FRANKFORT, Ky. (Nov. 2, 2020) – Kentucky small businesses have the opportunity to claim a tax credit of up to $25,000, but time is running out to include the credit on 2020 tax returns.
Through the Kentucky Small Business Tax Credit (KSBTC) program, small businesses need to apply in early November to secure their best chance of approval in time for this year’s tax filings. Tax credits are available to most companies that added at least one new full-time employee and invested $5,000 or more in qualifying equipment or technology within the past 24 months.
“Small businesses are an essential driver of our state’s economy, and we want every eligible company to have the best chances for growth and success,” said Ellie Puckett, deputy executive director of KY Innovation within the Kentucky Cabinet for Economic Development. “This program has long helped make that possible by supporting companies that add jobs and invest in their futures. During a time when many businesses need assistance, it’s even more important they participate, if they qualify. Kentucky is home to an incredible, diverse network of small businesses and we hope to see continued expansion in the years ahead.”
Qualifying small businesses may be eligible to receive a state income tax credit ranging from $3,500 to $25,000 per year. The tax credit amount depends on the number of jobs created and the amount invested in new equipment. Most for-profit businesses of 50 or fewer full-time employees qualify, including construction, manufacturing, retail, service and wholesale companies.
In 2019, the program incentivized the creation of 487 private-sector jobs and over $4.1 million in investments by 151 small businesses. On average, each participating company hired three people and received more than $10,000 in tax savings. Since inception, the program has assisted in creating over 2,800 jobs and $27 million in new investments.
KSBTC is a program of the Cabinet’s KY Innovation office, which encourages growth among Kentucky’s startups and small businesses. Other resources through KY Innovation include programs providing access to credit, mentoring and advocacy. Entrepreneurs and startups also can connect with multiple resources at Regional Innovation for Startups and Entrepreneurs (RISE) offices statewide.
To learn more about the Kentucky Small Business Tax Credit program or to apply, visit www.KentuckyTaxCredit.org or contact the Kentucky Cabinet for Economic Development at 1-800-626-2930.