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Kentucky Tax

FULL List to Kentucky Tax Forms

Individual Income Tax Forms

Form 740 Kentucky Individual Income Tax Return Resident

Form 740-EZ Kentucky Individual Income Tax Return

Form 740-NP Kentucky Individual Income Tax Return Nonresident

Form 740-NP-R Kentucky Income Tax Return Nonresident Reciprocal State

Corporate Income Tax Forms

Form 720 Kentucky Corporation Income Tax

Form 720S Kentucky S Corporation Income Tax

Sales Tax Forms

Exemption Form

Form 51A209 Sales and Use Tax Refund Application

Form 51A113O Consumer’s Use Tax Return

Property Tax Forms

Form 62A500 Tangible Personal Property Tax Return

Form 62A023 Application for Exemption from Property Taxation

There are a number of taxes applicable to the state of Kentucky, which includes sales tax and six income brackets for personal income taxation.  Tax returns are due on April 15.

Kentucky state sales tax – 6%, (food, prescription drugs, utilities and medical supplies exempt)

Kentucky state personal income tax 

Six income brackets for single filings

2% – first $3,000 of taxable income

3% – $3,000 – $4,000

4% – $4,000 – $5,000

5% – $5,000 – $8000

5.8% – $8,000 – $75,000

6% – $75,000+

Kentucky state excise taxes

Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes.

$.60 per package of 20 cigarettes, $.19 per unit of snuff

15% taxation on other tobacco products

$1.92 tax per gallon of liquor, no less than 12 cents on half pint retail containers

$2.50 per 31 gallon barrel of beer

$.50 per gallon of wine

Motor vehicle usage tax – 6% of selling price

$.21 a gallon on gasoline , $.18 on diesel

Kentucky State marijuana/drug taxes

$1,000 for each marijuana plant, $3.50 per gram of processed marijuana

$200 for each gram of cocaine

Tax payments of this nature are made anonymously and signified by adding a tax stamp to the product.  This is a legally questionable tax due to the implications for self-incrimination for all that buy these stamps.

Kentucky inheritance tax 

Kentucky would only impose an estate tax if the federal estate tax were phased out.

Kentucky payroll taxes

State Disability Insurance – none

State Unemployment Insurance – 1% to 10%, wage base is $8,000.  Employer contribution is 10% for new construction employers, 2.7% for all others.

Kentucky state property tax

Property must be assessed by Jan 1, annually and listed by March 15.  The Kentucky State property tax is 13.6 cents per $100 of assessed value.  This tax goes directly into the state’s general fund.

Exemptions

Pension income exclusion stands at $41,110 for government pensions and US Railroad Retirement Board benefits.  Not adjusted for inflation.

Low income tax credit – $10,830 for single person, $14,570 family of two, up to $22,050 for a family of four.

Qualified persons may be exempt for property under $34k under the homestead exemption.  This generally applies to seniors over the age of 65, individuals that are totally disabled and disabled members and veterans of the armed forces.  All others under 65 must file applications annually.

Corporate income tax

4 percent of the first $50,000 of taxable income, 5 percent of the next $50,000 of taxable income, 6 percent of the taxable income over $100,000.

Misc

Social Security, railroad retirement are not taxed under Kentucky law.

Medical expenses that exceed 7.5% of income can be deducted.

Military personnel receiving their only income from the military pay will be exempt from taxes in Kentucky.  They will not need to file tax returns.

Kentucky income tax filing is required of all residents as well as of residents whose income is attained from the state as well. The state’s individual income tax statutes stem from the “Internal Revenue Code,” which increase tax rates from 2% to that of 6%.

According to this code, residents must file either a form 740 or a 740-EZ, while full-year nonresidents must file form 740-NP. In addition to these requirements, there also exist credits that have been instituted as of 2009. Examples of such credits include the “Kentucky Energy Efficiency Products Tax Credit” and the “New Home Tax Credit.” In order to be eligible for the energy efficiency credit, form 5695-K must be filled. If approved, the credit, equaling 30% of all expenses related to installation, will take effect for the taxable year that all installation was completed in its entirety.

