PolicyEngine · DTrim99 · May 8, 2026 · May 10, 2026 · May 10, 2026
diff --git a/changelog.d/ky-fstc-rounding-fix.fixed.md b/changelog.d/ky-fstc-rounding-fix.fixed.md
@@ -0,0 +1 @@
+Adjust the Kentucky family size tax credit rate brackets at the 1.27 and 1.33 boundaries to account for KY's 0.5-cent rounding-up convention in the Schedule ITC table.
diff --git a/policyengine_us/parameters/gov/states/ky/tax/income/credits/family_size/rate.yaml b/policyengine_us/parameters/gov/states/ky/tax/income/credits/family_size/rate.yaml
@@ -50,14 +50,14 @@ brackets:
     amount:
       2005-01-01: 0.3
   - threshold:
-      2005-01-01: 1.27
+      2005-01-01: 1.270032
     amount:
       2005-01-01: 0.2
   - threshold:
       2005-01-01: 1.3
     amount:
       2005-01-01: 0.1
   - threshold:
-      2005-01-01: 1.33
+      2005-01-01: 1.330032
     amount:
       2005-01-01: 0
diff --git a/...v/states/ky/tax/income/credits/family_size_tax_credit/ky_family_size_tax_credit_rate.yaml b/...v/states/ky/tax/income/credits/family_size_tax_credit/ky_family_size_tax_credit_rate.yaml
@@ -37,3 +37,159 @@
     tax_unit_size: 3
   output:
     ky_family_size_tax_credit_rate: 0
+
+# 2025 KY Schedule ITC uses whole-dollar "not over" cutoffs. Parameter
+# thresholds are just above the official cutoff because the single-amount
+# bracket lower bound is inclusive.
+- name: Family of 1 at $19,876 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 19_876
+    tax_unit_size: 1
+  output:
+    ky_family_size_tax_credit_rate: 0.3
+
+- name: Family of 1 above $19,876 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 19_877
+    tax_unit_size: 1
+  output:
+    ky_family_size_tax_credit_rate: 0.2
+
+- name: Family of 2 at $26,861 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 26_861
+    tax_unit_size: 2
+  output:
+    ky_family_size_tax_credit_rate: 0.3
+
+- name: Family of 2 above $26,861 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 26_862
+    tax_unit_size: 2
+  output:
+    ky_family_size_tax_credit_rate: 0.2
+
+- name: Family of 3 at $33,846 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 33_846
+    tax_unit_size: 3
+  output:
+    ky_family_size_tax_credit_rate: 0.3
+
+- name: Family of 3 above $33,846 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 33_847
+    tax_unit_size: 3
+  output:
+    ky_family_size_tax_credit_rate: 0.2
+
+- name: Family of 4 at $40,831 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 40_831
+    tax_unit_size: 4
+  output:
+    ky_family_size_tax_credit_rate: 0.3
+
+- name: Family of 4 above $40,831 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 40_832
+    tax_unit_size: 4
+  output:
+    ky_family_size_tax_credit_rate: 0.2
+
+- name: Family of 1 at $20,815 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 20_815
+    tax_unit_size: 1
+  output:
+    ky_family_size_tax_credit_rate: 0.1
+
+- name: Family of 1 above $20,815 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 20_816
+    tax_unit_size: 1
+  output:
+    ky_family_size_tax_credit_rate: 0
+
+- name: Family of 2 at $28,130 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 28_130
+    tax_unit_size: 2
+  output:
+    ky_family_size_tax_credit_rate: 0.1
+
+- name: Family of 2 above $28,130 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 28_131
+    tax_unit_size: 2
+  output:
+    ky_family_size_tax_credit_rate: 0
+
+- name: Family of 3 at $35,445 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 35_445
+    tax_unit_size: 3
+  output:
+    ky_family_size_tax_credit_rate: 0.1
+
+- name: Family of 3 above $35,445 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 35_446
+    tax_unit_size: 3
+  output:
+    ky_family_size_tax_credit_rate: 0
+
+- name: Family of 4 just below $42,760 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 42_759.88
+    tax_unit_size: 4
+  output:
+    ky_family_size_tax_credit_rate: 0.1
+
+- name: Family of 4 at $42,760 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 42_760
+    tax_unit_size: 4
+  output:
+    ky_family_size_tax_credit_rate: 0.1
+
+- name: Family of 4 above $42,760 cutoff, 2025
+  period: 2025
+  input:
+    state_code: KY
+    ky_modified_agi: 42_761
+    tax_unit_size: 4
+  output:
+    ky_family_size_tax_credit_rate: 0
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Adjust the Kentucky family size tax credit rate brackets at the 1.27 and 1.33 boundaries to account for KY's 0.5-cent rounding-up convention in the Schedule ITC table.