March 18, 2025
The Kentucky General Assembly finished the final days before taking their 10-day break in a whirlwind of legislation that resulted in more than 100 bills being sent to the Governor’s desk for either his signature, veto, or to become law without his signature. Let’s cover some of the highlights most relevant to our membership.
HB1 lowered the income tax rate from 4 percent to 3.5 percent, while HB775 also passed both houses and lowered the metrics for future deductions and allowed the increment when lowering Income Tax to drop from .5 percent to .25 percent and .1 percent in future years, while also conforming Kentucky Tax Code to the Internal Revenue Code through Dec 31, 2025. The General Assembly also provided for flood relief.
Closer to home, our own Board of Accountancy submitted two bills this session, HB261 and HB262, which both passed and are awaiting their final verdict on the Governor’s desk. HB261 allows retired CPA’s to offer certain uncompensated services to the public if they complete a CPE waiver based on retirement beforehand. HB262 eliminates limitations on the naming rights of smaller CPA firms upon the death or retirement of an owner.
The General Assembly is now on break before returning for the final two days of the legislative session on March 27 and 28. It is during this break that the Governor will review, sign or veto legislation passed so far, and when the General Assembly returns, they will be able to potentially override any vetoes.
Click here to view the bills we are prioritizing and tracking.
Weekly Legislative Updates began Jan. 27, 2025. Watch your email, members will receive these each Monday throughout the 2025 Session.
- Click here to find your legislator.
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Tax deadline extensions
Tax relief for Kentucky individuals and businesses affected by Feb. 2025 storms, winds, flooding and landslides. Click here to view the latest regarding federal, state and local government tax relief.
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Corporate Transparency Act (CTA) Update
Feb. 27, 2025
FinCEN not issuing fines or penalties in connection with Beneficial Ownership Information reporting deadlines - Click here to view the full press release.
FinCEN updated its website on Feb. 19, 2025.
Beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect.
Updated Deadlines
- For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
- Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.
- As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.
- For updates on other litigation related to the Corporate Transparency Act and its effect on reporting requirements for certain plaintiffs, see alerts here.
Important update for 2025 tax filers
The Kentucky Department of Revenue (KY DOR) recently announced that beginning March 14, 2025, MyTaxes will replace OneStop for business tax filers. Starting February 26, there will be a two-week operations pause at KY DOR to prepare for this transition.
Timing
February 26 until March 14, KY DOR operations will temporarily halt. It was decided to be one of the best time frames to shift to a new business tax system based on the business tax deadline schedule. This time period will allow KY tax filers a full month to file both before and after the operations pause.
Implementation details
The first phase of this transition will not affect individual income tax returns, though there will be a delay in acknowledgements until after the February 26 – March 14 break. For Corporate, LLET and NRWH returns, direct filing with the state will not be possible. However, these returns can still be filed through a vendor or other software. Like individual income tax returns, acknowledgments for these submissions will not be issued until after March 14. Withholding K-1 returns, on the other hand, cannot be filed during the break. KY DOR will release more details for phases 2 and 3 soon.
Next Steps
Existing OneStop users will be converted into the new MyTaxes portal and will maintain access to all previously linked businesses. OneStop users will receive an email in early March with their new user ID and instructions for initial login. Each User ID can be linked to multiple businesses, each FEIN or SSN does not require its own login ID. Any fees, penalties or interest incurred due to a system malfunction with not be collected. Historical records will no longer be able to be accessed on the new system after February 26, so it is highly recommended that you prepare the necessary materials by printing or downloading them now. The records are being archived, and will be accessible, but there will be a lengthier turnaround time to receive those records.
Questions?
KY DOR is creating a phone helpline for those needing assistance in this transition. This helpline will go live on February, 1, 2025 and can be reached at 502-764-5555.
Email: portalhelp@ky.gov
Click here for the KY DOR’s webpage regarding this transition.