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Kentucky State Income Tax: Rates and Who Pays in 2023-2024

Kentucky offers a number of deductions, including for retirement income, military retirement income, and certain types of business income, to help reduce your taxes. Let’s explore more about Kentucky state income taxes and how to estimate them accurately with Beem.
Kentucky State Income Tax
Kentucky State Income Tax: Rates and Who Pays in 2023-2024
Kentucky is among those states offering a flat income tax rate. With more probability of reducing state income taxes in the coming future, it has become one of the most tax-friendly states in the US. Here's everything you need to know about Kentucky State Income Tax and how to file taxes for free with Beem.
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Kentucky is among those states offering a flat income tax rate. With more probability of reducing state income taxes in the coming future, it has become one of the most tax-friendly states in the United States. Kentucky also offers deductions for retirement income, military retirement income, and certain types of business income. The state also provides a credit for taxpayers donating to charitable organizations.

In this article, you will learn more about Kentucky state income taxes and how to estimate them accurately. You can save yourself from hefty fines and charges with efficient income tax calculations and timely payment. Get online tax filing assistance across all forms and statuses with Beem and never miss your tax deadline or extension.

Does Kentucky Have State Income Tax?

Yes, Kentucky State has State income tax for its residents and nonresidents. It is usually a flat income tax rate of 4.5% for all. Some counties and local government sectors also might charge several payroll taxes in addition to state income tax. The taxes are lower than in other states in the United States, and the government may reduce 0.5% further taxes if revenue and budgets find it favorable. 

With several measures to reduce taxes and make Kentucky a tax-friendly state, the state legislature aims to reduce taxes to make lifestyle more affordable in Kentucky. Other than this, as the state does not charge any tax on Social Security and railroad Retirement benefits are also exempted from taxes, more people might shift to the state for such a tax-friendly environment. 

Kentucky State Income Tax – How much will the income after tax in Kentucky with Filing Status

Annual IncomeFiling Status –
Single
Filing Status –
Married Filing Jointly
Filing Status –
Head of Household
$12000$11,575$11,800$11,800
$15000$14,220$14,650$14,650
$20000$18,470$19,400$19,340
$22000$20,170$21,300$21,040
$30000$26,835$28,490$27,840
$35000$30,985$32,740$32,071
$36000$31,815$33,590$32,901
$42000$36,795$38,690$37,881
$45000$39,285$41,240$40,371
$48000$41,775$43,759$42,861
$52000$45,095$47,079$46,181
$54000$48,287$50,399$49,501
$60000$51,207$53,719$52,821
$62000$52,667$55,379$54,481
$65000$54,857$57,869$56,971
$70000$58,507$62,019$61,121
$75000$62,157$66,169$65,271
$80000$65,807$70,319$68,951
$85000$69,457$74,469$72,601
$90000$73,107$78,619$76,251
$92000$74,567$80,279$77,711
$95000$76,757$82,769$79,901
$114000$90,388$98,084$93,660
$115000$91,098$98,814$94,370
$140000$108,848$117,064$112,120
$150000$115,948$124,364$119,220
$160000$123,048$131,664$126,320
$165000$126,598$135,314$126,598
$190000$143,788$153,564$147,576
$185000$140,638$149,914$144,070
$260000$186,955$203,545$190,936
$300000$210,955$231,945$214,936
$350000$240,955$267,445$244,936
$120000$94,648$102,464$97,920
$135000$105,298$113,414$108,570
$170000$130,148$138,964$133,420
$180000$137,248$146,264$140,520
$250000$180,955$196,445$184,936
$28000$25,175$26,790$26,140
$32000$28,495$30,190$29,540
$40000$35,135$36,990$36,221
$44000$38,455$40,390$39,541
$53000$45,925$47,909$47,011
$56000$48,287$50,399$49,501
$58000$49,747$52,059$51,161

Kentucky State Income Tax Rates and Tax Brackets

As discussed above, Kentucky has a flat tax rate of 4.5% for all its citizens. The tax is not divided based on your income level. It might affect the lower-income families more and the rich classless, but it offers an equal opportunity for all. Also, Kentucky citizens have to pay several other forms of taxes along with state income taxes. These include

Property Tax

The average property tax paid by people in Kentucky is 0.83% of their home value annually. However, there is an exemption for homeowners who are 65 or above. In 2021 and 2022, residential properties with assessed value of taxes of $40,500 or less were exempted; this year, the exemption has increased. This year, taxes of $46,350 were exempted for elderly owners. 

Other taxes in Kentucky include:

ProductTax
Cigarettes$1.10 per pack of 25
Snuff$0.19 per unit of 1.5 ounces
Chewing tobacco$0.19 for a single unit 
Other tobacco products15% of the wholesale price
Vapor products$1.50 per cartridge for closed system and 15% of the wholesale price for other products

What is Kentucky’s Standard Deduction?

Kentucky State allows a standard deduction for those taxpayers who do not itemize deductions in their income tax payments. Each year, the government takes an increased standard deduction to improve the lifestyle and condition of families in Kentucky. 

Tax Year Standard Deduction
2018$2,530
2019$2,590
2020$2,650
2021$2,690
2022$2,770
2023$2,980

How to Calculate Kentucky State Income Tax?

  • State income tax: 4.50%
  • Local income taxes: upto 2.75%
  • Sales tax: 6.00%
  • Property tax: 0.80% average percentage 
  • Gas tax: 24.6 cents for each gallon of regular gasoline, 21.6 cents for each gallon of diesel

To calculate state income tax in Kentucky, most people use a tax calculator app to estimate tax previously. However, as there are many small taxes and variations in their percentages, it is better to hire a financial advisor for such vital decisions. If you do not pay your taxes on time, 25% of unpaid taxes are added to your total sum of taxes. 

