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Kentucky Income Tax Calculator

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Overview of Kentucky Taxes

Kentucky has a progressive income tax with rates that are slightly higher than the national average. Both sales and property taxes are below the national average. Retired? Use our Retirement Income Tax Calculator.

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Your Income Taxes Breakdown

Tax Type Marginal 
Tax Rate
Effective 
Tax Rate
2017 
Taxes
2018 Trump Taxes*
Federal
FICA
State
Local
Total Income Taxes
Income After Taxes

* These will be the taxes owed for the 2018 - 2019 filing season.

Under the Trump Tax Plan (2018-2019 filing season), your Federal Income Tax will be and your FICA will be .

Changes to Your Federal Income
Taxes Under the Trump Tax Plan

  • Your marginal federal income tax rate will
  • Your effective federal income tax rate will
  • Your federal income taxes will

Total Estimated Tax Burden

Income Tax $
Sales Tax $
Fuel Tax $
Property Tax$
Total Estimated Tax Burden $
Percent of income to taxes = %
$
  • Our Tax Expert

    Jennifer Mansfield, CPA Tax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

    ...read more
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Kentucky state tax quick facts
  • State income tax: 5%
  • Local income taxes: 0.015% - 3.55%
  • Sales tax: 6%
  • Property tax: 0.85% average effective rate
  • Gas tax: 26 cents per gallon of regular gasoline, 23 cents per gallon of diesel

The Bluegrass State has a fairly typical tax system. As of early 2018, the state has a flat income tax rate of 5%, a statewide sales tax of 6% and property taxes that average $1,078 annually. Both the sales tax and the property taxes are below the national averages, while the state income tax is right around the national average.

There are, however, two unique aspects of Kentucky’s tax system. The first is local income tax rates, which are collected by both counties and cities, and range from 0.015% up to 3.55% of resident incomes. The second is its inheritance tax. Kentucky is one of just six states to impose a tax on inheritances. Below we will take an in-depth look at each of these taxes, as well as any rules or exceptions that could save you money.

Kentucky Income Tax

Kentucky is one of nine states that imposes a flat income tax. This differs from the federal income tax, which has higher rates for higher income levels. The income tax rate in the state is 5%. Before 2018, the state had rates ranging from 2% to 6%.

To calculate taxes owed, taxpayers in Kentucky must make certain additions and subtractions to their federal adjusted gross income (AGI). The result is Kentucky taxable income, to which the above rates are applied. Filing taxes can be hard, but tax preparation software like Credit Karma and H&R Block are meant to make it easier.

Many types of retirement income that are taxable at the federal level are not taxable in Kentucky. Social security benefits are exempt, as is retirement income from any Kentucky governmental retirement systems. Pension and annuity income up to $31,110 is also exempt. Interest from federal obligations (treasury notes, etc.) is exempt, while interest income from the municipal bonds of other states is taxable. Active duty military pay is also exempt from state taxes in Kentucky.

Kentucky Tax Credits

There are a number of additional credits available to families and parents in Kentucky. These include the Child and Dependent Care Credit, which is equal to 20% of the federal credit by the same name; the Family Size Tax Credit, available to low-income families; and the Education Tuition Tax Credit. When reforming the state tax code in early 2018, legislators eliminated most deductions. The only deductions that residents can now claim on their state income taxes are for charitable donations, mortgage interest and Social Security income.

Kentucky Occupational Taxes

In addition to the state income tax, many counties and cities in Kentucky levy what are called “occupational taxes.” In general, these taxes apply to wages, not to Kentucky taxable income. That means there are no deductions, exemptions or credits applicable to these taxes.

The table below shows the occupational tax rate for every county and the largest cities in Kentucky that have one. For cities that are within a county with its own tax, both taxes must be paid and the table reflects total rates.

