Kentucky

Sales Tax

  • Statewide: 6.0%
  • Counties cannot levy an additional sales tax.
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
  • Gasoline Tax: 44.40 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 47.40 cents/gallon (Includes all state, local, and federal taxes)
  • Cigarette Tax: 1.10 cents/pack of 20

 

Personal Income Tax

  • Personal Income Tax Rate Range: 5.0% 
  • Standard deduction, Single Filing Status: $2,690. Married Filing Jointly: $5,380
  • Personal Exemption Allowance: N/A
  • Itemized Deductions Allowed?: Yes, subject to limitations
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Taxable at ordinary income tax rates*
  • Military Pay
    • Active Duty Pay: Exempt.
    • Military Retirement Pay: Taxable at ordinary income tax rates*
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Taxable at ordinary income tax rates*
Income Tax Comments: *Retirement pay is exempt if taxpayer retired in 1997 or before. After 1997, $31,110 of retirement and annuity is exempt. Additional exclusions may be available. State allows county- and city-level income tax.  

 

Property Tax

  • Local municipalities average .86% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value; inspected no less than every four years
  • Relief programs for:
    • 65 and over or Disabled: $40,500 of assessed value may be exempt
    • Disabled Veterans: May be eligible for 100% tax credit
  • Personal Property Tax: Yes. Rates and exemptions vary.

 

Inheritance & Estate Taxes: There is an inheritance tax of up to 16%, but most family members are exempt. There is no estate tax.

 

Department of Revenue website: www.revenue.ky.gov

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