Areas of credit include “energy efficient windows,” “active & passive solar heating systems,” and “upgraded insulation,” to state a few.  The new home credit affects individuals who purchased residence during the yearlong period falling between that of July 26, 2009 to July 25, 2010. If you are granted such credit, you will be sent a “credit allocation letter,” which will contain within it a code from the Department of Revenue confirming your approval. In order for this to go into effect, then, you must attach this letter to your Kentucky income tax return.

In reference to Kentucky sales tax, recent changes have occurred in which the state has entered into a “Streamlined Sales Tax Agreement.” According to this agreement, certain states have joined each other in setting forth a mutual statement of the rules for sales and use tax. In this way, these states as well as Kentucky will mirror each other in terms of those specifications. Kentucky sales tax will, then, encompass the sale of “tangible personal property” by retailers as well as specific services within the state.

In contrast, use tax is placed of products for storage or other consumption purposes. This usually relates to such storage procured outside of the boundaries of Kentucky. Examples of such “consumer” use tax that is needed include online or catalog purchases. You should be aware that, upon completing such purchase, you may actually owe payment of use taxes. Kentucky sales tax is maintained at a rate of 6%, with no local taxes being in existence to present any additional variations.

For drivers within the state of Kentucky, they may not actually know that “motor fuels taxes” exist for distributors. These consist of taxes imposed upon gasoline and other such fuels. The minimum price of taxation is that of a whole sale amount of $1.786 per gallon. Liquid petroleum gases are also taxed as soon as it is determined that such gas is being used by vehicles on public roadways. In contrast to other taxes collected within the state of Kentucky, motor fuels taxes are to be sent to the “Road Fund.” These funds go towards the creation and overseeing of Kentucky roads.


Kentucky State Tax: Understanding the Tax Policies in the Bluegrass State

Kentucky, known as the Bluegrass state, has a population of over 4 million residents and is home to several iconic attractions including bourbon country, the Kentucky Derby, and Mammoth Cave. Although it is not considered one of the most popular states for tourism, Kentucky has a diverse economy that contributes to the country’s overall economic growth. The state’s economy is fueled by various industries including agriculture, manufacturing, healthcare, and mining. To maintain the state’s economic growth and support public services such as education, transportation, and healthcare, Kentucky relies on taxes to generate revenue. In this article, we will examine the state tax policies in Kentucky, the steps you need to take to file your Kentucky state taxes, and other important information that you need to know about Kentucky state taxes.

What are State Taxes?

State tax is the amount of money residents in a particular state pay to their government annually. Every state in the United States has a different tax rate. The state tax is used to support public projects such as education, healthcare, public safety, and transportation. State taxes are also used to fund local government projects such as municipality operations, road maintenance, and utilities.

Kentucky State Tax Policies

Kentucky has state income tax, which means that residents pay taxes on their income. The income tax rate in Kentucky is based on the taxpayer’s earnings. Currently, the Kentucky income tax rate ranges from 2% to 6% of the taxpayer’s income. This tax rate applies even if the taxpayer earned the income outside of the state.

In addition to income tax, Kentucky resident taxpayers also pay sales tax, property taxes, and excise taxes. Below is a breakdown of the Kentucky state tax policies and the corresponding tax rate for each type of tax.

Sales Tax

Kentucky has one of the highest tax rates in the United States, with a 6% sales tax rate in the state. However, there are also county taxes that vary depending on location. For example, counties such as Adair, Carter, Clay, Floyd, Harlan, Hopkins, Jessamine, Knox, Lawrence, and many others have county taxes of up to 2%, making the total sales tax rate in those counties reach up to 8%.

The sales tax rates for food and beverage products, prescription drugs, and medical equipment are lower than the standard 6% sales tax. Food and beverage products, for example, are subject to a 2% sales tax, and prescription drugs and medical equipment are exempted from sales tax.

Property Tax

Property tax in Kentucky is levied on all real and personal property within the state. The property tax rate varies depending on the taxpayer’s county and the property’s value. In Kentucky, property tax is assigned at the county level, so different online calculators may give you different rates.

