes. 22
Information received from the Internal Revenue Service shall not be made available 23
to any other agency of state government, or any county, city, or other state, and 24
shall not be inspected intentionally and without authorization by any present 25
secretary or employee of the Finance and Administration Cabinet, commissioner or 26
employee of the department, or any other person. 27
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(5) Statistics of crude oil as reported to the department under the crude oil excise tax 1
requirements of KRS Chapter 137 and s tatistics of natural gas production as 2
reported to the department under the natural resources severance tax requirements 3
of KRS Chapter 143A may be made public by the department by release to the 4
Energy and Environment Cabinet, Department for Natural Resources. 5
(6) Notwithstanding any provision of law to the contrary, beginning with mine -map 6
submissions for the 1989 tax year, the department may make public or divulge only 7
those portions of mine maps submitted by taxpayers to the department pursuant to 8
KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined -9
out parcel areas. These electronic maps shall not be relied upon to determine actual 10
boundaries of mined-out parcel areas. Property boundaries contained in mine maps 11
required under KRS Chapters 350 and 352 shall not be construed to constitute land 12
surveying or boundary surveys as defined by KRS 322.010 and any administrative 13
regulations promulgated thereto. 14