Individuals · Kentucky filing

Kentucky tax filing: file KY state taxes online, Form 740, flat 4%

Kentucky keeps its state income tax simple with a single flat rate and one standard deduction that applies no matter how you file. The rate has been falling: it was 4.5 percent in 2023, 4.0 percent for 2024 and 2025, and it drops again to 3.5 percent in 2026. The wrinkle that catches people is local. Most Kentucky cities and counties, and many school districts, charge a separate occupational tax on wages, but those are handled through payroll and are not part of your state Form 740.

This page covers what Kentucky requires for tax year 2025 returns filed in 2026: who has to file Form 740, how the flat rate and the standard deduction work, where the local occupational taxes fit, the deadline and the extension, and how Social Security and retirement income are treated. TaxFile prepares your federal and Kentucky returns together from your W-2s and 1099s, finds the deductions and credits you qualify for, runs an error check, and e-files through an authorized IRS e-file provider after you review and approve every line. Pricing is $39 simple, $89 self-employed, $199 business, plus $19 per state return. This is self-prepared tax software, not personalized tax advice; for complex situations, consult a CPA or tax professional.

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The short answer

To file Kentucky state taxes, you file Form 740 with the Kentucky Department of Revenue; part-year residents and nonresidents use Form 740-NP. For tax year 2025 Kentucky taxes income at a flat 4.0 percent rate, with a standard deduction of $3,270 that applies to every filer. The state rate drops to 3.5 percent in 2026. Local cities, counties, and school districts levy separate occupational taxes on wages that are withheld by employers and not filed on Form 740, and Kentucky does not tax Social Security.

Last updated July 2026

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What you get with Kentucky tax filing

Flat 4 percent state rate

Kentucky taxes all income at a flat 4.0 percent for 2025, down from 4.5 percent in 2023, with a scheduled cut to 3.5 percent in 2026. There are no state brackets to work through.

One standard deduction for everyone

Kentucky gives a single standard deduction of $3,270 for 2025 that applies to every filing status, rather than the different amounts the federal return uses.

Local occupational taxes are separate

Cities, counties, and school districts levy occupational taxes on wages, such as 2.2 percent in Louisville Metro. These are withheld by employers, not filed on Form 740.

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TaxFile reads your W-2s, 1099s and receipts, classifies your income, finds the deductions and credits you qualify for, runs an error and audit-risk check, and assembles a return you review and approve before filing.

Shows whether your income requires a Kentucky return
Applies the flat 4 percent state rate and the $3,270 standard deduction
Prepares the federal and Kentucky Form 740 returns from one set of documents
Applies the Social Security subtraction and pension exclusion where they fit
E-files through an authorized IRS e-file provider after you review and approve

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Self-employment tax deduction $6,120

Home office (simplified) $1,500

QBI deduction $2,880

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Do you have to file a Kentucky tax return?

Kentucky ties its filing requirement to your modified gross income and family size rather than a single flat number, and you also file if Kentucky tax was withheld or is owed. Full-year residents file Form 740; part-year residents and nonresidents with Kentucky-source income file Form 740-NP. The state gives one standard deduction that applies to everyone.

Item	2025 amount
Standard deduction (all filing statuses)	$3,270
Flat income tax rate	4.0%
Family Size Tax Credit top income tier	Modified gross income up to $42,760

The Family Size Tax Credit can reduce or eliminate the tax for lower-income households, scaled to the number of people in the family. The rules are published by the Kentucky Department of Revenue, and the state tax filing pillar compares Kentucky with the other states.

The flat rate and the standard deduction

Kentucky taxes income at a flat 4.0 percent for tax year 2025. There are no graduated brackets, so the math is your Kentucky taxable income times 0.04, less credits. The rate has been coming down on a schedule tied to state revenue targets.

Tax year	Kentucky flat rate
2023	4.5%
2024 and 2025	4.0%
2026	3.5%

Every filer subtracts the same $3,270 standard deduction for 2025, up from $3,160 in 2024, before the flat rate applies. Kentucky does not offer a separate personal exemption. Because the rate is flat and the deduction is fixed, two people with the same taxable income pay the same Kentucky tax regardless of filing status, which is unusual among the states.

