2023 Tax Credit Limits Based on Filing Status:
Tax Filing Status | Previous Limit | New Limit |
Single Filer | $1,000 | $2,500 |
Married Separate Filer | $1,250 | $2,500 |
Married Joint Filer | $2,500 | $5,000 |
Pass-Through Owner (not making HB 149 election)* | $10,000 | $25,000 |
C Corp, Trust, or Pass-Through electing to pay tax at the entity level (HB 149) | 75% of annual tax liability | |
New for 2023: Business that pays insurance premium tax | 75% of annual tax liability, but credit shall not exceed $1 million |
*Pass-through income required to support a $25,000 tax credit is $434,783 ($25,000 divided by .0575 = $434,783). Keep in mind that income
from the pass-throughs can include both profits (K-1) and wages (W-2) income. Pass-through income required to support a $10,000 tax credit
is $173,913. *For 2023, the tax credit cap increased to $120 million per year from $100 million per year.