How Much Is Kentucky State Income Tax in 2026? 3.5% Flat Tax

Quick Answer: Kentucky Income Tax at a Glance

Kentucky's flat state rate dropped to 3.5% for 2026 — half what it was in 2022 — and lawmakers want to keep cutting toward zero. But most Kentucky workers also pay a local occupational tax. Estimate your 2026 take-home pay after federal tax, FICA, and Kentucky state tax.

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How Kentucky taxes your income in 2026

Kentucky's flat rate is 3.5% for 2026, down from 4% in 2024–2025 and 5% before that. Under HB 8, the rate steps down by 0.5% whenever the state meets revenue and reserve targets — with the stated long-term goal of eliminating the income tax entirely. The standard deduction is $3,360 and, unusually, is the same for single and joint filers (it is not doubled for couples).

Local occupational taxes add up

Most Kentucky counties and many cities levy occupational license taxes on wages — typically 0.5%–2.5%. Louisville/Jefferson County charges 2.2% for most workers, Lexington/Fayette County 2.25%, and Covington 2.45%. These apply on top of the 3.5% state rate, so real combined income tax in Kentucky's job centers is closer to 6%. Social Security benefits are fully exempt from Kentucky tax, and up to $31,110 of pension/annuity income per person is excluded.

What this calculator includes (and excludes)

This estimate covers federal income tax, FICA, and Kentucky's 3.5% state tax with the 2026 standard deduction. It does not include local occupational taxes (which can add 0.5%–2.5%), the pension exclusion, itemized deductions, or credits. Your actual take-home pay will be lower than shown if you live or work in a taxing locality. Figures are estimates for planning purposes, not tax advice.

Take-Home Pay by Income Level in Kentucky

The table below shows estimated annual take-home pay for a single filer with no credits or pre-tax contributions. It includes federal income tax, FICA, and Kentucky state income tax.

Gross Income	Federal Tax	FICA	KY State Tax	Take-Home Pay
$50,000	$3,820	$3,825	$1,632	$40,723
$75,000	$7,670	$5,738	$2,507	$59,085
$100,000	$13,170	$7,650	$3,382	$75,798
$150,000	$24,734	$11,475	$5,132	$108,659
$200,000	$36,734	$14,339	$6,882	$142,045

Estimated Tax Breakdown

Take-home $75,798

Federal

$13,170 13.2%

State

$3,382 3.4%

FICA

$7,650 7.6%

Net Pay

$75,798 75.8%

Frequently Asked Questions

What is the Kentucky income tax rate in 2026?

A flat 3.5%. Kentucky's rate was 5% in 2022 and has been stepping down by 0.5% per year as the state meets revenue triggers under HB 8, with a long-term goal of zero.

Does Kentucky have local income taxes?

Yes. Most counties and many cities levy occupational license taxes on wages — commonly 0.5%–2.5%. Louisville is about 2.2% and Lexington about 2.25%. This calculator shows the 3.5% state tax only.

Does Kentucky tax Social Security or retirement income?

Social Security is fully exempt. Kentucky also excludes up to $31,110 per person of pension and annuity income, though IRA and 401(k) distributions above that amount are taxable.

How much is $75,000 after taxes in Kentucky?

A single filer earning $75,000 pays roughly $2,507 in Kentucky state income tax and takes home about $59,085 per year after federal tax, FICA, and state tax — before local occupational tax, which adds roughly $375–$1,875 depending on your locality. See the example table above.

Why is Kentucky's standard deduction so small?

Kentucky sets its own deduction ($3,360 for 2026, indexed for inflation) and does not conform to the federal amount. It's also the same for all filing statuses — joint filers don't get double.