Investing in Communities: Can Apply for Tax Credits;
Applications received by Nov. 1 will be fully reviewed for consideration in 2025
Gov. Andy Beshear encouraged Kentucky’s small businesses that are creating jobs and investing in our communities to apply for a tax credit of up to $25,000 through the Kentucky Small Business Tax Credit (KSBTC).
“Kentucky’s economy is thriving, and our small businesses are a big reason why,” Gov. Beshear said. “This program helps support our small businesses, just as they’ve supported our local communities and our people through strong investments and good-paying jobs. I’m happy to see business owners and entrepreneurs using this program to ensure continued success, because their impact across Kentucky will last for many generations to come.”
To receive the KSBTC, qualifying small businesses should apply now to ensure their best chance of approval in time for this year’s tax filings. Although approval is not guaranteed, complete applications received by Nov. 1 will be fully reviewed for 2025 tax-credit eligibility. Applications can be submitted at any time throughout the year, but applications received after Nov. 1 may not be eligible for tax credits until the 2026 tax year. Tax credits are available to eligible companies that added at least one net new full-time employee and invested $5,000 or more in qualifying equipment or technology within the past 24 months.
“This program is a vital way to support businesses that are investing in themselves and their fellow Kentuckians,” said David Brock, executive director of KY Innovation. “The tax credit continues to provide a significant boost to businesses for growing their business and increasing employment across Kentucky. If your business has hired people and purchased equipment in the last two years, you should see if you are eligible and qualify. We strongly encourage businesses to apply as soon as possible but not later than Nov. 1 to ensure they can claim a tax credit for the current year.”
Qualifying small businesses may be eligible to receive a state income tax credit ranging anywhere 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 or technology. Most for-profit businesses with 50 or fewer full-time employees will qualify, including construction, manufacturing, retail, service and wholesale companies.
“Since receiving the small business tax credit our number of employees has doubled,” said Marshall Butler, president and co-founder of Volta, a Frankfort-based IT services company. “The small business tax credit allows us to be able to really make more investments in our business. It allows us to be able to compete, in a fashion, with the larger companies with the skills, resources and people we can get access to, and gives us a break, from a financial perspective, to be able to invest in those people.”
This year alone, the KSBTC program has spurred small business owners to invest more than $1.2 million in their companies, awarding nearly $570,000 in tax credits and creating 167 new, Kentucky jobs. Since its inception, KSBTC has assisted in creating over 4,843 new jobs, generated more than $50 million in investments into small businesses and allocated over $16.3 million in total tax credits.
The Kentucky Small Business Tax Credit is a signature program offered through KY Innovation, the Cabinet for Economic Development’s office that encourages growth among Kentucky’s small businesses and entrepreneurs. Other KY Innovation resources include programs providing access to credit, mentoring and advocacy. Entrepreneurs and small businesses are also encouraged to connect with the multiple resources available to them at the six regional KY Innovation Hub offices statewide.
To learn more about this program, and others offered by KY Innovation – and to access the current version of the KSBTC application – visit kytaxcredit.org, contact the Kentucky Cabinet for Economic Development at 800-626-2930, or email info@kyinnovation.com.
