Menu burger Close thin Facebook Twitter Google plus Linked in Reddit Email arrow-right-sm arrow-right
Loading
Tap on the profile icon to edit
your financial details.

Kentucky Income Tax Calculator

Your Details Done

Overview of Kentucky Taxes

Kentucky has a flat income tax of 5%. That rate ranks slightly below the national average. At the same time, cities and counties may impose their own occupational taxes directly on wages, bringing the total tax rates in some areas to up to 7.50%. Both sales and property taxes are below the national average.

Enter your financial details to calculate your taxes
Household Income
Dismiss
Location
Dismiss
Filing Status
401(k) Contribution
Dismiss
IRA Contribution
Dismiss
Itemized Deductions
Dismiss
Number of State Personal Exemptions
Dismiss

Your Income Taxes Breakdown

Tax Type Marginal 
Tax Rate
Effective 
Tax Rate
2021 
Taxes*
Federal
FICA
State
Local
Total Income Taxes
Income After Taxes
Retirement Contributions
Take-Home Pay

* These are the taxes owed for the 2021 - 2022 filing season.

Your 2021 Federal Income Tax Comparison

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

Total Estimated 2021 Tax Burden

Income Tax $
Sales Tax $
Fuel Tax $
Property Tax$
Total Estimated Tax Burden $
Percent of income to taxes = %
$
  • About This Answer

    Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2020 - 2021 filing season based on the Trump Tax Plan.

    How Income Taxes Are Calculated

    • First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
    • Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
    • Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
    • Your location will determine whether you owe local and / or state taxes.
    ...read more
  • Last Updated: January 1, 2021

    When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.

    Customer Service - If you would like to leave any feedback, feel free to email info@smartasset.com.

    ...read more
  • Our Expert

    ...read more
Find a Savings or CD account that works for you

Taxes can really put a dent in your paycheck. But with a Savings or CD account, you can let your money work for you. Check out these deals below:

Unfortunately, we are currently unable to find savings account that fit your criteria. Please change your search criteria and try again.
Searching for accounts...
Ad Disclosure
Unfortunately, we are currently unable to find savings account that fit your criteria. Please change your search criteria and try again.
Searching for accounts...
Ad Disclosure
Share Your Feedback
How would you rate your experience using SmartAsset’s financial advisor matching service so far?
What is the most important reason for that score? (optional)
Please limit your response to 150 characters or less.
Thank you for your answer! Your feedback is very important to us.

Taxes in Kentucky

Kentucky State Tax Quick Facts

  • State income tax: 5.00%
  • Local income taxes: 0.00075% - 2.50%
  • Sales tax: 6.00%
  • Property tax: 0.83% average effective rate
  • Gas tax: 24.6 cents per gallon of regular gasoline, 21.6 cents per gallon of diesel

Kentucky has a flat income tax rate of 5%, a statewide sales tax of 6% and property taxes that average $1,257 annually. Both the sales and property taxes are below the national averages, while the state income tax is right around the U.S. mark.

There are two unique aspects of Kentucky’s tax system. The first is local occupational taxes, which are collected by both counties and cities and are levied on both individuals' wages and businesses' earnings. These rates range from 0.00075% up to 2.50%. The second is the state's inheritance tax. Kentucky is one of just a handful of states to impose a tax on inheritances.

A financial advisor in Kentucky can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.

Kentucky Income Taxes

Kentucky imposes a flat income tax. This differs from the federal income tax, which has a progressive tax system (higher rates for higher income levels). The state income tax rate is 5% regardless of income. Prior to 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.

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 (up to $210 for one child and $420 for two or more children); 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 earnings of businesses also have these taxies levied on them.

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.

