How Kentucky taxes wages
Flat rate cut to 3.5% for 2026.
At $65,000 of wages, that is the 20th-lowest estimated bill of the 42 jurisdictions (including DC) that tax wages.
Its 3.5% rate is the 6th-lowest of the 16 flat-tax states.
Example: $65,000 salary, single filer
| Wages | $65,000 |
|---|---|
| Income not taxed (approx. deduction, exemptions) | −$3,360 |
| Income taxed | $61,640 |
| Flat rate | × 3.5% |
| Estimated Kentucky income tax | $2,157 |
That works out to about $180 a month, or an effective rate of 3.32% of wages.
Calculators for Kentucky
- Paycheck calculator
Take-home pay after federal income tax, Social Security, Medicare, and Kentucky income tax, with Kentucky selected.
- Tips and overtime calculator
Your federal deduction for qualified tips and overtime, with Kentucky selected and its state rules applied to the Kentucky estimate.
- Senior deduction calculator
A federal deduction of up to $6,000 for each person 65 or older, after the income phase-out.
- Car loan interest calculator
A federal deduction for interest on a loan for a new, U.S.-assembled vehicle.
Does Kentucky tax tips and overtime?
Kentucky does not follow the federal tips and overtime deduction. HB 757 (2026) updates Kentucky’s conformity to December 31, 2025, but excludes the tips and overtime deductions.
Qualified tips and overtime you deduct on your federal return (Schedule 1-A) are still taxed by Kentucky, and our estimate taxes your full wages.
Source: Kentucky DOR: TY2026 e-file handbook, Publication 1345 (PDF), July 20, 2026. Checked . See how every state treats tips and overtime
To see your federal deduction and Kentucky tax together, open the tips and overtime calculator with Kentucky selected.
Local income taxes in Kentucky
Most cities and counties charge occupational license taxes on wages (often 1%–2.5%).
These local taxes are not included in the estimate above.
Kentucky vs. neighboring states
Workers in Tennessee, Ohio, Indiana, West Virginia, and Missouri would owe less on the same salary. Virginia and Illinois would charge more.
| State | Est. tax on $65,000 | vs. Kentucky |
|---|---|---|
| Tennessee | $0 | −$2,157 |
| Ohio | $1,012 | −$1,145 |
| Indiana | $1,888 | −$269 |
| West Virginia | $2,088 | −$70 |
| Missouri | $2,152 | −$6 |
| Virginia | $2,921 | +$763 |
| Illinois | $3,073 | +$915 |
Official source
For forms, exact brackets, and filing deadlines, go to the official Kentucky tax agency website.