For 2025, form PTET has been updated to remove the line for reporting business tax credits. Business tax credits are not claimed on the 740-PTET or NRWH. Business tax credits, including the refundable pass-through entity tax credit allowed to an entity owner when the election for the tax to be imposed at the entity level is made, are passed to the individual or entity from Kentucky Form PTE, Schedule K/Schedule K-1, Line 13. Business tax credits are claimed on either the individual income tax return KY 740 or Schedule ITC against tax imposed by KRS 141.020, or the Corporate/Pass Through Entity return (Form 720, 725, PTE) or Schedule TCS for tax imposed by KRS 141.040 and KRS 141.0401. Therefore, the Department has removed the lines for reporting business tax credits from the form PTET.
Taxpayers will not need to file amended returns. Taxpayers may submit a written request for a waiver of underpayment penalties assessed as a result of a pass-through entity’s use of the entity owners’ credits to calculate estimated tax payments. Waiver requests may be submitted via email through the Department of Revenue’s Contact Us webpage,
Contact Us - Department of Revenue, and selecting the appropriate taxing area.