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Kentucky Gov. Beshear signed H.B. 301, a law designed to help make it easier for Kentucky small businesses to receive nonrefundable tax credits from the Small Business Tax Credit Program (the Program). Some of the main changes are measuring new job positions in a more flexible manner. The time at which a new job position is measured from is no longer measured by comparing Dec. 31 to the prior Dec. 31. The new law also enables businesses to use averages in terms of hourly wages and hours given to new employees instead of meeting the minimum standards uniformly throughout the measurement period. As such, more small businesses should qualify for the tax credit.

Under the Program, a small business may qualify for up to a $25,000 credit each year. A “small business” under the Program is “any business entity organized for profit...that has fifty (50) or fewer full-time employees at the time it applies.” In order to be eligible for the credit under the revised Program, a small business must create and fill one or more eligible positions and invest at least $5,000 in qualifying equipment or technology within a six month period. Further, any eligible position created must be maintained for at least 12 months, provide an average wage of no less than 150 percent of the federal minimum wage, and provide an average of at least 35 weekly hours to the employee. In addition, any unused credits may be carried forward for up to five years. However, as noted above, the credit is nonrefundable.

After signing the bill, Gov. Beshear touted the merits of the law and economic progress in Kentucky in a release from his office. “Entrepreneurship is at an all-time high in Kentucky, and we need to support these companies every step of the way,” said Gov. Beshear. “This new law will provide a much-needed financial boost to small businesses as they grow their ideas and create more jobs.”