Kentucky Itemized Deductions for Nonresidents or Part-Year Residents

Itemized Deductions for Nonresidents or Part-Year Residents
Schedule A (740-NP)
FORM

740-NP

KENTUCKY ITEMIZED DEDUCTIONS
Nonresidents or Part-Year Residents Only

SCHEDULE A
Commonwealth of Kentucky
Department of Revenue

Enter name(s) as shown on Form 740-NP, page 1.	

Interest
Expense

2023

Social Security Number

	  1	 Home mortgage interest and points reported to you on
		

federal Form 1098...............................................................................................	1	

00

	 2	 Home mortgage interest not reported to you on federal Form 1098
		

(if paid to an individual, provide that person’s name, identifying number,

		

and address)

				 2	

00

	  3	 Points not reported to you on federal Form 1098 ...............................................	3	

00

	 4	 RESERVED.........................................................................................................	4	

00

	  5	 Investment interest (enclose federal Form 4952 if required)...............................	

00

5	

	 6	 Total Interest. Add the amounts on lines 1 through 5. Enter here......................................................	6	
	  7	 Contributions by cash or check.......................................................................... 	7	

00

00

Contributions 	  8	 Other than cash or check (enclose federal Form 8283
Note: For any contribution of $250 or 		
more,
see instructions.

if over $500)........................................................................................................ 	

8	

	  9	 Carryover from prior year.................................................................................... 	9	

00
00

	10	 Total Contributions. Add the amounts on lines 7 through 9. Enter here...........................................	10	
	 11	 Gambling losses................................................................................................. 	11	
	 12	 Other (see instructions)		
Other
Miscellaneous
Deductions

12	

00

00
00

	13	 Total Other Miscellaneous Deductions. Add the amounts on lines 11 and 12. Enter here..............	13	

00

Total Itemized
Deductions
	 14	 Add the amounts on lines 6, 10, and 13. Enter here...........................................................................	14 	00
	

NOTE: If married filing separate returns, or spouse is not filing a Kentucky return, complete lines 15 through 18 below. If single
or married filing jointly, enter total deductions (line 14 above) on Form 740-NP, page 1, line 11.

15	 Enter your income from Form 740-NP, page 1, line 8...................................................................... 	

15	

16	 Enter joint or combined federal Adjusted Gross Income.................................................................. 	16	

00
00

17	 Divide line 15 by line 16. Enter percentage.......................................................................................................................... 	17	

%

18	 Multiply line 14 by line 17. This is your portion of total itemized deductions. Enter here and
	

on Form 740-NP, page 1, line 11.......................................................................................................................................	 18	

230014 42A740-NP-A (10-23)	

Page 1 of 4

00

Form 740-NP (2023)
Schedule A

	

Instructions for Schedule A

You may itemize your deductions for Kentucky even if you do not
itemize for federal purposes. Amounts entered on Schedule A
should be total deductions for the taxable period. These amounts
are prorated on Form 740-NP, page 1. If you do not itemize, you
may elect to take a standard deduction of $2,980 and it does not
have to be prorated.
Special Rules for Married Couples—If one spouse itemizes
deductions, the other must itemize. Married couples filing a
joint federal return and who wish to file separate returns for
Kentucky may: (a) file separate Schedules A showing the specific
deductions claimed by each; (b) file a joint Schedule A, divide the
total deductions between them based on the percentage of each
spouse's income to total income, and enclose a copy with each
return; or (c) each spouse may claim the standard deduction of
$2,980.
Lines 1 through 6—Interest Expense
You may deduct interest that you have paid during the taxable year
on a home mortgage. You may not deduct interest paid on credit
or charge card accounts, a life insurance loan, an automobile or
other consumer loan, delinquent taxes or on a personal note held
by a bank or individual.
Interest paid on business debts should be deducted as a business
expense on the appropriate business income schedule.
You may not deduct interest on an indebtedness of another person
when you are not legally liable for payment of the interest. Nor
may you deduct interest paid on a gambling debt or any other
nonenforceable obligation. Interest paid on money borrowed to
buy tax-exempt securities or single premium life insurance is not
deductible.
Line 1—List the interest and points (including "seller-paid points")
paid on your home mortgage to financial institutions and reported
to you on federal Form 1098.
Line 2—List other interest paid on your home mortgage and not
reported to you on federal Form 1098. Show name and address.
Line 3—List points (including "seller-paid points") not reported to
you on federal Form 1098. Points (including loan origination fees)
charged only for the use of money and paid with funds other than
those obtained from the lender are deductible over the life of the
mortgage. However, points may be deducted in the year paid if all
three of the following apply: (1) the loan was used to buy, build or
improve your main home, and was secured by that home, (2)
the points did not exceed the points usually charged in the area
where the loan was made, and were figured as a percentage of
the loan amount, and (3) if the loan was used to buy or build the
home, you must have provided funds (see below) at least equal
to the points charged. If the loan was used to improve the home,
you must have paid the points with funds other than those obtained
from the lender.
Funds provided by you include down payments, escrow deposits,
earnest money applied at closing, and other amounts actually paid
at closing. They do not include amounts you borrowed as part of
the overall transaction.

