Results are estimates for educational purposes only. Based on 2026 IRS federal brackets and Kentucky state tax rates. Always consult a qualified tax professional.
Kentucky income tax overview
Kentucky transitioned to a flat income tax of 4% in 2023, down from a previous progressive system with rates up to 5%. Kentucky's tax reform legislation included plans to continue reducing the flat rate toward 3.5% as long as revenue thresholds are met. Kentucky also allows a $2,770 personal credit per filer. Several Kentucky cities levy local occupational taxes — Louisville charges 2.2% and Lexington 2.25% — making the total tax burden considerably higher for residents of those cities. Kentucky's economy has diversified from coal into automotive manufacturing, healthcare, and logistics.
2026 Kentucky income tax rates
Tax rate
Income range (single filer)
4% flat
All taxable income — 2026
Worked example: $75,000 salary in Kentucky
A $75,000 salary in Kentucky results in approximately $3,000 in state income tax (4% flat), plus $12,580 federal tax, $4,650 Social Security, and $1,088 Medicare. Louisville residents add approximately $1,650 city tax. Base take-home approximately $54,682.
Key facts: 4% flat rate · Declining toward 3.5% · Louisville adds 2.2% and Lexington 2.25% local tax
Frequently asked questions — Kentucky income tax
Yes. Kentucky's flat rate dropped from 5% to 4.5% to 4% in recent years and is scheduled to continue declining to 3.5% when revenue conditions allow.
Louisville-Jefferson County levies a 2.2% occupational tax on wages earned within the county. Lexington-Fayette County charges 2.25%. Many smaller Kentucky cities also have occupational taxes ranging from 0.5% to 2%.
No. Kentucky does not tax Social Security benefits.
Kentucky exempts the first $31,110 of pension income for taxpayers aged 65 and older. This includes most public and private pensions, 401k distributions, and IRA withdrawals up to that threshold.
Kentucky provides a $2,770 personal tax credit per filer (not a deduction but a direct credit against tax owed), which reduces the effective tax burden for most residents.