Kentucky: Department of Revenue - Individual Income Tax

Personal Income Taxes: Filing Estimated Tax Procedures Revised

When Governor Ernie Fletcher signed House Bill 272 on March 18, 2005, he approved the most extensive reform of Kentucky’s tax code in more than half a century. Beginning with the 2005 taxable year, the following changes are in effect when calculating and submitting estimated tax payments for personal income tax.

-- The personal income tax rates for taxable years beginning on or after January 1, 2005 have changed. The rate for taxable income over $8,000 but not over $75,000 is five and eight tenths percent (5.8%). The current rate of six percent (6%) applies to taxable income over $75,000.

-- Individual owners of multi-member limited liability companies, single member limited liability companies, limited partnerships, limited liability partnerships, or S corporations that are now subject to the corporation income tax are not required to make individual income tax estimated payments based on the distributive share income of such pass-through entities beginning with the estimated payment due April 15, 2005. Individual taxpayers that own an interest in one of these corporations will receive a share of the tax paid by the entity to use as credit against tax due on the pass-through entity's income on the individual return. Check out information on how the corporation income tax applies to pass-through entities.

-- HB 272 replaced the low income tax credit with a family size tax credit (FSTC) for those individuals and married couples whose modified gross income is less than 133% of the threshold amount determined under KRS 141.066. The threshold amount is based upon federal poverty level for family size calculated by adding the taxpayers and dependent children living in the household up to four. The 2005 threshold amount is expected to be $9,570 for a family size of one, $12, 830 for a family of two, $16,090 for a family of three and $19,350 for a family of four or more. Modified gross income is equal to your federal adjusted gross income plus any interest income from other state municipal bonds and pension income from a qualifying lump sum distribution.

2005 FAMILY SIZE TAX CREDIT CHART

Family Size One		Family Size Two		Family Size Three		Family Size Four or More		Percent of Tax as FSTC
MGI is more than	MGI is not over	MGI is more than	MGI is not over	MGI is more than	MGI is not over	MGI is more than	MGI is not over	Percent of Tax as FSTC
$0 9,570 9,953 10,336 10,718 11,101 11,484 11,867 12,154 12,441	$9,570 9,953 10,336 10,718 11,101 11,484 11,867 12,154 12,441 12,728	$0 12,830 13,343 13,856 14,370 14,883 15,396 15,909 16,294 16,679	$12,830 13,343 13,856 14,370 14,883 15,396 15,909 16,294 16,679 17,064	$0 16,090 16,734 17,377 18,021 18,664 19,308 19,952 20,434 20,917	$16,090 16,734 17,377 18,021 18,664 19,308 19,952 20,434 20,917 21,400	$0 19,350 20,124 20,898 21,672 22,446 23,220 23,994 24,575 25,155	$19,350 20,124 20,898 21,672 22,446 23,220 23,994 24,575 25,155 25,736	100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

-- Individual Taxpayers who can reasonably expect to have income of more than the threshold amount for filing a return and who expect to owe more than $500 in income tax may be required to make estimated tax payments. No declaration of estimated tax is required if the estimated tax liability can reasonably be expected to be five hundred dollars ($500) or less.

-- Individual income tax taxpayers who do not prepay at least 70 percent of their income tax liability for the year will be subject to a penalty for underpayment of estimated tax.

-- Taxpayers may pay the full amount in one payment on the earliest applicable due date or they may pay in installments. Installments for calendar year 2005 are due on April 15, June 15, September 15, and January 17, 2006.

-- If you have any questions regarding estimated payments, please call 502-564-4581.

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Individual Income Tax Changes