How much is Kentucky income tax?
Kentucky income tax at 3 levels of Kentucky taxable income — what is left after Kentucky's own deductions and exemptions. Local income taxes are not included.
| Taxable income | Single | Married filing jointly |
|---|---|---|
| $50,000 | $1,7503.5% effective · 3.5% marginal | $1,7503.5% effective · 3.5% marginal |
| $100,000 | $3,5003.5% effective · 3.5% marginal | $3,5003.5% effective · 3.5% marginal |
| $250,000 | $8,7503.5% effective · 3.5% marginal | $8,7503.5% effective · 3.5% marginal |
What is Kentucky's income tax rate for 2026?
| Taxable income | Rate |
|---|---|
| All taxable income | 3.5% |
Source: KRS 141.020(2)(f) · KY DOR 2026 Form K-4, checked September 11, 2026.
Can you deduct Kentucky income tax on your federal return?
The federal deduction for state and local taxes (SALT) is capped at $40,400 for 2026 — $20,200 if married filing separately — and the cap shrinks toward $10,000 once modified AGI passes $505,000. A single filer with $250,000 of Kentucky taxable income owes about $8,750 in Kentucky income tax — 22% of that cap before any property tax.
SALT cap workaroundsDoes Kentucky have a pass-through entity tax (PTET)?
Yes. A partnership or S corporation can elect to pay Kentucky income tax at the entity level. The business deducts it federally, so that state tax is not limited by the SALT cap, and the owners claim a Kentucky credit or exclusion for it. Deductsy's plan treats March 15 as the Kentucky election or first-payment deadline; it is approximate, so confirm it with Kentucky before relying on it.
PTET savings calculatorWhen are Kentucky estimated tax payments due?
Kentucky estimated tax is due April 15, June 15, September 15 and January 15 of the following year, in 4 equal instalments. Those are the same dates as the federal schedule. Source: Instructions for Filing Estimated Tax Vouchers 2026, Form 740-ES (42A740-S4 (9-25)).
Safe-harbor calculatorWhat is the penalty for underpaying Kentucky estimated tax?
Kentucky charges interest on an underpaid instalment at the rate it publishes each year: 9% for 2026. Paying at least 90% of this year's tax or 100% of last year's (110% if Kentucky AGI was over $150,000) on time avoids it. No estimated payments are required if you expect to owe less than $500. Source: Form 2210-K, Underpayment of Estimated Tax by Individuals, 2025 (42A740-S1 (10-25)).
Are HSA contributions deductible in Kentucky?
Yes. Kentucky follows the federal treatment, so an HSA contribution — up to $4,400 with self-only coverage or $8,750 with family coverage for 2026 — lowers Kentucky taxable income as well as federal.
Does Kentucky give a tax break for 529 plan contributions?
No. Kentucky does not give a state income-tax deduction or credit for 529 contributions.
529 plan tax savings calculatorWhich states have tax reciprocity with Kentucky?
Kentucky has mutual agreements with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia and Wisconsin: neither state taxes the other's residents on wages earned there, so those wages are taxed only where you live. Give your employer the exemption certificate and the state you work in stops withholding.
What is the property tax rate in Kentucky?
Kentucky's average effective property tax rate is 0.75% — the 29th highest of 51 jurisdictions and 83% of the national average of 0.9%. That is about $750 a year for every $100,000 of home value; the rate varies widely by county and school district.
Itemize or take the standard deduction?How much does an LLC cost to keep in Kentucky each year?
Deductsy budgets about $15 a year for a Kentucky LLC — the annual report fee or minimum franchise tax, with a fee due every two years counted at half. Fees change, so confirm with Kentucky's business filing office.
Kentucky S-corp tax calculatorHow do Kentucky taxes compare with neighboring states?
| State | Top income tax rate | Income tax on $100,000 (single) | Property tax (avg) |
|---|---|---|---|
| Kentucky | 3.5% | $3,500 | 0.75% |
| Illinois | 4.95% | $4,950 | 2.01% |
| Indiana | 2.95% | $2,950 | 0.74% |
| Missouri | 4.7% | $4,555 | 0.85% |
| Ohio | 2.75% | $2,366 | 1.31% |
| Tennessee | None | $0 | 0.5% |
| Virginia | 5.75% | $5,493 | 0.73% |
| West Virginia | 4.58% | $3,783 | 0.53% |
On $100,000 of taxable income a single filer's Kentucky income tax is $3,500 — more than in 3 of 7 neighboring states. The lowest is Tennessee at $0; the highest is Virginia at $5,493. Kentucky's average property tax rate is higher than in 4 of 7.
Income tax is each state's own tax on the same state taxable income; local income taxes are not included.
More Kentucky tax notes
- Kentucky's rate steps down when revenue triggers set by statute are met.
Tax moves that matter most for Kentucky
If you own an S corporation, partnership or multi-member LLC, Kentucky's PTET election moves the Kentucky income tax on that profit to the business, where it is deductible federally and outside the SALT cap.
An S-corp election can cut self-employment tax once profit is large enough to pay yourself a reasonable salary and still cover payroll and filing costs. The Kentucky calculator adds Kentucky's own entity fees and taxes to that breakeven.
With 1099 income, a Solo 401(k) can take up to $72,000 a year (2026) — usually more than a SEP-IRA at the same income. Contributions lower both federal and Kentucky income tax.
Run your Kentucky numbers
Open the full optimizer with Kentucky pre-selected to see your specific tax picture.
Open the full calculator