Page 2 of 4

Seller-Paid Points—If you are the buyer, you may be able to deduct points the seller paid in 2023. You can do this if the loan was
used to buy your main home and the points meet item 2 above.
You must reduce your basis in the home by those points, even if
you do not deduct them.
The seller cannot deduct these points as interest. However, they
are a selling expense that reduces the amount realized by the
seller. See federal Publication 523 for information on selling your
home.
This generally does not apply to points paid to refinance your
mortgage. Federal rules apply. See federal Publication 936 for
more information.
Line 4, RESERVED
Line 5, Interest on Investment Property—Investment interest is
interest paid on money you borrowed that is allocable to property
held for investment. It does not include any interest allocable to a
passive activity or to securities that generate tax-exempt income.
Complete and enclose federal Form 4952, Investment Interest
Expense Deduction, to figure your deduction.
Exception. You do not have to file federal Form 4952 if all three
of the following apply
(a)	 Your investment interest is not more than your investment
income from interest and ordinary dividends
(b)	 You have no other deductible investment expenses and
(c)	 You have no disallowed investment expense from 2022

	

Lines 7 through 10—Contributions
You may deduct what you actually gave to organizations that are
religious, charitable, educational, scientific or literary in purpose.
You may also deduct what you gave to organizations that work to
prevent cruelty to children or animals. In general, contributions
deductible for federal income tax purposes are also deductible
for Kentucky.
Examples of qualifying organizations are:
	

Churches, temples, synagogues, Salvation Army, Red Cross,
CARE, Goodwill Industries, United Way, Boy Scouts, Girl
Scouts, Boys and Girls Clubs of America, etc.

Page 3 of 4

	 your cash contributions or contributions of ordinary income
property are more than 30 percent of your Kentucky Adjusted
Gross Income,
	

your gifts of capital gain property to certain organizations
are more than 20 percent of your Kentucky Adjusted Gross
Income, or

	

you gave gifts of property that increased in value, made bargain
sales to charity, or gave gifts of the use of property,

	

you expect to receive any state or local tax credit for a
contribution made.

You MAY NOT Deduct as Contributions
	

Travel expenses (including meals and lodging) while away from
home unless there was no significant element of personal
pleasure, recreation or vacation in the travel.

	

Political contributions.

	

Dues, fees or bills paid to country clubs, lodges, fraternal orders
or similar groups.

	

Value of any benefit, such as food, entertainment or merchandise
that you received in connection with a contribution to a
charitable organization.

	

Cost of raffle, bingo or lottery tickets.

If you contributed to a qualifying charitable organization and also
received a benefit from it, you may deduct only the amount that
is more than the value of the benefit you received.

	

Cost of tuition.

	

Value of your time or service.

	

Value of blood given to a blood bank.

Contributions You MAY Deduct

	

Contributions may be in cash, property or out-of-pocket expenses
you paid to do volunteer work for the kinds of organizations
described above. If you drove to and from the volunteer work, you
may take 14 cents a mile or the actual cost of gas and oil. Add
parking and tolls to the amount you claim under either method.
(Do not deduct any amounts that were repaid to you.)

The transfer of a future interest in tangible personal property
(generally, until the entire interest has been transferred).

	

Gifts to:

Note: You are required to maintain receipts, cancelled checks
or other reliable written documentation showing the name of the
organization and the date and amount given to support claimed
deductions for charitable contributions.

