141.070 - Credits Allowed Individuals for Tax Paid to Other States.

141.070 Credits allowed individuals for tax paid to other states.

1. Whenever an individual who is a resident of this state has become liable for income tax to another state upon all or any part of the individual's net income for the taxable year, derived from sources without this state and subject to taxation under this chapter, the amount of income tax payable under this chapter shall be credited on the return with the income tax paid to the other state, upon producing to the proper assessing officer satisfactory evidence of the fact of the payment, except that application of any credits shall not operate to reduce the tax payable under this chapter to an amount less than would have been payable were the income from the other state ignored.
2. An individual who is not a resident of this state shall not be liable for any income tax under KRS 141.020(4) if the laws of the state of which the individual was a resident at the time the income was earned in this state contained a reciprocal provision under which nonresidents were exempted from gross or net income taxes to the other state, if the state of residence of the nonresident individual allowed a similar exemption to resident individuals of this state. The exemption authorized by this subsection shall in no manner preclude the department from requiring any information reports under KRS 141.150(2).
3. As used in this section, "state" means a state of the United States, the District of Columbia, the commonwealth of Puerto Rico, or any territory or possession of the United States.
4. Any resident entity owner of an electing entity, as those terms are defined in KRS 141.209, doing business in another state in which the tax is assessed and paid at the entity level shall be allowed a credit in accordance with subsection (1) of this section. The credit shall be based on the entity owner's distributive share of the electing entity's items of income, loss, deduction, and credit.
5. History: Amended 2023 Ky. Acts ch. 92, sec. 23, effective March 24, 2023; and ch. 148, sec. 7, effective March 31, 2023. --Amended 2018 Ky. Acts ch. 207, sec. 118, effective April 27, 2018. -- Amended 2005 Ky. Acts ch. 85, sec. 478, effective June 20, 2005. --Amended 1974 Ky. Acts ch. 163, sec. 3. -- Amended 1966 Ky. Acts ch. 255, sec. 138. --Amended 1960 Ky. Acts ch. 5, Art. III, sec. 4. --Amended 1958 Ky. Acts ch. 3, sec. 2. -- Created 1952 Ky. Acts ch. 194, sec. 3. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4281b-15, 4281b -16.
6. Legislative Research Commission Note (3/31/2023). This statute was amended by 2023 Ky. Acts chs. 92 and 148. Where these Acts are not in conflict, they have been codified together. Where a conflict exists, Acts ch. 148, which was last enacted by the General Assembly, prevails under KRS 446.250.
7. Legislative Research Commission Note (4/27/2018). Pursuant to 2018 Ky. Acts ch. 207, sec. 153, the amendments made to this statute in that Act apply to taxable years beginning on or after January 1, 2018.

Effective: March 31, 2023