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Understanding Personal Income Tax in Kentucky

Filed under State Taxes. Fact checked on February 12, 2013.

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Kentucky personal income tax is discussed.

If you are a resident or nonresident of Kentucky and receive taxable income individually from property owned or business transacted in Kentucky, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to a personal income tax on your business income that passes through to you. In addition, qualified local governments in Kentucky are authorized to levy a local income tax, so be sure to check with your local government.

The following marginal tax rates are applicable for tax year 2012:

Taxable Income Rate of Tax
up to $3,000 2% of taxable amount
Over $3,000 but not over $4,000 $60, plus 3% of amount over $3,000
Over $4,000 but not over $5,000 $90, plus 4% of amount over $4,000
Over $5,000 but not over $8,000 $130, plus 5% of amount over $5,000
Over $8,000 but not over $75,000 $280, plus 5.8% of amount over $8,000
Over $75,000 $4,166, plus 6% of amount over $75,000

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