		 Civic leagues, social and sports clubs, labor unions, and
chambers of commerce.

	

Fraternal orders if the gifts will be used for the purposes listed
above.

	

Veterans’ and certain cultural groups.

	

Nonprofit schools, nonprofit hospitals and medical research
organizations.

	

Federal, state and local governments if the gifts are solely for
public purposes.

Separate contributions of $250 or more require written
substantiation from the donee organization in addition to your proof
of payment. It is your responsibility to secure substantiation. A letter
or other documentation from the qualifying charitable organization
that acknowledges receipt of the contribution and shows the date
and amount constitutes a receipt. This substantiation should be
kept in your files. Do not send it with your return.
See federal Publication 526 for special rules that apply if:
	

your total contributions exceed 60 percent of Kentucky Adjusted
Gross Income,

	 If a Kentucky Net Operating Loss Deduction (KNOLD) is
present, you must figure your Kentucky Adjusted Gross
Income without the KNOLD before applying the 60%
limitation.  740, line 7 less Schedule M, line 15 equals your
Kentucky Adjusted Gross Income without KNOLD.
	

your total deduction for gifts of property is over $500,

	

you gave less than your entire interest in the property,

		 Individuals.
		 Foreign organizations.
		 Groups that are run for personal profit.
		 Groups whose purpose is to lobby for changes in the laws.

		 Contributions for which you receive any state or local tax
credit of more than 15% of the contribution.
Line 7—Enter all of your contributions paid by cash or check
(including out-of-pocket expenses).
Line 8—Enter your contributions of property. If you gave used
items, such as clothing or furniture, deduct their fair market value
at the time you gave them. Fair market value is what a willing buyer
would pay a willing seller when neither has to buy or sell and both
are aware of the conditions of the sale. If your total deduction for
gifts of property is more than $500, you must complete and enclose
federal Form 8283, Noncash Charitable Contributions. If your total
deduction is over $5,000, you may also have to obtain appraisals
of the values of the donated property. See federal Form 8283 and
its instructions for details.
Also include the value of a leasehold interest property contributed
to a charitable organization to provide temporary housing for the
homeless. Enclose Schedule HH.
Recordkeeping—If you gave property, you should keep a receipt
or written statement from the organization you gave the property
to, or a reliable written record, that shows the organization’s name

	

and address, the date and location of the gift and a description
of the property. You should also keep reliable written records for
each gift of property that include the following information:
(a)	 How you figured the property’s value at the time you gave it.
(If the value was determined by an appraisal, you should also
keep a signed copy of the appraisal.)

Page 4 of 4

Line 11— Gambling Losses—You may deduct gambling
losses to the extent of your winnings reported on Form 1040 or
1040–SR, Schedule 1, line 8(b).
Line 12—Other Miscellaneous Deductions
Use this line to report miscellaneous deductions. Only the
expenses listed below can be deducted on line 12.

(b)	 The cost or other basis of the property if you must reduce it by
any ordinary income or capital gain that would have resulted
if the property had been sold at its fair market value.

	

Federal estate tax on income in respect of a decedent.

	

Amortizable bond premium on bonds acquired before October
23, 1986.

(c)	 How you figured your deduction if you chose to reduce your
deduction for gifts of capital gain property.

	

Deduction for repayment of amounts under a claim of right if
more than $3,000. See federal Publication 525.

(d)	 Any conditions attached to the gift.

	

Unrecovered investment in a pension.

(e)	 If the gift was a “qualified conservation contribution” under
IRC Section 170(h), the fair market value of the underlying
property before and after the gift, the type of legal interest
donated and the conservation purpose furthered by the gift.

List the type and amount of each expense. Enter one total on
line 12. For more information on these expenses, see federal
Publication 529.

Line 9—Enter any carryover of contributions that you were not able
to deduct in an earlier year because they exceeded your adjusted
gross income limit. See federal Publication 526 for details on how
to figure your carryover.

Dividing Deductions Between Spouses—Married taxpayers
combining itemized deductions must divide the itemized
deductions if filing separate Kentucky returns or if one spouse is not
filing a Kentucky return. Complete lines 15 through 18, Schedule A.

Line 14—Total Itemized Deductions