Kentucky state taxes

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Kentucky

By Bankrate.com

Kentucky collects taxes on six income brackets at rates ranging from 2 percent to 6 percent. All income earned by Kentucky residents as well as income earned by nonresidents from Kentucky sources is subject to the state tax. More on Kentucky taxes can be found in the tabbed pages below.

Income

Sales

Property

Estate

Other

Personal income tax
	Kentucky collects income taxes from its residents at the following rates: -- 2 percent on the first $3,000 of taxable income -- 3 percent on taxable income between $3,001 and $4,000 -- 4 percent on taxable income between $4,001 and $5,000 -- 5 percent on taxable income between $5,001 and $8,000 -- 5.8 percent on taxable income between $8,001 and $75,000 -- 6 percent on taxable income of $75,001 and above.
	Kentucky tax returns are due on April 15, or the next business day if that date falls on a weekend or holiday.
	The state's maximum pension income exclusion remains at $41,110 for 2008 returns (unchanged from 2007) for filers who are retired from the federal, state or local government or who receive supplemental U.S. Railroad Retirement Board benefits. Under a law enacted last year, the exclusion amount is no longer adjusted annually for inflation.
	In 2005, Kentucky's family size tax credit replaced the state's low-income tax credit. Eligibility thresholds have been adjusted for the 2008 tax year: $10,400 for a family of one, $14,000 for a family of two, $17,600 for a family of three and $21,200 for a family of four or more.

Sales tax
	The sales tax rate in Kentucky is 6 percent.
	A 6 percent use tax may be due if you make out-of-state purchases for storage, use or other consumption in Kentucky.

Personal and real property taxes
	Property tax is levied on the fair cash value of all real and personal property unless a specific exemption exists in the Kentucky Constitution or in the case of personal property, has been granted by the General Assembly.
	Details on the various property tax classifications and rates can be found in the 2007 Property Tax Rates publication, the latest compilation of this data.
	Kentucky's Department of Revenue offers local property tax information at its Web site .
	Kentucky offers taxpayers a homestead exemption to homeowners who are 65 years of age or older or classified as totally disabled. Any qualified person wishing to apply for a homestead exemption should contact the Property Valuation Administrator of his or her county and file Form 62A350 for the homestead exemption.

Inheritance and estate taxes
	Kentucky collects an inheritance tax.
	Its estate tax is limited and related to federal estate tax collection. Since the state tax credit has been phased out at the federal level, Kentucky does not impose an estate tax.

Other Kentucky tax facts
	A motor vehicle usage tax of 6 percent is collected on every motor vehicle used in Kentucky. The tax is collected by the county clerk or other officer with whom the vehicle is required to be registered at the time of transfer of ownership or when a vehicle is offered for registration for the first time in Kentucky. License tags will not be issued until the tax is paid.
	Fiduciaries must pay income tax on the portion of income from an estate or trust not distributed or distributable to beneficiaries. The tax is calculated using a graduated rate of 2 percent to 6 percent.
	Kentucky excludes all income from all sources for active duty and reserve members of any U.S. military branch or the National Guard who are killed in the line of duty.