Excise Tax

Kentucky residents also pay excise taxes on certain products and services. Some of these taxes include cigarette taxes, alcohol taxes, and gasoline taxes. The excise tax rate for cigarettes is $1.10 per pack. The alcohol tax rate derives from the type of alcohol being purchased and ranges between 4% and 20% of the retail price, and the gasoline tax rate is 32.2 cents per gallon.

Who Needs to File a Kentucky State Tax Return?

If you are a resident of Kentucky, you need to file a Kentucky state tax return. A resident taxpayer is defined by the state as anyone who has a domicile in Kentucky for any part of the year whether it is for business or personal purposes. Residents pay taxes on all their income, including income earned outside of Kentucky. Nonresidents who work in Kentucky must file a state tax return and pay taxes on all the income they earn within the state.

If you have a gross income of over $12,880 or your status is single and under 65 years old, you must file a Kentucky state tax return. Kentucky state tax returns should be filed by April 15th every year, the same day as the federal income tax return.

How to File Your Kentucky State Tax Return

The Kentucky Department of Revenue recommends the use of electronic filing as it is the most convenient and fastest way to file your state taxes. Taxpayers can access the Kentucky Department of Revenue website and click on the “myRevenue” link to fill out the necessary forms. However, if for any reason you cannot file electronically, you can send a physical copy of your tax return to the Kentucky Department of Revenue.

Kentucky State Tax Credits and Deductions

Taxpayers in Kentucky can claim several tax credits and deductions to reduce their state tax liability. Some of the most common tax credits in Kentucky include:

Child and Dependent Care Expenses Tax Credit: This credit is for taxpayers with eligible dependents that need care while the taxpayer is at work. Currently, the credit ranges from 20% to 50% of eligible expenses.

Education Expense Tax Credit: This is a credit for those who pay tuition, fees, and textbook expenses as well as other qualified expenses for K-12 education. The credit allows you to claim up to $1,000 per qualifying child.

Credit for Individual Income Taxes Paid to Another State: Residents who earned income outside of Kentucky and paid taxes in that state can claim a credit in their Kentucky tax return.

Earned Income Credit: This credit is for low-to-moderate-income taxpayers with qualifying dependents. The credit can range from $9 to $6,728 or more depending on the taxpayer’s status and the number of qualifying dependents.

Some common tax deductions that can reduce Kentucky taxpayers’ state tax liability include:

Standard Deduction: Kentucky residents can claim the same standard deduction provided by the IRS. The deduction amount for Kentucky taxpayers varies depending on their filing status.

Itemized Deductions: Kentucky taxpayers can choose to itemize their deductions rather than taking the standard deduction. Itemized deductions may include expenses such as mortgage interest, property taxes, and charitable donations.

Conclusion

Kentucky residents must pay various types of state taxes, including income tax, sales tax, property tax, and excise tax. Knowing the state tax policies and understanding how to file your taxes can help you avoid penalties and ensure that you pay the right amount on your state taxes. Taxpayers also have access to several tax credits and deductions that can help reduce their state tax liability. Remember to file your Kentucky state tax return by April 15th of every year for smooth tax compliance.


Kentucky Tax: Understanding the Tax Structure in the Bluegrass State

Kentucky is known for its rolling hills, horse racing, and bourbon, but it’s also a state with a unique tax system. From sales tax to property tax, Kentucky has a variety of taxes that residents and businesses must navigate. In this article, we’ll explore the tax structure in Kentucky, the current tax rates, and recent changes to the tax code.

Overview of Kentucky Tax System

The Kentucky tax system is composed of several types of taxes, including income tax, sales tax, property tax, and more. The Commonwealth of Kentucky is one of only seven states that impose a tax on personal income, and this tax is graduated based on income levels.

On the other hand, Kentucky’s sales tax, which is one of the state’s largest sources of revenue, is a 6% tax imposed on the sale of goods and some services. In some counties and cities, local taxes can be added to the state sales tax, making it higher than 6%.

In addition to income and sales tax, Kentucky imposes a property tax, which is also graduated based on the assessed value of the property. The property tax rate is set annually by the school district and other government agencies.

Other taxes in Kentucky include a limited liability entity tax, a transient room tax, and cigarettes and tobacco tax.

