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Individual Income Tax

Unemployment Benefits Fully Taxable on Kentucky Return

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Kentucky Individual Income Tax Return Filing Date Extended to May 17   

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COVID-19 Tax Relief Frequently Asked Questions

For additional information, please visit our COVID-19 Tax Information page.

Individual Income Tax is due on all income earned by Kentucky residents and all income earned by nonresidents from Kentucky sources.

Kentucky's individual income tax law is based on the Internal Revenue Code in effect as of December 31, 2018. The tax rate is five (5) percent and allows itemized deductions and certain income reducing deductions as defined in KRS 141.019​. A full-year resident of Kentucky files Form 740 and a person who moves into or out of Kentucky during the year or is a full-year nonresident files Form 740-NP.

Individual income tax laws are found in Chapter 141 of the Kentucky Revised Statutes.​​

New Filing Option - Free Fillable Forms

Kentucky is now offering a new way to file your return. If you would like to fill out your Kentucky forms and schedules without software help or assistance, you may use KY File, the New Kentucky Filing Portal, to file your current year return. KY File is designed to be the simple, electronic equivalent of paper forms. It will provide basic mathematical calculations and simple error checking, but unlike most tax software, it doesn't ask about or explain tax situations. You will need to have your federal forms completed before accessing KY File. Click here to learn more about your free filing options.


Schedule P, Kentucky Pension Income Exclusion

For all individuals who are retired from the federal government, the Commonwealth of Kentucky, or a Kentucky local government with service performed prior to January 1, 1998, you may be able to exclude more than $31,110*.  If your pension income is greater than $31,110, you will need to complete Kentucky Schedule P, Kentucky Pension Income Exclusion to determine how much of your pension income is taxable.  You may use the worksheet in the Schedule P instructions or you may use the Schedule P calculator to determine your exempt percentage.

*($41,110 for taxable year 2017 and earlier)


​The Internal Revenue Service has issued retroactive extensions of several tax matters that include the following: treatment of mortgage insurance premiums as qualified residence interest, exclusion from gross income of discharge of qualified principal residence indebtedness, and deduction of qualified tuition and related expenses.  Read More Here


Form 740
   2019 Qualified Mortgage Insurance Premiums Worksheet (740).pdf
   2018 Qualified Mortgage Insurance Premiums Worksheet (740).pdf

Form 740NP

   2019 Qualified Mortgage Insurance Premiums Worksheet (740NP).pdf
   2018 Qualified Mortgage Insurance Premiums Worksheet (740NP).pdf


Pay Income Tax

To File a Return


Electronic Filing

Pay a 740 or 740-NP
     Kentucky Department of Revenue
     Frankfort, KY 40619-0008

Refund or No Payment 740 or 740-NP
     Kentucky Department of Revenue
     Frankfort, KY 40618-0006

740-NPR
     Kentucky Department of Revenue
     Frankfort, KY 40620-0012

Overnight Address
     Kentucky Department of Revenue
     501 High Street
     Frankfort, KY  40601


To Pay a Bill, Make an Estimated Payment or Pay an Electronic Payment Voucher

Electronic payment: Choose to pay directly from your bank account or by credit card.  Service provider fees may apply.

If paying by check or money order, make it payable to "KY State Treasurer" and mail to
     KY Department of Revenue
     Frankfort, KY  40619-0008




All tax payment and e-file options

Common Kentucky Individual Income Tax Credits

There are four common nonrefundable individual income tax credits available for taxpayers when the tax return is filed.
​

​Personal Credits

Personal tax credits are reported on Schedule ITC and submitted with Form 740 or 740-NP.

A $40 tax credit is allowed for each individual reported on the return who is age 65 or over. Also, a $40 tax credit is allowed if an individual is legally blind. Persons who are both age 65 or older and legally blind are eligible for both tax credits for a total of $80 per person.

M​embers of the Kentucky National Guard may claim a tax credit of $20; military reserve members are not eligible.

KRS 141.020
​

​Nonrefundable Family Size Tax Credit

The family size tax credit is based on modified gross income and the size of the family. If total modified gross income is $34,846 or less for 2020, you may qualify for the Kentucky family size tax credit.

KRS 141.066
​
​

Income Gap Tax Credit

This credit is only available to taxpayers who are eligible to take the Family Size tax credit and have a family size of three or less. This credit was created for those taxpayers whose tax rate increased after HB 487 implemented a flat tax rate of 5%. This credit will be available for tax years 2019 and 2020.

KRS 141.066


​

​Education Tuition Tax Credit

A credit equal to 25 percent of the amount of the federal American Opportunity Credit and the Lifetime Learning Credit is available. The credit applies only to undergraduate studies, phases out for higher incomes, applies to most higher education opportunities within Kentucky and may be carried forward for up to five (5) years.

KRS 141.069
​

​Child and Dependent Care Credit

Kentucky taxpayers claiming the child and dependent care credit will claim this credit on Form 740 or 740-NP. The credit is claimed on line 24 of Form 740 or Form 740-NP by entering the amount of the federal credit from federal Form 2441 and multiplying by 20 percent.

KRS 141.067


To learn more about the credits available on the federal income tax return, including the earned income tax credit (EITC), please visit www.irs.gov.

Looking for Business Tax Credits?​ ​

FORM 1099-G

If you received a Kentucky income tax refund last year, we’re required by federal law to send Form 1099-G to you to remind you that the state refund must be reported as income on your federal tax return if you itemize deductions.

When you itemize deductions on your federal return you are allowed to deduct state income taxes or sales taxes that you paid during the year. This deduction reduces your federal taxable income. If any part of the state income tax you deducted on your federal return is later refunded to you that amount must be reported as taxable income for the year in which the refund is issued.

Form 1099-G reflects all Kentucky refunds that were credited to you for last year, including refunds from amended returns and prior year returns. The form will include any or all of your refund that was applied to the following:

  • estimated tax account
  • use tax
  • child support debt
  • delinquent tax liability or another bill

Even if your refund was applied to offset a bill or make a donation federal law maintains that you received the benefit of the refund and you must report it as income.

You don’t need to attach the Form 1099-G to your federal or state income tax returns. Just keep it for your records. If you use a professional tax preparer, please give the form to your preparer, along with your W-2s and other tax information. If your address on the form is incorrect or you have other questions, please contact the Kentucky Department of Revenue.​​​​​​

Use Tax on Individual Income Tax Return

Kentucky use tax may be due on internet, mail order, or other out-of-state purchases made throughout the year.  Please click here to see if you are required to report Kentucky use tax on your individual income tax return. 

Also see line 27 of Form 740 and the optional use tax table and use tax calculation worksheet in the 740 instructions. The current year Form 740 and 740 instructions can be found on the Forms Page.

Individual Income Tax

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