KY Local Income Tax Rates

CountyCounty Income Tax Rate
Allen1.00%
Ballard1.00%
Bath1.50%
Boone0.80%
Bourbon0.75%
Boyd1.00%
Boyle0.75%
Breathitt1.00%
Butler1.00%
Caldwell1.50%
Campbell1.05%
Carroll1.00%
Clark1.50%
Clay1.00%
Clinton1.25%
Crittenden0.50%
Cumberland1.25%
Daviess0.35%
Estill1.25%
Fayette2.25%
Franklin1.00%
Gallatin1.00%
Garrard1.50%
Graves1.00%
Grayson0.50%
Hancock1.25%
Harrison1.50%
Hart0.80%
Henderson1.00%
Hopkins0.50%
Jackson1.85%
Jefferson1.25%
Jessamine1.00%
Johnson0.50%
Kenton0.71%
Knox1.00%
Laurel1.00%
Leslie1.00%
Lexington2.25%
Lincoln1.00%
Livingston1.00%
Logan0.75%
Madison1.00%
Magoffin1.00%
Marion1.00%
Marshall1.00%
Martin1.00%
McCracken1.00%
McCreary1.00%
McLean1.00%
Menifee1.00%
Mercer0.45%
Metcalfe1.00%
Monroe1.00%
Montgomery1.00%
Morgan0.50%
Nelson0.50%
Nicholas1.00%
Ohio1.00%
Pendleton0.50%
Pike1.00%
Powell1.00%
Pulaski0.00%
Robertson1.50%
Rockcastle1.50%
Rowan1.00%
Russell0.75%
Scott1.00%
Shelby1.00%
Simpson0.75%
Spencer0.80%
Taylor1.00%
Todd1.00%
Union0.50%
Warren1.00%
Washington0.75%
Wayne0.90%
Whitley1.00%
Wolfe1.25%
Woodford1.50%
CityCity RateCounty RateTotal Local Income Tax
Alexandria1.50%1.05%2.55%
Ashland2.00%1.00%3.00%
Bardstown0.50%0.50%1.00%
Beaver Dam0.00%1.00%1.00%
Bellevue2.50%1.05%3.55%
Benton0.50%1.00%2.00%
Berea2.00%1.00%3.00%
Bowling Green1.85%1.00%3.35%
Campbellsville1.00%1.00%2.00%
Carrollton0.00%1.00%1.00%
Central City0.00%0.00%0.00%
Cold Spring1.00%1.05%1.05%
Columbia1.00%0.00%0.00%
Corbin0.00%1.00%1.00%
Covington2.45%0.71%3.16%
Crescent Springs1.00%0.71%0.71%
Crestwood0.00%0.00%0.00%
Crittenden0.00%0.00%0.00%
Cynthiana1.50%1.50%3.00%
Danville1.25%0.75%2.00%
Dayton2.00%1.05%3.05%
Douglass Hills0.00%1.25%0.00%
Edgewood1.00%0.71%0.71%
Elizabethtown1.35%0.00%1.35%
Elsmere1.25%0.71%0.71%
Erlanger1.50%0.71%2.21%
Flatwoods0.00%0.00%0.00%
Florence2.00%0.80%3.45%
Fort Mitchell1.00%0.71%0.71%
Fort Thomas1.25%1.05%2.30%
Fort Wright1.15%0.71%0.71%
Frankfort1.95%1.00%2.95%
Franklin1.00%0.75%1.75%
Georgetown1.00%1.00%2.50%
Glasgow1.50%0.00%1.50%
Grayson1.00%0.50%1.00%
Greenville0.00%0.00%0.00%
Harrodsburg1.00%0.45%1.45%
Hazard1.25%0.00%1.75%
Henderson1.00%1.00%1.00%
Highland Heights1.00%1.05%1.05%
Hillview1.50%1.25%1.50%
Hodgenville0.75%0.00%0.75%
Hopkinsville1.95%0.00%1.95%
Hurstbourne0.00%1.25%0.00%
Independence1.25%0.71%1.96%
Jeffersontown1.00%1.25%0.00%
La Grange1.00%0.00%0.00%
Lancaster0.00%1.50%1.00%
Lawrenceburg0.00%0.00%0.00%
Lebanon1.00%1.00%2.00%
Leitchfield1.20%0.50%1.70%
Lexington2.25%2.25%2.75%
London0.00%1.00%1.00%
Louisville2.20%1.25%2.20%
Ludlow1.50%0.71%0.71%
Lyndon0.00%1.25%0.00%
Madisonville1.50%0.50%1.50%
Mayfield2.00%1.00%3.00%
Maysville1.95%0.00%1.95%
Middlesborough2.00%0.00%0.00%
Middletown0.00%1.25%0.00%
Monticello0.00%0.90%0.90%
Morehead1.50%1.00%2.50%
Morganfield0.00%0.50%0.50%
Mount Sterling0.00%1.00%1.00%
Mount Washington1.00%0.00%0.00%
Murray0.00%0.00%0.00%
Newport2.50%1.05%1.40%
Nicholasville1.50%1.00%2.50%
Oak Grove1.50%0.00%1.50%
Owensboro1.39%0.35%1.68%
Paducah2.00%1.00%3.00%
Paintsville1.00%0.50%1.50%
Paris1.50%0.75%2.25%
Pikeville2.00%1.00%2.00%
Prestonsburg1.50%0.00%0.00%
Princeton1.50%1.50%2.50%
Prospect0.00%1.25%0.00%
Radcliff2.00%0.00%2.00%
Richmond2.00%1.00%3.00%
Russell0.88%0.00%0.88%
Russellville2.00%0.75%2.75%
Scottsville1.50%1.00%2.50%
Shelbyville1.50%1.00%2.50%
Shepherdsville1.50%0.00%1.50%
Shively1.50%1.25%0.00%
Somerset0.00%0.00%1.00%
Southgate2.50%1.05%1.05%
St Matthews0.00%1.25%0.00%
Stanford0.65%1.00%1.65%
Taylor Mill2.00%0.71%0.71%
Union0.00%0.80%1.45%
Versailles1.50%1.50%2.50%
Villa Hills1.50%0.71%0.71%
Vine Grove1.00%0.00%1.00%
Walton0.00%0.80%1.45%
West Liberty0.50%0.50%1.00%
Williamsburg0.00%1.00%1.00%
Williamstown0.00%0.00%0.00%
Wilmore2.00%1.00%3.00%
Winchester2.00%1.50%3.50%

