Income Tax for Kentucky (2026)

How This Calculator Works in Kentucky

This calculator applies Kentucky's 2026 tax brackets and rates to estimate your state income tax liability. Enter your income and filing status to see your marginal rate, effective rate, and estimated tax owed.

Kentucky Overview

Kentucky levies a flat income tax of 4%, recently reduced from 5% under tax reform legislation that includes triggers for further rate reductions. The state's eventual goal is to potentially eliminate the income tax if revenue targets are met. Local occupational taxes in Louisville (2.2%) and Lexington (2.25%) add to the burden, and Kentucky maintains reciprocity agreements with seven neighboring states.

How Kentucky Compares

Kentucky's top income tax rate of 4% compares to Tennessee at 0% and Virginia at 5.75%. The rate differences can meaningfully impact take-home pay for workers near state borders.

Kentucky's income tax rate of 4% compares to a national average of approximately 5.04%. This is below the national average.

Tips for Kentucky Residents

• 1Kentucky has a flat income tax rate of 4%, reduced from 5% as part of HB 8 tax reform passed in 2022.
• 2Local occupational taxes in Louisville (2.2%) and Lexington (2.25%) add significantly to the income tax burden for workers in Kentucky's two largest cities.
• 3Kentucky does not tax Social Security benefits, and allows a $31,110 pension income exclusion for qualifying retirement income.
• 4The state's tax reform included triggers that could reduce the rate further — potentially to 0% — if revenue benchmarks are met.
• 5Kentucky has a reciprocal tax agreement with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, and Wisconsin.

Frequently Asked Questions