A practical guide to the Kentucky Entertainment Incentive Program, including the 30% to 35% refundable credit, current 2026 program changes, annual funding and how the credit becomes cash.
Kentucky's Entertainment Incentive Program provides a refundable, nontransferable tax credit to qualifying motion-picture and entertainment productions.
Current Kentucky guidance describes a 30% credit on eligible production costs. The rate increases to 35% for qualifying expenditures in Enhanced Incentive Counties or for qualifying production crew composed of Kentucky residents.
For applications approved on or after January 1, 2022, the credit is refundable. Kentucky currently provides a $75 million annual program cap.
The program changed again in 2026. Kentucky filed emergency and ordinary amendments to its administrative regulation in July 2026 to implement statutory changes to the Film Office, Film Leadership Council and Entertainment Incentive Program.
Kentucky uses a refundable production-credit structure with a higher rate for qualifying Kentucky-resident crew and qualifying activity in Enhanced Incentive Counties.
Qualifying production expenditures may receive the standard Kentucky Entertainment Incentive rate.
Qualifying costs for Kentucky-resident production crew may receive the enhanced rate under current program guidance.
Qualifying production expenditures incurred in designated Enhanced Incentive Counties may receive the higher rate.
Kentucky's 2026 rule changes make current application, approval, audit and fee requirements especially important to verify.
Only qualified expenditures approved under the current KEI rules should be included in the credit base.
Confirm whether resident-crew costs or Enhanced Incentive County spending qualify for the 35% rate.
The 2026 regulation addresses certified-audit procedures required for final incentive approval.
Kentucky's emergency and ordinary administrative amendments took effect in 2026 and should be reviewed before applying.
Kentucky uses an application, council review, production-compliance and final audit process. Certain large or high-impact projects may be reviewed on an ongoing basis.
Model qualified Kentucky expenditures, project financing, workforce assumptions and potential enhanced-rate costs.
Applications are reviewed through the Kentucky Film Office and Kentucky Film Leadership Council under current program procedures.
Maintain payroll, vendor, location and production records needed to substantiate approved Kentucky expenditures.
Complete the required certified audit and final compliance process before claiming the approved refundable credit.
For applications approved on or after January 1, 2022, Kentucky's Entertainment Incentive is refundable. After final approval, the eligible taxpayer applies the credit against Kentucky tax liability and may receive eligible unused credit as a refund.
Current KEI approvals use a refundable tax-credit structure with 30% and qualifying 35% rates.
For applications approved on or after January 1, 2022, Kentucky expressly treats the KEI credit as refundable.
Current Kentucky guidance describes the credit as nontransferable. The production generally monetizes through its own tax filing and refund.
A separate buyback mechanism is unnecessary because the current credit itself is refundable.
For current refundable approvals, unused eligible credit is generally monetized through refund rather than carryforward.
Complete the production and final approval process, claim the credit on the appropriate Kentucky return and receive eligible unused credit as a refund.
Kentucky currently states that the annual Entertainment Incentive cap is $75 million.
Kentucky announced that $75 million would be available in 2026, but producers should confirm current remaining capacity before relying on projected proceeds.
Administrative amendments filed in July 2026 changed program procedures, including application, approval, audit and fee obligations.
Refundability avoids a private transfer discount, but final cash can still be reduced by disallowed costs, audit fees, professional fees, financing costs, taxes and timing.
Kentucky's Department of Revenue lists a $75 million annual cap for applications approved on or after January 1, 2022. The Cabinet for Economic Development also announced that $75 million would be available for applicants in 2026. Current remaining capacity should still be confirmed before relying on an award.
Use current Kentucky Cabinet for Economic Development, Kentucky Film Office and Department of Revenue guidance before making material production or financing decisions.
Compare Kentucky's 30% to 35% refundable credit, $75 million annual cap, enhanced-county rules and Kentucky-resident crew incentive with other U.S. film incentive programs.
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