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Kentucky Income Tax Guide

Flat 3.5% rate for 2026Kentucky's official 2026 withholding formula applies 3.5% to taxable income.
$3,360 standard deductionKentucky DOR increased the individual deduction by $90 for 2026.
Local occupational taxes varyUse the optional local-rate field when a city or county wage tax applies.
Official SourcesKY 2026 deductionKY 2026 formulaKY individual taxIRS
KY 2026 deductionKY 2026 formulaKY individual taxIRS
Calculate for Kentucky

How Kentucky taxes work

Kentucky income is simplifiedThe estimate uses supported household income after common pre-tax contributions and state adjustments.
The 2026 deduction is includedA $3,360 Kentucky standard deduction is subtracted once for every supported filing status.
The 3.5% rate is appliedThe official 2026 percentage is applied to the remaining simplified Kentucky taxable income.
Occupational tax is manualCity and county wage-tax bases and rates differ, so enter a known applicable percentage in the local-rate field.
Credits and special deductions are excludedKentucky family-size, business, pension, and other provisions require return-specific facts.

Common Kentucky tax questions

What is Kentucky's 2026 rate?Kentucky's official 2026 withholding materials specify a 3.5% flat individual rate.
Did the standard deduction change?Yes. Kentucky DOR announced a $3,360 deduction for 2026.
Are local occupational taxes automatic?No. Use the local-rate input only with a verified applicable city or county percentage.
Is Kentucky's pension exclusion included?No. Age and income-type eligibility require information not collected here.
Are nonresident rules modeled?No. Work-location sourcing and reciprocity require a separate review.
Is this Form 740?No. It is a planning estimate and not a complete Kentucky return.