The Kentucky Form 4927-K calculates special tax treatment on lump-sum distributions from qualified retirement plans for participants born before January 2, 1936, mirroring federal Form 4972 while adapting to Kentucky tax rules to provide favorable averaging options that reduce the tax burden on large one-time payouts such as death benefits, ordinary income portions, or capital gains from pensions, annuities, or profit-sharing plans reported on Form 1099-R. This form qualifies only if you file the federal version, allowing exclusion of certain amounts up to $31,110 split between capital gains and regular distributions, with detailed computations for the 10-year averaging method that applies graduated rates over a decade rather than taxing the full amount at current high brackets, including adjustments for death benefit exclusions for beneficiaries of pre-1996 decedents, federal estate tax attribution, and annuity values to determine minimum distribution allowances capped at progressive percentages like 50% up to $10,000 then 20% on excess over $20,000. It integrates directly with Kentucky individual returns like Form 740, Form 740-NP, or Form 741 by transferring the final tax amount to specific lines, ensures no double-dipping on ordinary income deductions, and requires enclosing the completed form with your return, making it crucial for retirees, beneficiaries, or estates receiving substantial qualified plan distributions who want to leverage historical tax relief provisions while complying with state-specific proration and rounding rules.
What Is Kentucky Form 4927-K
Kentucky Form 4927-K computes tax on lump-sum distributions from qualified plans using special averaging rules for eligible recipients born before 1936.
How To File Kentucky Form 4927-K
Complete after federal Form 4972 and Schedule P. Enclose with Form 740, Form 740-NP, or Form 741. Mail to the Kentucky Department of Revenue with your income tax return.
How To Complete Kentucky Form 4927-K
Enter name of recipient of distribution: Provide the full name of the person receiving the distribution.
Social Security or Federal Identification Number: Enter the recipient’s SSN or FEIN.
Part I Qualifications: Confirm eligibility before proceeding.
Line 1 Are you filing federal Form 4972?: Check Yes if filing federal Form 4972. Check No if not. Stop if No and see instructions for Schedule M.
Part II Excludable Lump-Sum Income: Complete after Schedule P.
Line 2 Enter the amount from Schedule P, line 3: Copy the amount directly from Schedule P line 3.
Line 3 Subtract line 2 from $31,110: Subtract line 2 from 31110.
Line 4 Enter the amount from line 8(a) plus line 9: Add line 8(a) and line 9 from relevant schedules.
Line 5 Enter the lesser of line 3 or line 4: Take the smaller amount between line 3 and line 4.
Line 6 Amount of line 5 to be applied to capital gain distributions: Enter line 5 amount here and copy to line 8(b).
Line 7 Amount of line 5 to be applied to regular lump-sum distributions: Subtract line 6 from line 5. Copy to line 12.
Part III: Complete only if choosing 20% federal capital gain election.
Line 8a Capital gain part from Box 3, Form 1099-R: Enter capital gain from Form 1099-R Box 3.
Line 8b Enter the exclusion from line 6: Copy exclusion from line 6.
Line 8c Subtract line 8(b) from line 8(a): Subtract line 8b from line 8a. Include on Schedule M line 5, Form 740-NP line 16 Column B, or Form 741 Schedule M line 3.
Part IV: Complete to choose 10-year option.
Line 9 Ordinary income from Form 1099-R, Box 2(a) minus Box 3: Subtract Box 3 from Box 2(a) on Form 1099-R. If no Part III, use Box 2(a) taxable amount.
Line 10 Death benefit exclusion for a beneficiary of a plan participant who died before August 21, 1996: Enter applicable death benefit exclusion.
Line 11 Subtract line 10 from line 9: Subtract line 10 from line 9 for total federal taxable amount.
Line 12 Enter the exclusion from line 7: Copy exclusion from line 7.
Line 13 Subtract line 12 from line 11: Subtract line 12 from line 11 for total Kentucky taxable amount.
Line 14 Current actuarial value of annuity, if applicable: Enter from Form 1099-R Box 8 if applicable.
Line 15 Add lines 13 and 14: Add line 13 and line 14. If $70,000 or more, skip to line 20.
Line 16 Multiply line 15 by 50% (.50), but do not enter more than $10,000: Calculate 50% of line 15, cap at 10000.
Line 17 Subtract $20,000 from line 15: Subtract 20000 from line 15. Enter zero if line 15 is 20000 or less.
Line 18 Multiply line 17 by 20% (.20): Calculate 20% of line 17.
Line 19 Subtract line 18 from line 16: Subtract line 18 from line 16 for minimum distribution allowance.
Line 20 Subtract line 19 from line 15: Subtract line 19 from line 15.
Line 21 Federal estate tax attributable to lump-sum distribution: Enter federal estate tax on distribution. Do not deduct ordinary income portion on main forms.
Line 22 Subtract line 21 from line 20: Subtract line 21 from line 20.
Line 23 Divide line 14 by line 15: If line 14 blank, skip to line 26. Divide line 14 by line 15 as decimal to four places.
Line 24 Multiply line 19 by the decimal amount on line 23: Multiply line 19 by line 23 decimal.
Line 25 Subtract line 24 from line 14: Subtract line 24 from line 14.
Line 26 Multiply line 22 by 10% (.10): Calculate 10% of line 22.
Line 27 Tax on amount on line 26: Multiply line 26 by 4% (.04).
Line 28 Multiply line 27 by 10: Multiply line 27 by 10. If no line 14 entry, enter on line 32.
Line 29 Multiply line 25 by 10% (.10): Calculate 10% of line 25.
Line 30 Tax on amount on line 29: Multiply line 29 by 4% (.04).
Line 31 Multiply line 30 by 10: Multiply line 30 by 10.
Line 32 Tax on lump-sum distribution: Subtract line 31 from line 28. Enter on Form 740 line 13, Form 741 line 17(b), or include in Form 740-NP line 14. For multiple recipients, follow federal rules.