Kentucky State Income Tax

For 2024, Kentucky imposes a flat income tax rate of 4.5% on taxable income, regardless of income level or filing status.

• Flat Tax Rate: 4.5% on all taxable income.
• Standard Deduction: $2,990 for all filing statuses in 2024.
• No Personal Exemptions: Kentucky eliminated personal exemptions as part of their tax reform.

Kentucky Tax Credits

Kentucky offers several tax credits that may reduce your tax liability (not all included in this calculator):

• Family Size Tax Credit: Available to low-income families based on the federal poverty level.
• Child and Dependent Care Credit: Equal to 20% of the federal credit.
• Education Tuition Tax Credit: For undergraduate studies at eligible Kentucky institutions.

Local Taxes in Kentucky

Many Kentucky localities impose their own income taxes, typically in the form of occupational license fees or taxes:

• Local Income Taxes: Many cities and counties in Kentucky impose local income taxes, typically ranging from 1% to 2.5% of wages.
• Louisville Metro: The largest city has a 2.2% occupational tax.
• Lexington: Has a 2.25% occupational license fee.

Note: This calculator provides an estimate of state-level taxes only. Local taxes would need to be calculated separately based on your specific location.

Federal Income Tax

Your federal income tax is calculated based on federal tax brackets, your filing status, deductions (standard or itemized), and allowances claimed on your W-4 form. Pre-tax deductions like 401(k) or HSA contributions reduce your federal taxable income.

FICA Taxes (Social Security & Medicare)

FICA taxes fund Social Security and Medicare. These are typically withheld by employers.

• Social Security: 6.2% on income up to the annual limit ($168,600 for 2024).
• Medicare: 1.45% on all income. An additional 0.9% Medicare tax applies to income above certain thresholds ($200,000 for Single, $250,000 for MFJ).

Other Kentucky Taxes (Not Calculated Here)

While this calculator focuses on income taxes, be aware of other taxes in Kentucky:

• Sales Tax: Kentucky has a state sales tax rate of 6% with no additional local sales taxes.
• Property Tax: Kentucky's property taxes are relatively low compared to the national average, with rates set at both state and local levels.
• No Inheritance Tax: Kentucky previously had an inheritance tax, but estates of decedents who died after January 1, 2023, are now exempt.

Disclaimer: This information is for general guidance for the 2024 tax year and is not tax advice. Consult a tax professional for personalized advice.