By Jennifer PhelanEngadget / January 12, 2018 12:38pmETK: $2,937,868Kentucky has an $8.7 billion annual budget deficit, and lawmakers are struggling to figure out how to make up the difference.
In a state where only a small percentage of residents are covered by public insurance, the state is also facing a major cost of providing education to its students.
The new tax credit program allows students to qualify for up to $1,000 in tax credits, depending on the size of their family.
“You’re getting more bang for your buck because you’re getting a tax break,” said Mark Moll, president of the American Association of State Colleges and Universities.
Kentucky’s tax credits are worth $3,800 per student per year, according to the state Department of Education.
That means the average K-11 student who earns $36,000 would receive $1.5 million in tax credit payments.
That number includes any income the student earns in the state.
“We have a $6.5 billion surplus and the tax credit has not been fully utilized,” said Scott Linn, a senior policy analyst with the Center on Budget and Policy Priorities.
“We have to make sure we get some money back from the states coffers.”
If you think you could get more tax credits in Kentucky than the average family, the chances are you’re wrong.
For example, a family of four earning $72,000 per year would get a tax credit of $2.2 million.
For a family earning $36-37,000, that would give them an average $1 million.
“I’m pretty certain that there are people that are not getting a credit that they would actually need,” said Matt Ritchie, vice president of state affairs at the Association of American Publishers.
“The vast majority of the people that don’t qualify are students,” said Ritchie.
In addition, some parents might be looking for tax credits that don�t apply to their children.
The state has a system in place to help students with special needs get the credits, but not everyone is eligible.The state�s Department of Human Services does provide an application to parents, but parents have to fill out a form detailing what special needs the student has and whether the student will qualify for the credit.
That form is available online, and parents can check it out online at the department�s website.
“A lot of the time, the parents aren�t aware of what they�re eligible for,” said Linn.
“In most cases, parents have a very poor understanding of what the tax credits do and what their child qualifies for, and so they might be getting more information that is not accurate,” said Moll.
Linn said that the state�d be surprised if a lot of parents who apply to the new credit do not get a refund.
Kentuckians will get their first glimpse of the tax incentive program on Tuesday, when the state starts to roll out the first batch of credits to students.