Local occupational taxes, Social Security and retirement

The piece of Kentucky tax that surprises newcomers is local. Most cities and counties, and many school districts, charge an occupational license tax on wages earned within the jurisdiction. Despite the name, it functions as a local income tax on your pay. It is withheld by your employer and remitted to the local government, so it is not reported on your state Form 740, and TaxFile does not prepare those local filings.

Jurisdiction	Occupational tax rate
Louisville Metro (Jefferson County)	2.2% total
Lexington-Fayette	2.25%
Statewide range across cities and counties	roughly 0.5% to 2.5%

On the state return, Kentucky is friendly to retirees. Social Security is not taxed at all, and up to $31,110 per person of taxable pension and retirement income is excluded, with a larger exclusion for government retirees with service before 1998. Kentucky has no state Earned Income Tax Credit, but it does offer a Family Size Tax Credit and a Child and Dependent Care Credit worth 20 percent of the federal credit. TaxFile applies the deductions and credits you qualify for automatically.

Kentucky filing deadline, extension and filing online

Date	What it means for a 2025 Kentucky return
April 15, 2026	Form 740 due, and any tax owed is due in full
April 15, 2026	Pay at least 75% of the tax by this date to avoid the late-payment penalty
October 15, 2026	Extended filing deadline when you have a federal or state extension

Kentucky's deadline is April 15, 2026 for tax year 2025 returns, matching the federal date. Kentucky honors a valid federal extension, so if you filed IRS Form 4868 you generally do not need a separate state form unless you owe tax; in that case you file Form 740EXT with your payment. The extended filing date is October 15, 2026.

An extension moves the filing date, not the payment date. Kentucky asks you to pay at least 75 percent of the tax you owe by April 15, 2026 to avoid the late-payment penalty, with interest on any unpaid balance. Filing electronically is the practical default, and the Kentucky return builds on your federal figures. TaxFile prepares both from one pass:

Upload or talk. Drop in your W-2s and 1099s and it reads them, or describe your year and it asks what it needs.
Federal and Kentucky together. One set of documents produces both returns, with the flat rate and the standard deduction applied.
Credits checked. It applies the Social Security subtraction, the pension exclusion, and the family and dependent-care credits where they fit.
Error check, then you approve. Nothing is e-filed until you review and approve every line, through an authorized IRS e-file provider.

Pricing is $39 for a simple return, $89 self-employed, $199 business, plus $19 for each state return. There is no free tier. If your Kentucky income comes from contract or freelance work, self-employed tax filing covers Schedule C and Schedule SE in more detail. TaxFile does not prepare local occupational tax filings, does not e-file federal extensions or amended returns, and does not handle capital gains on Schedule D, rental income on Schedule E, or cryptocurrency. TaxFile is self-prepared tax software and does not provide personalized tax advice, and no refund amount is guaranteed.

Good questions

Questions about kentucky filing

You must file a Kentucky Form 740 for 2025 if your income is above the modified-gross-income threshold for your family size, or if Kentucky tax was withheld and you want it refunded. Kentucky applies one standard deduction of $3,270 to every filer. Part-year residents and nonresidents with Kentucky-source income file Form 740-NP instead.

Kentucky taxes income at a flat 4.0 percent for tax year 2025. There are no brackets, so every dollar of Kentucky taxable income is taxed at the same rate after the $3,270 standard deduction. The rate was 4.5 percent in 2023 and is scheduled to fall to 3.5 percent in 2026.

Kentucky cities, counties, and school districts levy occupational license taxes on wages earned in the jurisdiction, which act as local income taxes. Louisville Metro is 2.2 percent and Lexington-Fayette is 2.25 percent, with rates statewide running roughly 0.5 to 2.5 percent. Employers withhold them, so they are not filed on your state Form 740.

Kentucky returns for tax year 2025 are due April 15, 2026. Kentucky honors a federal extension to October 15, 2026, and you file Form 740EXT only if you owe tax or did not file a federal extension. Pay at least 75 percent of the tax by April 15 to avoid the late-payment penalty, with interest on any unpaid balance.

No. Kentucky does not tax Social Security benefits at all. It also excludes up to $31,110 per person of taxable pension and retirement income, with a larger exclusion for government retirees who had service before 1998. Kentucky has no state Earned Income Tax Credit but offers a Family Size Tax Credit for lower-income households.

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