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​Total Available Endow Kentucky Tax Credit as of 9/09/2021

​For Fiscal Year Ending June 30, 2022:
​$1,000,000
​Amount Allocated to Date:
​$1,000,000
​Remaining Amount Available to Taxpayers:
​$0
​Date Last Application Processed:
7/29/2021

Endow Tax Credit

The endow tax credit is a non-refundable and non-transferable credit that may be applied against income taxes imposed by KRS 141.020 (individual income tax) or KRS 141.040 (corporation income tax) and the limited liability entity tax (LLET) imposed by KRS 141.0401. The endow tax credit is a tax credit calculated based upon an endowment gift to a permanent endowment fund of a qualified community foundation or county-specific component fund or affiliate community foundation. The credit is equal to 20% of the value of the endowment gift, not to exceed $10,000 per taxpayer. The application process is outlined below. The endow tax credit can be carried forward up to five years on your income tax return.


Application Process

The Application for Preliminary Authorization of the Endow Kentucky Tax Credit, ENDOW Application, shall be used to obtain preliminary approval of the tax credit and must be filed via fax, email, or hand delivery to the Department by July 1 following the close of the preceding calendar year. If you plan to hand deliver the application, please call or email ahead to schedule a delivery time to ensure a person is there to receive and time stamp the application. Credit certification cannot be guaranteed for schedules sent through regular mail. All applications received between July 1 and July 7, will be considered as being filed at the same time. Additional guidance regarding acceptance and consideration of an application is set forth in 103 KAR 15:195. The department will review all preliminary applications received and provide notice of the preliminary approval within 30 days. After receiving preliminary authorization from the department, provide an endowment gift to a qualified community foundation, county-specific component fund, or affiliate community foundation which has been certified under KRS 147A.325 within thirty (30) days of the date of the notice of authorization for the tax credit from the department. Within 10 days of making the gift, report to the Department proof of the endowment gift.  


Forms Required to Claim the Tax Credit

The Notice of Endow Kentucky Tax Credit and Certification, Schedule ENDOW, is sent to the taxpayer for their records.  A copy is required to be attached to the tax return on which the credit is claimed. Taxpayers who receive a share of the Endow credit via a Kentucky K-1 through their ownership in a pass-through entity must complete and file Schedule TCS for corporations and pass-through entities or Schedule ITC for individuals. These schedules should be completed to reflect the taxpayer's share of the credit. The Schedule TCS or Schedule ITC is required to be attached to any return on which the credit is claimed. A copy of the credit certificate issued by the department must be attached to their tax return. These forms may be found on the DOR Find a Form webpage.


Who Can Claim the Credit?


​Pass-through Entities

​A pass-through entity (partnership, S-Corporation, LLC, general partnership, trust, etc.) may apply the ENDOW credit against the LLET on its Kentucky Income and LLET Return and pass the credit through to its members, partners, or shareholders in the same proportion as the distributive share of income is passed through with the ordering of the credits under KRS 141.0205.

The credit is passed through to the partners, members, or shareholders of a pass through entity that are the partners, members, or shareholders at the time of the application and subsequent approval of the credit.  The income is reported on the Kentucky Schedule K-1 and any credit that is passed through to the members, partners, or shareholders may be used against individual income tax or corporate income tax and LLET. 


Individuals

A sole proprietor reporting business income on Schedule C (federal Form 1040) may claim the ENDOW credit under the business name. An individual may also claim the credit if it is passed through to them from a partnership, LLC, or S-Corporation on a Kentucky Schedule K-1. 

If a taxpayer and spouse are entitled to claim the credit, the credit may be wholly claimed if they file jointly, but must be split if they file separately. If the application lists only one of the spouse's names, the listed spouse is entitled to claim the full credit.


​Corporations

A corporation may apply the ENDOW credit against income tax and LLET on its Kentucky Corporation Income Tax and LLET Return. A corporation may also claim the credit if it is passed through to them from a pass-through entity on a Kentucky Schedule K-1.




​Applicable Forms

ENDOW Application

Schedule ENDOW

Schedule ITC (Individual Filers)

Schedule TCS (Corporate and Pass-Through Filers)

Endow Kentucky Tax Credit

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