Get Ky Dor 42a740(pkt) 2023-2026

Many permanent income tax rate cuts that passed were measured by roughly a tenth of a percentage point (in Georgia, Idaho, Iowa, Kansas, South Carolina, and Utah). Half of those –Georgia, Iowa, and South Carolina – sped up cuts already on the books. A handful of other states pushed through deeper income tax cuts.

We are on track to eliminate Kentucky's individual income tax, and we are doing so while providing for the necessary programs that Kentuckians depend on.” The bill helped Kentucky's income tax go down from 5% to 4.5% in 2023 before going down another half-percentage point to 4% in 2024.

Raising of Sales Tax De Minimis Standard to $12,000: In 2022, the Kentucky General Assembly significantly expanded the state sales and use tax base to include over 30 new services. However, it legislated a safeguard in that receipts for taxable services under $6,000 in a calendar year were not subject to sales tax.

Kentucky allows pension income (including annuities, IRA accounts, 401(k) and similar deferred compensation plans, death benefits, etc.) paid under a written retirement plan to be excluded from income on the Kentucky return. Report only pension income received while a resident of Kentucky.

Other Residents Non-residents and part-year residents must file an income tax return (Form 740-NP, Kentucky Nonresident and Part-Year Resident Individual Income Tax Return) if any gross income from Kentucky sources or other sources exceeds the modified gross income limits for their family size.

We are on track to eliminate Kentucky's individual income tax, and we are doing so while providing for the necessary programs that Kentuckians depend on.” The bill helped Kentucky's income tax go down from 5% to 4.5% in 2023 before going down another half-percentage point to 4% in 2024.

Kentucky missed the latter tax cut trigger last summer, which prevented the lowering of the income tax rate from 4% to 3.5% in the 2025 calendar year.