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This information was last verified on May 7, 2026. Tax laws may have changed since then.

Kentuckyworking inKentucky
Your Home State

Kentucky

Welcome home!

You live here. Kentucky taxes all your income regardless of where you earn it. Use Schedule OTP-CR to claim credit for taxes paid to other states so you don't get double-taxed.

Work State Tax Rate
Flat 4.0% (2025), 3.5% (2026)
Withholding Starts
Day 1
Law Last Updated
Jan 1, 2026

Employee Obligations (Which Returns YOU Must File)

This is your home state. File Kentucky Form 740 reporting all income. Claim Schedule OTP-CR for taxes paid to other states.

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.

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Related guides

Row last reviewed: May 7, 2026Home state credit form: Schedule OTP-CR

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.