Income Tax in Kentucky

Like most states, Kentucky has a graduated income tax structure. Tax rates range from a low of 2% to a high of 6%, depending on the taxpayer’s income level. Below is the current tax rate applied in Kentucky:

– 2% for the first $3,000 of taxable income
– 3% for taxable income between $3,001 and $4,000
– 4% for taxable income between $4,001 and $5,000
– 5% for taxable income between $5,001 and $8,000
– 5.7% for taxable income between $8,001 and $75,000
– 6% for taxable income above $75,001

For example, if you’re a single taxpayer who earns $50,000 per year, you’ll be taxed at 5.7%, or $2,850 in Kentucky state income tax. In contrast, if you’re married filing jointly and your combined taxable income is $100,000, your tax rate will range from 2% to 6%.

Sales and Use Tax in Kentucky

The sales and use tax in Kentucky is 6%, which is applied to the purchase of goods and some services. The funds collected from sales tax fund different public services and organizations throughout the state. However, counties and other local districts can also collect a local sales tax, bringing the total sales tax rate higher than 6%.

According to the Kentucky Department of Revenue website, taxable goods include “tangible personal property, custom software, ed services, certain digital property, and admission to specified places of amusement and entertainment.”

The sales and use tax applies to a wide range of items including:

– Retail sales of goods
– Rentals and leases of tangible personal property
– Admission charges for entertainment and sporting events
– Telecommunications services
– Installation, repair, and maintenance services
– Short-term rentals of motor vehicles
– Digital goods such as e-books, software, and movies

However, some items are exempt from sales tax, including:

– Prescription medicines
– Incontinence products
– Food and beverages sold through vending machines
– Medical equipment
– Electricity used in manufacturing

Property Tax in Kentucky

Property taxes in Kentucky are graduated based on the assessed value of the property. The current property tax rate is 12.2 cents per $100 of assessed value. This tax rate is used to fund education, local governments, and other public services.

According to the Kentucky Department of Revenue, the taxable value of a property is calculated by multiplying its assessed value by the tax rate. For example, if a property has an assessed value of $100,000, the property tax would be $122 per year.

One of the unique features of property taxes in Kentucky is the property tax exemption for senior citizens. If you’re a homeowner who’s 65 years or older, you might be eligible for this exemption.

Cigarettes and Tobacco Tax in Kentucky

As a state known for its tobacco production, Kentucky imposes high taxes on cigarettes and other tobacco products. According to the Kentucky Department of Revenue, the excise tax on a pack of cigarettes is 60 cents.

In addition to the excise tax, Kentucky imposes a floor stock tax on cigarettes and other tobacco products. This tax is paid by retailers on their existing inventory of tobacco products.

Other Taxes in Kentucky

In addition to the taxes previously mentioned, Kentucky imposes a variety of other taxes. Some of these taxes include:

– Excise tax on motor vehicles
– Limited liability entity tax
– Transient room tax
– Unemployment insurance tax

Changes to Kentucky Tax Code

Over the past few years, Kentucky has made some significant changes to its tax code. In 2019, the Kentucky legislature passed a tax reform bill that made several changes to the state’s tax system.

One of the most significant changes to the tax code was the reduction in the state income tax rate. The 2019 tax reform bill reduced the tax rate on income between $8,001 and $75,000 from 5.8% to 5.7%.

The tax reform bill also created a deduction for individuals who receive dividend income from Kentucky companies. This deduction is equal to the amount of dividend income received and can be applied to reduce the taxpayer’s Kentucky income tax liability.

Another significant change to the tax code was the elimination of the non-resident withholding tax. This tax was imposed on out-of-state individuals and entities who received income from Kentucky sources. However, the 2019 tax reform bill eliminated this tax.

Conclusion

The Kentucky tax system is unique and can be overwhelming for both residents and businesses. However, by understanding the different types of taxes and how they work, individuals and businesses can navigate the system successfully.

When it comes to taxes, it’s always essential to seek professional guidance from an experienced tax advisor or accountant. By doing so, you can ensure that you’re following the most recent updates and taking advantage of any deductions or credits that are available to you. Additionally, the Kentucky Department of Revenue website offers taxpayers a comprehensive guide on taxes in Kentucky, including forms and instructions for filing taxes.