Kentucky Income Tax Calculator 2026
See your Kentucky state tax, effective rate, and take-home pay in 60 seconds.
- This state uses a simplified estimate: a single rate schedule applied to gross income less the standard deduction and personal exemption. Local income taxes, mandatory state payroll contributions, retirement income exclusions, credits, and state-specific adjustments are not modeled.
Estimated federal and state take-home pay based on the information entered. Local taxes, state payroll programs, employer benefits, itemized deductions, tax credits, and special state adjustments may not be included. Tax year 2026. Kentucky figures last verified July 17, 2026 — see sources below.
Worked example: A single filer earning $85,000 in Kentucky
Start with $85,000 of wages. After $3,360 in modeled state deductions/exemptions, Kentucky applies its flat 3.5% rate, which comes to about $2,857 in state income tax — an effective state rate near 3.4%. Federal income tax and FICA are calculated separately and shown in the calculator above.
Assumes a single filer taking the standard treatment. Figures are educational estimates.
How Kentucky taxes income
Kentucky is a flat-tax state: all taxable income is taxed at the same 3.5% rate, regardless of how much you earn. There are no brackets to climb.
Kentucky generally starts from your federal income, applies state-specific adjustments, and then applies the flat 3.5% rate. Deductions, exemptions, and credits can change the final number — confirm the current details with the Kentucky Department of Revenue.
2026 rate structure
Retirement income & Social Security
Kentucky retirement income treatment varies by plan type, your age, and whether the distribution is qualifying. Many states exempt some or all 401(k), IRA and pension income for retirees, and this calculator does not model those exclusions. Check the Kentucky Department of Revenue for the rules that apply to you before assuming distributions are taxable.
Local taxes & reciprocity
Many Kentucky cities and counties impose local occupational/payroll taxes on wages earned within their boundaries.
Reciprocity: Kentucky has reciprocity agreements with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin. If you live in Kentucky and work in one of those states, you pay Kentucky tax on those wages and file only in Kentucky.
Notable deductions, credits & other taxes
Deductions & credits
- Kentucky standard deduction (about $3,360 single / $3,360 MFJ in this model — verify current amounts)
- Credit for income taxes paid to other states (for residents with out-of-state income)
- State versions of common credits — earned income, child/dependent care, and education credits — where offered
Capital gains: Kentucky has no separate capital gains rate. Capital gains included in your federal AGI are taxed as ordinary income at the flat 3.5% rate.
Property tax: Property taxes in Kentucky are assessed and collected locally, so effective rates vary widely by county and municipality. Check your county assessor or the Kentucky Department of Revenue for local rates.
Kentucky vs. neighboring states
Compared with its neighbors — Illinois, Indiana, Missouri, Ohio — Kentucky's flat 3.5% sit within the regional range. Effective rates depend heavily on income level, deductions, and local taxes. Note that Tennessee has no income tax at all, which can matter for people living or working near the border.
Kentucky state tax FAQs
What is the Kentucky state income tax rate for 2026?
Kentucky levies a flat 3.5% income tax that applies to all taxable income, with no graduated brackets.
Does Kentucky tax retirement income or Social Security?
Social Security benefits are exempt from Kentucky income tax. Treatment of other retirement income depends on the plan type, your age, and whether the distribution is qualifying — many states exempt some or all of it for retirees. This calculator does not model those exclusions, so verify with the Kentucky Department of Revenue rather than assuming your distributions are fully taxable.
How are capital gains taxed in Kentucky?
Kentucky has no separate capital gains rate. Capital gains included in your federal AGI are taxed as ordinary income at the flat 3.5% rate.
Is there a local or city income tax in Kentucky?
Many Kentucky cities and counties impose local occupational/payroll taxes on wages earned within their boundaries.
Does Kentucky have tax reciprocity with neighboring states?
Kentucky has reciprocity agreements with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin. If you live in Kentucky and work in one of those states, you pay Kentucky tax on those wages and file only in Kentucky. For non-reciprocal states, you generally file a non-resident return there and claim a credit at home.
Sources & verification
Last verified July 17, 2026.