Knowing Kentucky’s tax filing procedures is essential if you want to keep out of trouble with the law or fines. One of the 43 states that requires people to submit both a state and federal tax return is Kentucky. The amount you must earn in Kentucky in order to submit taxes varies depending on your filing status and income level.
If you are a single taxpayer under 65 and your gross income is $12,960 or more, you must submit a Kentucky state tax return. If your gross income is $14,690 or over and you are over 65, you must file a state tax return. The minimal gross income required to submit a Kentucky state tax return for married couples filing jointly who are both under 65 is $25,920. The minimal gross income for married couples over 65 is $27,650.
The Kentucky Partnership Income Tax Return, often known as Kentucky Form PTE, is not a recent invention. It is a tax form used by partnerships, LLCs, and other organizations that distribute profits or losses to their members or partners. Each partner’s share of income, credits, deductions, and taxes is reported on this form.
The Kentucky LLET, or Limited Liability Entity Tax, is a fee for conducting business there. The entity’s gross revenues, or the entire amount of income the entity received from all sources during the taxable year, are used to determine the LLET. With a minimum tax of $175, the tax rate for LLET is 0.175% of the entity’s gross receipts.
Eligible entities may use the Kentucky Limited liabilities Entity Credit to offset a portion of their LLET liabilities. The credit is determined by the LLET paid, and it is limited to a maximum of 50% of the entity’s tax due. The organization must fulfill specific requirements, such as having fewer than 50 employees, being set up as a company or LLC, and being registered in Kentucky, in order to be eligible for the credit.
Last but not least, LLC and LLE are different. Limited Liability Companies, or LLCs for short, are a type of business organization that combines the advantages of corporations and partnerships. However, Kentucky uses the word LLE, which stands for a limited liability entity, to refer to all entities covered by LLET, including partnerships, LLCs, and other pass-through entities.
In conclusion, Kentucky taxpayers should be aware of the state’s income- and filing-based tax filing requirements. Partnerships, LLCs, and other businesses that pass through revenue or loss to their partners or members use the Kentucky Form PTE. The LLET is based on the entity’s gross receipts and is a tax on the right to conduct business in Kentucky. Eligible entities may use the Kentucky Limited liabilities Entity Credit to offset a portion of their LLET liabilities. Finally, it should be noted that while LLE is a word used by Kentucky to refer to all businesses subject to LLET, LLC is a form of corporate structure.