Kentucky Sales Tax

Thanks to Kentucky’s system of local occupational taxes, there are no local sales tax rates throughout the state. That means that the state’s sales tax rate of 6% is the same regardless of where you are. Most goods and many services are subject to that rate. Kentucky legislators expanded the sales tax in 2018 to tax services that had not previously been subject to sales tax. Some services for which sales tax is required are admissions (to movies, themes parks, etc.), accommodations lasting less than 30 days, communications services, prepaid calling services, sewage and natural gas utilities, landscaping, janitorial services, many pet care veterinary services, fitness and recreational sports, laundry, bowling and extended warranties. The expanded sales tax applies to services starting on July 1, 2018.

Among the commonly purchased products that are exempt from Kentucky sales tax are most food items (excluding candy, soft drinks and prepared food), prescription drugs and prosthetic devices. Clothing, vehicles and other large purchases are all subject to the full sales tax rate.

Kentucky Property Tax

Property taxes in Kentucky are some of the lowest in the country. On average, homeowners pay just 0.85% effective property tax rates (annual taxes as a percentage of home value). That’s the 18th lowest rate in the country. Depending on where you live, however, that rate could be significantly higher or lower. County rates range between 1.18% (in Campbell County) and 0.55% (in Rockcastle County).

If lower property taxes has you eager to move to Kentucky, check out our mortgage guide to learn all the essentials for getting a mortgage in the Bluegrass State.

Calculate Your Property Taxes: Kentucky Property Tax Calculator

Kentucky Inheritance Tax

Inheritances in Kentucky are taxed based on the recipient’s relationship to the deceased, as well as the value of the property being bequeathed. There are three classes of recipients. Class A includes direct family like spouse, parent, child, grandchild, brother, sister, half-brother or half-sister. Recipients of an inheritance who are in this class are totally exempt from inheritance tax.

Class B recipients are indirect family like nieces, nephews, daughters- and sons-in-law, aunts, uncles and great-grandchildren. This class receives a $1,000 exemption but is otherwise subject to the tax, with rates beginning at 4% for amounts greater than that $1,000 exemption and increasing to a top rate of 16% for the amount of the inheritance above $200,000.

Class C recipients include anyone not in Class A or B, such as cousins. They receive an exemption of $500. After that, rates begin at 6% and increase to a top rate of 16% for the amount of the inheritance over $60,000.

Kentucky Alcohol Tax

Despite its rich history as a producer of the nation’s best bourbon, Kentucky’s alcoholic beverage taxes are among the highest in the nation. Liquor faces an excise tax rate of $1.92 per gallon and all types of alcohol face wholesale tax rates of 11%. When including all excise and sales taxes, beer in Kentucky is taxed at a rate of 84 cents per gallon - nearly 8 cents for each 12 ounce beer. That’s sixth-highest in the country.

Kentucky Cigarette Tax

In 2018, Kentucky legislators raised the cigarette tax by 50 cents, bringing it up to $1.10 per pack of 20. This is still below the national average which is about $1.70 per pack of 20.

Kentucky Capital Gains Tax

Capital gains are taxed as regular income in Kentucky. That means they are subject to the full income tax at a rate of 5%.

Photo credit: flickr
  • Kentucky has the highest per capita rate of both deer and wild turkey of any U.S. state.
  • The Cumberland Gap, in Eastern Kentucky, was the principal passage through the Appalachian Mountains during much of early American history.
  • College basketball is the most popular sport in Kentucky. The University of Kentucky and Louisville University have combined to win 11 national championships.

Places with the Lowest Tax Burden

Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.

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Rank County Income Tax Sales Tax Property Tax Fuel Tax

Methodology

Where you live can have a big impact on both which types of taxes you have to pay each year and how much money you spend on them. SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country and ranked the lowest to highest tax burden.

To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.

In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.

For property taxes, we compared the median property taxes paid in each county.

For fuel taxes, we first distributed statewide vehicle miles traveled down to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.

We then added the dollar amount for income, sales, property and fuel taxes to rank the counties to calculate a total tax burden.

Sources: US Census Bureau 2016 American Community Survey, Government Sources, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration, SmartAsset