Kentucky variant. This is a Kentucky-specific version of the Income Tax Calculator, using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Income Tax Calculator.
Kentucky income tax (Flat 4.0% (decreasing toward 3.5%)) stacks on top of federal tax. Understanding both layers is essential to estimating your total Kentucky tax bill.
Kentucky state income tax structure
Kentucky taxes income at Flat 4.0% (decreasing toward 3.5%), with a top marginal rate of 4%. Like the federal system, only income within each bracket is taxed at that bracket's rate.
Federal brackets (10%–37%) apply nationwide. Combine your federal effective rate with the Kentucky rate to find your true marginal tax on the next dollar earned.
About taxes and housing in Kentucky
Kentucky applies a flat individual income tax that the state has been gradually lowering.
Kentucky has below-average property taxes and some of the more affordable home prices in the country.
Kentucky's economy features bourbon distilling, horse breeding, automotive manufacturing, and coal in its eastern regions.
Worked example: state tax on $60,183
Using the 4% top rate as a ceiling, state income tax on $60,183 is at most about $2,407; the actual figure is lower after brackets and deductions.
Quick reference
- State income tax: Flat 4.0% (decreasing toward 3.5%)
- State sales tax: 6% (plus 0.00% avg local)
- Median home value: $200,000
- Median household income: $60,183
- Effective property tax rate: 0.83%
- Avg auto insurance: $1,859/yr
Frequently Asked Questions
Does Kentucky have state income tax?
Yes - Flat 4.0% (decreasing toward 3.5%), topping out at 4%.
What is the top tax rate in Kentucky?
The top marginal state rate is 4%.