Kentucky State Income Tax: Rates, Deadlines, and Filing Requirements

Kentucky taxes income at a flat rate, meaning every resident pays the same percentage regardless of how much they earn.

If you earned income while living in or working in Kentucky, here is what you should know.

What Is Kentucky's State Income Tax Rate?

Kentucky uses a flat income tax rate, meaning all residents pay the same percentage on their taxable income regardless of income level. The rate for tax year 2025 is 4.0%.

Kentucky's flat rate has been declining annually under a trigger mechanism established by House Bill 8 (2022). Each year the trigger conditions are met, the rate drops by 0.5%. The rate for tax year 2026 is 3.5%, resulting in an estimated $718 million in savings for taxpayers.

Who Needs to File a Kentucky State Tax Return?

Kentucky requires residents and workers to file taxes in the commonwealth under certain circumstances. In essence, some people must file, while others are exempt from filing. Individuals who are exempt from filing a state tax return are those whose incomes fall below the amount stipulated by the commonwealth.

For example, a person with a modified gross income of $15,650 or less does not have to file a return. A person whose household size is two and earns $21,150 a year or less is likewise exempt. A household of three can earn up to $26,650, while a household of four or more can earn $32,150 or less and avoid having to file a tax return.

A married couple who are both over the age of 65 and have an adjusted gross income, or AGI, of $5,270 or less per year does not have to file. If only one spouse is 65 or older, the couple can have an AGI of $4,270 or less per year. If both people are younger than 65, they can earn $3,270 for an AGI and avoid filing. A single person younger than 65 can have an AGI of $3,270 per year and not be required to file a state tax return. A single person age 65 or over, or blind, can have an AGI of $4,270.

Note that even if the filing requirements are not met, an income tax return must be filed to claim a refund of any Kentucky taxes withheld.

Self-Employed Must File State Taxes

All commonwealth residents who are self-employed must file state income tax returns regardless of how much they earn. However, people who live or work in the state can complete Form K-4E with their employers if they believe they will earn less than the income required to pay taxes.

How Does Kentucky Tax Retirement Income?

Kentucky does not tax Social Security benefits; they are fully exempt from state income tax.

For other retirement income, Kentucky allows a pension income exclusion of up to $31,110 per year for qualifying retirement benefits. This exclusion applies to pension income, annuities and certain retirement distributions.

How to Pay Kentucky State Taxes Owed

Full-year residents use Form 740. Nonresidents who earned income from sources in Kentucky may also be required to file. Part-year residents and nonresidents use Form 740-NP. Free electronic filing is also available on the Kentucky Department of Revenue website through KY File.

Individuals who must pay taxes and owe the state a balance are required to fill out Form 740-V and send it, along with a paper check with their Social Security number and tax year written on it, to the Commonwealth's Department of Revenue. You can also pay your balance online on the Kentucky Department of Revenue website.

If you expect to have an income of more than $5,000 annually, and no income tax is being withheld, you may be required to make quarterly payments to prepay part of your income tax liability. Use Form 740-ES to calculate and submit your estimated payments.

Kentucky Tax Deadlines and Extensions

Kentucky's filing deadline is April 15 for most filers, the same as the federal deadline. If you owe Kentucky taxes, you must pay the balance due by April 15, even if you file by the extension deadline.

If a taxpayer is filing for an extension of time to pay federal income taxes, they are not required to file for a separate extension as long as they attach a federal Form for an Automatic Extension and/or Form 2688 (approved extension) to their Kentucky return.

Kentucky Tax Penalties for Late Filing and Non-Payment

If you file your Kentucky return after April 15 without having paid the balance due, you will be charged a penalty of 2% of the unpaid tax per month, up to a maximum of 20% of the total tax due. Interest also accrues separately on any unpaid balance at 9% for the 2026 calendar year.

Amended Returns and Year Refunds

Taxpayers in the commonwealth can also amend their filings during the year by filing a revised tax return for the appropriate tax year. The state processes those returns within four to six months. If you received a refund from the state the previous year, you will receive a Form 1099G prior to filing taxes for the current year. The form reminds taxpayers of the amount and whether it was applied to an outstanding debt.

If you are seeking to track your Kentucky state tax refund for the current year, you can check the status at the Kentucky Department of Revenue's refund status portal.

How to File Kentucky State Taxes With E-file.com

E-file.com lets you file your Kentucky state return at the same time as your federal return. The software automatically guides you through Kentucky-specific exemptions and deductions, including retirement income exclusions. E-file.com is an authorized IRS e-file provider, so your returns are transmitted electronically and securely.

File your Kentucky state return with E-file.com.

Frequently Asked Questions

What is Kentucky's income tax rate?

Kentucky uses a flat income tax rate of 4.0% for tax year 2025, meaning all residents pay the same percentage on their taxable income regardless of income level. The rate for tax year 2026 is 3.5%.

Are Social Security benefits taxed in Kentucky?

No. Kentucky fully exempts Social Security benefits from state income tax. If Social Security income was included in your federal adjusted gross income, it is subtracted when calculating your Kentucky taxable income.

Do I have to file a Kentucky tax return if I'm self-employed?

Yes. All Kentucky residents who are self-employed must file a state return regardless of how much they earn. This applies even if your income falls below the standard modified gross income filing thresholds that apply to other filers.

How to Check Your Kentucky State Tax Refund

You can check the status of your Kentucky state tax refund for the current year at the Kentucky Department of Revenue refund status portal. You can also call (502) 564-4581 to speak to an examiner for information on any additional refund issued. Refunds for E-filed returns take 4-6 weeks, and paper returns take 10-14 weeks.

How does Kentucky tax retirement income?

Kentucky does not tax Social Security benefits. For other retirement income, including pensions, annuities, and certain retirement distributions, Kentucky allows an exclusion of up to $31,110 per year. This exclusion is claimed on Schedule P of Form 740.

Note: States & U.S. territories may make changes to their tax laws with little notice. We do our best to keep this information up-to-date, but it is provided on an "AS IS" basis. For more see our terms.