Kentucky Local Income Tax Rates

City/CountyTaxes
Adairville1.5%
Alexandria 0.075%
Ashland2%
Auburn0.0033%
Augusta1.25%
Bardstown1%
Beattyville1%
Bellevue$60 - $6,325
Berea2%
Boone County Fiscal Court0.8%
Boone County Mental Health0.15%
Boone County School Board0.5%
Bourbon County0.0075%
Bowling Green1.85%
Boyd County1%
Boyle County1.25%
Bromley0.00125
Brooksville0.0075% - 1.75%
Brownsville1%
Cadiz1%
Calvert City0.5%
Camargo2%
Campbell County1.05%
Campbellsville 1%
Carroll County1%
Catlettsburg1.5%
Cave City1%
Clarkson1.2%
Clinton0.5%
Clinton County1.25%
Coal Run Village1%
Cold Spring$25 - $1,500
Corbin1%
Covington 2.5%
Crescent Springs0.00075%
Crestview Hills0.0075%
Crittenden County0.5%
Cumberland County Fiscal Court1.75%
Cynthiana1.5%
Danville1.25%
Daviess County Fiscal Court0.35%
Dawson Springs0.5% - 1.5%
Edgewood0.0075%
Elizabethtown1.35%
Elkton0.125%
Elsmere0.01%
Eminence 0.0075%
Erlanger0.00075%
Fayette County Public School District0.5%
Florence0.001%
Fort Mitchell0.00075%
Fort Thomas1.25%
Fort Wright0.00075%
Frankfort1.95%
Franklin County1%
Gallatin County Fiscal Court1%
Gamaliel1%
Garrard County2%
Georgetown 1%
Glasgow1.5%
Greensburg1%
Hancock County1.25%
Harrison County1.5%
Harrodsburg1%
Hart County0.8%
Hartford1%
Hazard0.5% - 1.25%
Henderson County1%
Hickman1.5%
Highland Heights 0.35%
Hillview1.8%
Hodgenville1%
Hopkinsville1.5%
Independence0.00075%
Jessamine County1%
Johnson County Fiscal Court0.5%
Kenton County0.001097% - 0.7097%
Knox County 1%
La Grange1%
Lakeside Park0.0075%
Laurel County1%
Lebanon1%
Leitchfield1.2%
Lewisburg0.10%
Lexington-Fayette Urban County Government2.25%
Lincoln County1%
Livingston County1%
Logan County0.75%
Louisville Metro1.45% - 2.2%
Ludlow0.00075%
Madison County1%
Madisonville1.5%
Marion 0.75%
Marion County1%
Marshall County1%
Marshall County Occupational License Tax For Schools0.5%
Mayfield0.5% - 2%
Maysville0.075%
McCreary County1.5%
McKee1%
McLean County1%
Melbourne$50
Mercer County0.45%
Middlesboro2%
Midway2%
Millersburg1%
Montgomery County1%
Morehead1.5%
Morgantown2%
Mt. Vernon1%
Muldraugh0.0025%
Nelson County Fiscal Court0.5%
Newport0.0035%
Nicholasville1%
Nortonville1%
Oak Grove0.06% - 0.38%
Ohio County1%
Owensboro1.78%
Owenton1%
Paintsville1.25%
Paris1.5%
Park City0.01%
Park Hills0.0035%
Perry County1%
Perryville1%
Pike County1%
Pineville1.5%
Powell County1%
Prestonsburg1.5%
Princeton1.5
Raceland1.5%
Radcliff2%
Richmond2%
Rockcastle County Fiscal Court1.5%
Rowan County1.5%
Russell1.15%
Russell County0.75%
Ryland Heights0.01%
Scott County1%
Scott County Public School District0.5%
Scottsville1.5%
Shelby County1%
Shelbyville1%
Shively1.5%
Simpsonville0.5%
Somerset0.6%
Southgate$35 - $5,500
Spencer0.80%
Springfield1%
Stanford0.65%
Taylor County1%
Taylor Mill0.02%
Tompkinsville1.5
Union County Fiscal Court0.50%
Vanceburg1%
Versailles1.5%
Villa Hills0.00075%
Vine Grove2%
Warren County1%
Warren County Public Schools0.5%
Warsaw1%
Washington County0.75%
West Liberty0.05%
West Point1%
Whitley County1%
Winchester2%
Woodford1.5%
Woodlawn$50
Radcliff2.00%
Richmond2.00%
Robertson County1.50%
Rockcastle County1.50%
Rowan County1.00%
Russell0.88%
Russell County0.25%
Russell Springs1.00%
Russellville2.00%
Saylersville1.00%
Scott County1.50%
Scottsville1.50%
Shelby County1.00%
Shelbyville1.50%
Shepherdsville1.00%
Shively1.50%
Silver Grove1.50%
Simpson County0.75%
Southgate2.50%
Spencer County0.01%
Springfield1.00%
St. Matthews0.75%
Stanford0.65%
Stanton1.00%
Taylor County1.00%
Taylor Mill2.00%
Taylorsville0.75%
Todd County1.00%
Tompkinsville1.00%
Union County0.50%
Vanceburg1.00%
Versailles1.00%
Villa Hills0.08%
Vine Grove1.00%
Warren County1.50%
Warsaw1.00%
Washington County0.75%
Wayne County0.90%
West Buechel1.00%
West Liberty0.50%
West Point2.00%
Whitley County1.00%
Wilder2.25%
Wilmore2.00%
Winchester1.50%
Wolfe County1.25%
Woodford County1.50%

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 only sales tax you’ll pay in Kentucky, regardless of what city you’re shopping in. 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.

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 a 0.83% effective property tax rate (annual taxes as a percentage of home value). Depending on where you live, however, that rate could be significantly higher or lower. County rates range between 1.17% in Campbell County and 0.51% in Carter County.

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

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 spouses, parents, children, grandchildren, brothers, sisters and half siblings. 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 the $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 or institutions. 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

Kentucky has a rich history as a producer of the nation’s best bourbon. Liquor faces an excise tax rate of $1.92 per gallon. Beer in Kentucky is taxed at a rate of 8 cents per gallon, while wine has a tax rate of 50 cents per gallon.

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.

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.