KENTUCKY FINANCIAL INCENTIVESKentucky's pro business climate provides a number of incentives for businesses. The Kentucky Economic Development Finance Authority (KEDFA) was established within the Cabinet for Economic Development to encourage economic development, business expansion, and job creation by providing financial support through an array of financial assistance and tax credit programs. Helping businesses in this way furthers the Commonwealth’s goals of achieving long-term economic growth and full employment for its citizens.” KEDFA approval is required for participation in the loan and tax incentive programs, except the Skills Training Investment credits, which are approved by the Bluegrass State Skills Corporation. KEDFA meets the last Thursday of each month. Projects must be received by the last Friday of the month prior to the KEDFA meeting date in order to be considered. Kentucky Rural Economic Development ActFor new and expanding manufacturing projects in qualified KREDA designated counties. Companies with projects approved under KREDA may potentially receive state income tax credits and job assessment fees for up to 100% of their capital investment for up to 15 years on land, buildings, site development, building fixtures and equipment used in a project. Download the KREDA PDFKentucky Jobs Development ActThis program is for new and expanding service and technology related projects. KJDA projects may receive a 100% credit against the state income tax arising from a project and may collect a job assessment fee of up to 5% of the gross wages of each employee whose job is created by the project and who is subject to Kentucky income tax. Amounts can be up to 50% of project start-up cost and up to 50% of annual facility rental cost or rental value for up to 10 years. The local community must approve the project prior to the submission of an application.Download the KJDA PDF Kentucky Industrial Development ActKIDA is for new and expanding manufacturing projects. Projects approved under KIDA may receive state income tax credits for up to 100% of its capital investment for up to 10 years on land, buildings, site development, building fixtures and equipment used in a project. Or, the company may collect a job assessment fee of 3% of the gross wages of each employee whose job is created by the approved project and who is subject to Kentucky income tax.Download the KIDA PDF Kentucky Economic Opportunity Zone ProgramCounties, urban county governments, or cities of the first class apply through KEDFA (see above) for certification of an Opportunity Zone based on qualifying census tract information. New or expanding manufacturing or service/technology companies may be permitted the following inducements under the KEOZ program: An income tax credit of up to 100% of the Kentucky income tax liability on income generated by or arising out of the project; and a job development assessment fee of up to 5% of gross wages.Download the KEOZ PDF Kentucky Investment Fund ActKIFA provides tax credits to individuals and companies who invest in approved venture capital funds. Investors in KIFA approved funds are entitled to a 40% credit against Kentucky individual or corporate income tax or Kentucky corporate license tax. KEDFA (see above) approves investment funds and fund managers.Download the KIFA PDF Direct Loan ProgramKEDFA encourages economic development business expansion and job creation by providing business loans to supplement other financing. The Direct Loan Program provides loans at below-market interest rates (subject to the availability of state revolving loan funds) for fixed asset financing for agribusiness, tourism, industrial ventures, or the service industry. Retail projects are not eligible. Download the KEDFA PDF Enterprise ZonesThis program encourages new or renewed development to targeted areas of the state by offering special tax incentives and eased regulations to businesses locating in a zone.Download the Enterprize Zone PDF Industrial Revenue BondsIRB’s issued by state and local governments in Kentucky can be used to finance manufacturing projects and their warehousing areas, major transportation and communication facilities, most health care facilities, and mineral extraction and processing projects.Download the IRB PDF Other Resources Visit the Financial Incentives Page on the Kentucky State Government Website View SKED Loans Information |