Kentucky small businesses that create jobs and invest in their communities can apply for a tax credit of up to $25,000 through the Kentucky Small Business Tax Credit program.
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.
“Kentucky’s small businesses fuel our economy, and their success is a win for our entire commonwealth,” said Governor Andy Beshear in a press release. “Team Kentucky is committed to supporting entrepreneurs throughout the state, just as they have supported their local communities and Kentuckians through continued investments and good-paying jobs. I’m happy to see businesses using this program to ensure continued success and am excited to see more companies receive this support in the upcoming year.”
To receive the Kentucky Small Business Tax Credit, 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 2026 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 2027 tax year.
“This is program helps businesses that continue to invest in their people and their future success in Kentucky,” said David Brock, executive director of KY Innovation in a press release. “The nearly 400,000 businesses employing more than 710,000 Kentuckians are the backbone of our economy and their communities. We encourage everyone who has hired people and purchased equipment in the last two years to check the program guidelines and apply by Nov. 1 if they are eligible.”
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.
The Kentucky Small Business Tax Credit is a program offered through KY Innovation, the Cabinet for Economic Development’s office that encourages growth among Kentucky’s small businesses and entrepreneurs.
To learn more about this program and others offered by KY Innovation, and to access the current version of the Kentucky Small Business Tax Credit application, click here, or contact the Kentucky Cabinet for Economic Development at 800-626-2930, or email info@kyinnovation.com.
