Incredible, Short-sighted Kentucky Tax Change Hurts the Average Player

“On April 14, 2018, the Kentucky General Assembly passed a sweeping tax reform bill (HB 487) that officially became law on April 27, 2018. In addition to many other changes, HB 487 created a new section of Chapter 141 of the Kentucky Revised Statutes—KRS 141.019,” Coffman wrote in an email to BloodHorse. “Effective for tax years beginning on or after Jan. 1, 2018, KRS 141.019(2)(c) specifically prohibits individuals from including any deduction allowed for losses under Internal Revenue Code section 165 when calculating their net income for Kentucky tax purposes.

The state government’s Ky.gov website on changes to Kentucky tax law for 2018 also is seemingly straightforward. Under a question-and-answer section of the site where it’s asked, “Am I allowed to claim gambling losses as an itemized deduction?” the answer reads, “No. Kentucky no longer allows gambling losses to the extent of gambling winnings for tax year 2018 and thereafter. If you are reporting gambling income you received from another state, you may be allowed to credit for tax paid to another state.”