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Kentucky
Employee Obligations (Which Returns YOU Must File)
If you physically work in Kentucky, file a nonresident Kentucky return (tax rate: Flat 4.0% (2025), 3.5% (2026)). Then file your Arkansas return and claim the Form AR1000TC credit so you don't get taxed twice on the same income.
Employer Obligations (What Your Employer Must Withhold & Remit)
Register for withholding and unemployment from day 1. Must also register with local tax authorities. Unemployment applies to the first $11,400 of wages.
City & Local Income Taxes (Extra Filings Beyond the State Return)
87 counties and approximately 170 cities levy occupational taxes on nonresidents ranging from 0.5% to 2.5%. City and county taxes can stack. Louisville Metro charges 1.45% for nonresidents. Lexington-Fayette charges 2.25%. Combined state plus local total can exceed 6%. The M1CR credit does NOT cover these local taxes.
Related guides
More from Arkansas · Cross-State Work
- Arkansas → Mississippi
- Arkansas → Montana
- Arkansas → North Carolina
- Arkansas → North Dakota
- Arkansas → Nebraska
Moving to Kentucky from elsewhere · Cross-State Work
This is general information, not tax or legal advice. Laws change frequently. Always consult a licensed CPA or tax attorney for your specific situation. All information researched as of March 21, 2026.