Kentucky PTET 2026: deadline, rate, who can elect
Kentucky (KY), tax year 2026, from the same rules the connector returns. Last verified October 24, 2026.
Informational. Not tax advice.
Elective PTET
Yes
An authorized person may make an annual election for the pass-through entity to pay income tax at the entity level under KRS 141.209.
Who can elect
KRS 141.010(28), for taxable years beginning on or after January 1, 2018, defines a pass-through entity as any partnership, S corporation, limited liability company, limited liability partnership, limited partnership, or similar entity recognized by Kentucky law that is not taxed for federal purposes at the entity level and instead passes each owner's proportionate share of income, deductions, gains, losses, credits, and similar attributes. KRS 141.209 uses that term.
Section 141.209 does not add a separate entity list. The chapter definition is in section 141.010.
How the election is made
For years beginning on or after January 1, 2023, an authorized person files Form 740-PTET-ELECT or checks the box on Form 740-PTET. The election is irrevocable for that year and binds all owners.
The pass-through entity page says the owner credit is reported on Kentucky Schedule K-1, not on Form 740-PTET.
Election deadline
The 15th day of the fourth month after the close of the taxable year, or the extended due date if an extension is filed. The election may also be made during the taxable year.
The 2025 instructions state that rule for years beginning on or after January 1, 2023. The tax itself is due on the annual return due date without regard to extensions.
Rate
KRS 141.209 imposes the tax under KRS 141.020 on the electing entity, based on ordinary income and separately stated items calculated under KRS 141.206. KRS 141.020 says that for taxable years beginning on or after January 1, 2026, the tax is three and one-half percent (3.5 percent) of net income.
The 2025 PTET instructions state 4.0 percent for 2025. They are not the 2026 rate.
Owner relief
Form PTET-CR reports the tax paid on each owner's distributive share. The Department says the refundable owner credit is passed through on Schedule K-1 and is not claimed on Form 740-PTET.
The pass-through entities page describes the 2025 form change.
Estimates
For years beginning on or after January 1, 2024, an electing entity must make estimated payments if KRS 141.305 requires them. The instructions mention the penalty when payments are not made and a $500 individual threshold in that discussion.
The instructions do not list 2026 calendar dates.
Sunset or repeal
KRS 141.209 does not state an end date. It allows an annual election for taxable years beginning on or after January 1, 2022. Once made for a taxable year, the election is irrevocable and binding on all entity owners.
The section was read through the Department's authority to prescribe forms.
Sources for this year
Bonus-depreciation conformity is on its own page.