State & Local Tax Impacts of COVID-19 for Kentucky – 2020

Thoughtware Alert Published: Dec 11, 2020 | Updated: May 05, 2021

Information current as of December 31, 2020.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Kentucky

  • Kentucky is providing income tax return filing and payment extension from April 20 to July 15, 2020, for corporations, S corporations, partnerships, limited liability companies (LLC), fiduciaries, and individuals. Kentucky will waive late filing and payment penalties for taxpayers who file returns and pay taxes by the July 15 deadline.
    • DOR Notice March 22, 2020.
  • Legislative COVID-19 relief includes permission for the DOR to provide tax deadline relief to match that of the IRS without imposition of penalty or interest, as well as expanding the state’s unemployment benefits to independent contractors and providing immunity to some healthcare workers in an effort to bolster the state’s response to COVID-19’s impact.
    • S.B. 150, effective March 30, 2020.
  • Kentucky announced that for taxpayers who submit an automatic return filing extension for individual income, corporate income, and trust income taxes, the extended return filing due date will be October 15, or November 15 for C corporations.
    • Kentucky DOR Notice, April 3, 2020.
  • Kentucky’s business personal property tax return filing deadline has been extended to July 15.
    • Kentucky DOR website, April 7, 2020.
  • Kentucky has further revised return filing and payment due dates to conform with federal guidance. Income tax return filings and payments currently due on April 15, May 15, and June 15 for individual, corporate, limited liability, fiduciary, and pass-through filers, will now be due July 15, 2020, including first and second quarter estimated tax payments. Taxpayers can get an automatic six-month filing extension if they submit a request by July 15, 2020. In addition, DOR has suspended all enforced collection action.
    • Kentucky DOR Notice, April 15, 2020.
  • Kentucky specified the state doesn’t generally conform to the CARES Act. However, Kentucky does follow the federal exclusion for PPP loan forgiveness and the IRS Notice 2020-32 nondeductibility of business expenses incurred in the taxpayer’s business related to the PPP, as they are now allocable to tax-exempt income. In addition, the state clarified that employers employing Kentucky residents or nonresidents who reside in states with which Kentucky has a reciprocal agreement won’t need to change their withholding practices during the period when employees are working from home.
    • Kentucky DOR COVID-19 Tax Relief: FAQ, July 16, 2020.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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