Also Read: Wyoming State Income Tax

Do I Have to Pay Kentucky State Income Tax?

Income tax is compulsory for all residents of Kentucky and nonresidents whose income is sourced in Kentucky. It is necessary to file for income tax timely and include all benefits and stand deductions to reduce taxes. 

The state income tax in Kentucky is flat 4.5% in 2023. It might also get reduced by 0.5% further in the coming times. But there is federal income tax and various other taxes as well. After including payroll taxes charged by some institutions, your income tax might rise to 8.75% in some areas in Kentucky. 

Am I a Resident for Kentucky Income Tax Purposes?

Some rules define who are eligible residents, nonresidents, or part-time residents in Kentucky. 

Resident status rules

To qualify as a Kentucky Resident, an individual must spend at least 183 days in Kentucky during the tax year.

Part-year resident status rules

The term “part-year resident” describes someone who moved into or out of Kentucky during the tax year.

Nonresident status rules

“Nonresident of Kentucky” refers to someone who did not live in Kentucky during the tax year.

Click here to know about – Kentucky Self Employment Tax

Where is My Kentucky State Income Tax Refund?

To view your status information, enter the following information:

  • Social Security number
  • Refund amount from your tax return
  • You can view the status of your refund by selecting “Get Refund Status”.

There are several reasons why your Kentucky refund may be delayed. A few of them are:

  • The department may require additional information or verify the information you reported on your return.
  • Your return may contain math errors or other adjustments.
  • Your return was completed using more than one form type.
  • There needed to be more information on your return.
Kentucky State Income Tax

Why Did My Kentucky State Income Tax Increase?

Interestingly, Kentucky law reduced personal income tax rates for 2023 and 2024 after Governor Andy Beshear signed law H.B.1 on February 17, 2023. With this development, the Kentucky income tax rate has reduced to 4.5% retroactive to January 1, 2023, and to 4.0% effective January 1, 2024. Beem will help you file your taxes online across all forms and get the maximum refund.

Kentucky Sales Tax

There is a 6% state sales tax in Kentucky. State residents do not pay local taxes. Kentucky law exempts some customers from paying sales tax. Among these are government agencies, nonprofit organizations, and merchants who purchase goods to resell. To validate each exempt transaction, sellers must collect a valid exemption or resale certificate from buyers.

  • Groceries: Exempted
  • Clothing: Taxable under Sales Tax
  • Motor Vehicles: Exempted if 6% motor vehicle usage tax is paid
  • Prescription Drugs: Exempted

5 Things to Know About Kentucky Income Tax

Here are a few facts about Kentucky state:

  • Kentucky has the highest per capita deer and wild turkey rate of any U.S. state.
  • In 2018, Kentucky legislators raised the cigarette tax by 50 cents, increasing it to $1.10 per pack of 20. It is still below the national average.
  • A gallon of liquor is subject to an excise tax of $1.92. Beer in Kentucky is taxed at 8 cents per gallon, while wine has a tax rate of 50 cents per gallon.
  • Among the commonly purchased products exempt from Kentucky sales tax are most food items (excluding candy, soft drinks, and prepared food), prescription drugs, and prosthetic devices. 
  •  The only deductions residents can now claim on their state income taxes are charitable donations, mortgage interest, and Social Security income.

Kentucky State Income Tax FAQs

Is Kentucky a high-tax state?

No, Kentucky is among the states that offer flat income tax rates and has lower income tax rates than the national average. 

Is Kentucky a tax-friendly state?

Yes, Kentucky is one of the tax-friendly states. It charges flat income tax rates for all its citizens and increases standard deductions yearly. 

Is Kentucky an excellent place to live for taxes?

Yes, Kentucky is an excellent place to live for taxes. With better credits, lower taxes, and increasing standard deductions, it is one of the most tax-friendly states in the United States. 

How much of my paycheck goes to taxes in Kentucky?

There are certain taxes other than state income tax. Usually, a resident pays around 8 to 9 percent of income in taxes. The payroll taxes charged by some institutions add to this tax as well. 

Does Kentucky tax income earned in another state?

Kentucky residents must report all income, whether earned in Kentucky or other states. It will help you get better returns on your total income. 

Does the state of Kentucky tax social security income?

No, Kentucky does not charge taxes on Social Security Income. It offers many other retirement credits as well. 

Can Kentucky state income tax go up?

Kentucky state income tax might decrease to 0.5% more, flatting 4% state-wide. If budget and revenue plans work, this reduction will make lifestyle more accessible to Kentucky residents. 

Do seniors have to pay state income tax in Kentucky?

Seniors who are 65 or above have several tax benefits in Kentucky. They are exempted up to $31,110 per person in taxes. 

Does Kentucky have a state income tax for the military?

No, Military active personnel are exempt from state income taxes from their salaries. However, individuals who earn money other than their salaries must file income tax returns. 

What are Kentucky state income taxes for LLCs?

There is a 5% flat corporate tax in Kentucky for all enterprises. However, there are no local taxes and only a 6% sales tax, which makes Kentucky a suitable tax destination for many businesses.

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Picture of Prem Kishan

Prem Kishan

A seasoned Product Manager who thrives on making a meaningful impact within the organization, Prem is deeply passionate about tackling intricate problems using cutting-edge technology and is a specialist in tax content.

Editor

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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