An issue was recently discovered on 2008 Individual Kentucky returns updated to the 2009 software.  The 2008 Kentucky tax liability was updating to the 2009 Federal 1040 Schedule A line 5 (state income taxes paid) instead of the 2008 Kentucky balance due.  This affects all 2009 Kentucky individual returns.  Changes to the 2008 Kentucky 1040 system have been made. 

Programming changes will ensure that the correct amount of state income taxes paid with the 2008 Kentucky return will update properly to the 2009 Federal Schedule A, line 5.

To receive the correction, upgrade the 2008 Kentucky system. Next, reprocess the 2008 returns. Returns can be processed using the batch process feature. Open the 2009 software and update the returns that were reprocessed.

Note: Updating returns from 2008 to 2009 will cause any information already entered in 2009 to be overwritten.  Alternatively, you may manually enter the amount of tax paid with the 2008 Kentucky return on the 2009 Kentucky ES input screen in the field labeled "Prior year tax paid with return" (this amount will carry to Federal Schedule A, line 5). If the taxpayer had a 2008 Kentucky refund, you should delete the amount showing on the 2009 Kentucky ES input screen in the “Prior year tax paid with return” field.

Larry Banks