Kentucky HB 322: AN ACT relating to a tax credit for Kentucky Education Savings Plan Trust account contributions.

Bill Text

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AN ACT relating to a tax credit for Kentucky Education Savings Plan Trust account 1
contributions. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
SECTION 1. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO 4
READ AS FOLLOWS: 5
(1) As used in this section: 6
(a) "Beneficiary" means the child, legally adopted child, grandchild, or legally 7
adopted grandchild of the individual making the contribution to a savings 8
plan trust account; 9
(a) "Contribution" means the amount contributed to a Kentucky Educational 10
Savings Plan Trust account to be used by a beneficiary as required by 26 11
U.S.C. sec. 529; 12
(c) "Kentucky Educational Savings Plan Trust account" means the trust 13
established pursuant to KRS 164A.310, to which contributions are made 14
and withdrawn by a beneficiary for qualified educational expenses; 15
(d) "Qualified educational expenses" has the same meaning as in KRS 16
164A.305; and 17
(e) "Savings plan trust" has the same meaning as Kentucky Educational 18
Savings Plan Trust account. 19
(2) (a) For taxable years beginning on or after January 1, 2022, but prior to 20
January 1, 2026, the Kentucky Education Savings Plan Trust tax credit 21
shall be available for resident taxpayers making a contribution to a 22
Kentucky Educational Savings Plan Trust account. 23
(b) The tax credit: 24
1. Shall be nonrefundable and nontransferable; 25
2. May be claimed against the tax imposed under KRS 141.020, with the 26
ordering of the credit under Section 3 of this Act; 27

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3. Shall be in an amount equal to the amount of contribution made 1
during the taxable year to the savings plan trust account for utilization 2
by a beneficiary in paying qualified education expenses; 3
4. a. Shall not exceed five thousand dollars ($5,000) for the taxable 4
year if the taxpayer is single or married filing a separate return; 5
and 6
b. Shall not exceed ten thousand dollars ($10,000) for the taxable 7
year if the taxpayers are married electing to file on a combined 8
return; and 9
5. Shall not exceed the tax liability of the taxpayer for the taxable year 10
and any excess credit during the taxable year shall not be carried 11
forward or back to any other taxable year. 12
(3) In order to evaluate the effectiveness of this credit, the department shall report 13
the following information to the Legislative Research Commission on or before 14
December 1, 2024, and on or before each December 1 thereafter, as long as the 15
credit is claimed on a tax return: 16
(a) The number of returns claiming the Kentucky Education Savings Plan 17
Trust credit; 18
(b) The total amount of credit claimed for each taxable year; 19
(c) According to the address on the return, the number of returns and the 20
amount of credit claimed by county; and 21
(d) Based on ranges of adjusted gross income of no larger than five thousand 22
dollars ($5,000) for the taxable year, the total amount of tax credit claimed 23
and the number of returns claiming a tax credit for each adjusted gross 24
income range. 25
Section 2. KRS 131.190 is amended to read as follows: 26
(1) No present or former commissioner or employee of the department, present or 27

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former member of a county board of assessment appeals, present or former property 1
valuation administrator or employee, present or former secretary or employee of the 2
Finance and Administration Cabinet, former secretary or employee of the Revenue 3
Cabinet, or any other person, shall intentionally and without authorization inspect or 4
divulge any information acquired by him or her of the affairs of any person, or 5
information regarding the tax schedules, returns, or reports required to be filed with 6
the department or other proper officer, or any information produced by a hearing or 7
investigation, insofar as the information may have to do with the affairs of the 8
person's business. 9
(2) The prohibition established by subsection (1) of this section shall not extend to: 10
(a) Information required in prosecutions for making false reports or returns of 11
property for taxation, or any other infraction of the tax laws; 12
(b) Any matter properly entered upon any assessment record, or in any way made 13
a matter of public record; 14
(c) Furnishing any taxpayer or his or her properly authorized agent with 15
information respecting his or her own return; 16
(d) Testimony provided by the commissioner or any employee of the department 17
in any court, or the introduction as evidence of returns or reports filed with the 18
department, in an action for violation of state or federal tax laws or in any 19
action challenging state or federal tax laws; 20
(e) Providing an owner of unmined coal, oil or gas reserves, and other mineral or 21
energy resources assessed under KRS 132.820, or owners of surface land 22
under which the