Kentucky Discusses Federal Tax Reform

Kentucky discusses federal tax reform in guidance on how the federal Tax Cuts and Jobs Act of 2017 will impact taxpayers.

IRC Tie-In Date

Taxpayers filing Kentucky income tax returns will follow IRC provisions in effect on December 31, 2015, except for differences specified under state law. It is not known at this time if the General Assembly will update the IRC tie-in date.

Differences Between Kentucky Law and New Federal Law

Major differences between Kentucky and federal law that may require adjustments by income taxpayers for the 2017 tax year include:

  • the 100% bonus depreciation deduction;
  • the medical expense deduction threshold reduction;
  • the IRC Sec. 179 expensing deduction for improvements to commercial heating and air-conditioning property; and
  • certain tax relief for 2016 and 2017 natural disaster losses.

The guidance also lists examples of “minor” differences between Kentucky and federal law that may require adjustments to 2017 state income tax returns.

Kentucky and Federal Tax Reform FAQs, Kentucky Department of Revenue, January 12, 2018, ¶203-180

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