Kentucky state taxes 2021: Income and sales tax rates
Kentucky residents and businesses must pay state taxes and file tax returns. The state employs a flat income tax rate of 5 percent. Everyone pays the same tax rate provided you meet the income requirements to file.
Kentucky personal income tax rates: Table
Kentucky uses a flat income tax rate for single and married filers.
| Kentucky personal income tax rates | ||
|---|---|---|
| Tax rate | Single | Married, filing jointly |
| 5% | Greater than $0 | Greater than $0 |
| Source: Kentucky Department of Revenue | ||
When you file your Kentucky income tax return, you can claim a standard deduction or itemize deductions. Single filers can receive a standard deduction of $2,690 and married households filing together can claim a $5,380 deduction. The state does not offer personal exemptions.
Who has to file Kentucky state taxes?
If you lived in Kentucky or worked for a company based in the state, you might have to file a tax return if you exceed the modified gross income thresholds.
| Family size | Modified gross income |
| 1 | More than $12,760 |
| 2 | More than $17,240 |
| 3 | More than $21,720 |
| 4 | More than $26,200 |
| Source: Kentucky Department of Revenue | |
Partial-year residents must also file a tax return. You can use form 740-NP to report all income you’ve made since moving to the Bluegrass State, or if you’ve earned income in the state as a nonresident.
Companies will also need to file a tax return. The top corporate tax rate is 5 percent. Businesses and individuals can file returns on the Kentucky Department of Revenue website.
Kentucky sales tax rate: Table
| Kentucky sales tax rate | ||||
|---|---|---|---|---|
| Sales tax rate | National rank | |||
| 6% | 17 | |||
| Source: Tax Foundation | ||||
Kentucky’s sales tax rate consists only of the state tax. There are no local taxes added.
Other things to know about Kentucky state taxes
The state mandates taxes on specific items like gasoline and cigarettes. The gasoline tax is 26 cents per gallon, and the cigarette tax is $1.10 per 20-pack.
Furthermore, Kentucky offers many tax credits for education, angel investing, child or dependent care, taxes paid to other states and more. The Kentucky Department of Revenue website contains all the information you need on filing eligibility and credits. Individuals and businesses can also set up an online account to file taxes, pay balances owed and claim refunds.
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