What are the 2023 Increased Tax Credit Limits?

Q: What are the 2023 Increased Tax Credit Limits?

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.

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.