Kentucky · Economic Development · KY-KBI-001
Kentucky Business Investment Credit
Publication revised September 24, 2026. Sourcebook page 122.
Credit amount / calculation
Project-specific approved tax credits and wage assessments tied to eligible costs and new employment.
Business fit and eligible activity
New or expanding manufacturers can receive negotiated income/limited are met. Qualified investment or approved project activity; confirm eligible property, location and taxpayer type.
Eligibility and practical use
The credit is worth screening because it reaches a business activity that occurs regularly in forest products, even though the program is not written specifically for the industry.
Illustrative business benefit
Use-of-credit illustration, not an estimated award: assume the agency or completed tax form establishes a $1,000 credit for the qualifying activity described above. If sufficient eligible tax is due, a $1,000 credit available for current use reduces that tax by $1,000. If annual limits allow only $600, that is this year's saving; the other $400 survives only if the carryforward or transfer rules permit. Obtain the actual program calculation before estimating a project benefit.
Timing / first action
Seek approval before starting the overall project, including site work or construction. Contact the administering agency and secure the required approval before the project is publicly or contractually committed. liability entity tax credits when job, wage and investment requirements
Official sources
- cedky.com — July 2026 (cedky.com)
Related programs
Historic Rehabilitation Tax Credit
Percentage of qualified rehabilitation expenditures subject
Certified historic mills and industrial properties can qualify for a state rehabilitation credit.
Kentucky Reinvestment Act Credit
Credit against corporate income/limited liability entity
Existing manufacturers can receive credits for qualifying reinvestment/modernization projects.
Qualified Research Facility Tax Credit
5% of qualified construction, remodeling and equipment costs
A business constructing/remodeling/equipping a research facility can claim a straightforward credit.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Clean Electricity Production Credit (Internal Revenue Code §45Y)
Production-based
Alternative to the investment credit for owners/operators of qualifying clean-electricity facilities; potentially relevant to qualifying on-site generation.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.