Kentucky Small Businesses Can Apply for Tax Credits by Creating Jobs, Investing in Communities

Applications received by Nov. 1 will be considered in 2026

Kentucky Gov. Andy Beshear encouraged Kentucky small businesses that are creating jobs and investing in their communities to apply for a tax credit of up to $25,000 through the Kentucky Small Business Tax Credit (KSBTC) program.

“Kentucky’s small businesses fuel our economy, and their success is a win for our entire commonwealth,” said Gov. Beshear. “Team Kentucky is committed to supporting entrepreneurs throughout the state, just as they have supported their local communities and Kentuckians through continued investments and good-paying jobs. I’m happy to see businesses using this program to ensure continued success and am excited to see more companies receive this support in the upcoming year.”

To receive the KSBTC, qualifying small businesses should apply now to ensure their best chance of approval in time for this year’s tax filings. Although approval is not guaranteed, complete applications received by Nov. 1 will be fully reviewed for 2026 tax-credit eligibility. Applications can be submitted at any time throughout the year, but applications received after Nov. 1 may not be eligible for tax credits until the 2027 tax year. Tax credits are available to eligible companies that added at least one net new full-time employee and invested $5,000 or more in qualifying equipment or technology within the past 24 months. 

“This is program helps businesses that continue to invest in their people and their future success in Kentucky,” said David Brock, executive director of KY Innovation. “The nearly 400,000 businesses employing more than 710,000 Kentuckians are the backbone of our economy and their communities. We encourage everyone who has hired people and purchased equipment in the last two years to check the program guidelines and apply by Nov. 1 if they are eligible.”

Qualifying small businesses may be eligible to receive a state income tax credit ranging anywhere from $3,500 to $25,000 per year. The tax credit amount depends on the number of jobs created and the amount invested in new equipment or technology. Most for-profit businesses with 50 or fewer full-time employees will qualify, including construction, manufacturing, retail, service and wholesale companies.

In the last year alone, the KSBTC approved businesses have received over $1.2 million for investing more than $3.9 million into their companies and creating 352 new Kentucky jobs. Since its inception, KSBTC has assisted in creating over 5,100 new jobs, generated more than $53.7 million in investments into small businesses and allocated over $17.4 million in total tax credits. 

The Kentucky Small Business Tax Credit is a signature program offered through KY Innovation, the Cabinet for Economic Development’s office that encourages growth among Kentucky’s small businesses and entrepreneurs. Other KY Innovation resources include programs providing access to credit, mentoring and advocacy. Entrepreneurs and small businesses are also encouraged to connect with the multiple resources available to them at the six regional KY Innovation Hub offices statewide.