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Controlling Your Taxes Your State Tax Obligations Kentucky Taxes on Business Income in Kentucky Personal Income Tax in Kentucky
Controlling Your Taxes Your State Tax Obligations Kentucky Taxes on Business Income in Kentucky Personal Income Tax in Kentucky
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If you are a resident or nonresident of Kentucky and receive taxable income individually from property owned or business transacted in Kentucky, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to a personal income tax on your business income that passes through to you. In addition, qualified local governments in Kentucky are authorized to levy a local income tax, so be sure to check with your local government.
The following rates are applicable to the amount of income over the exempted amount:
| Taxable Income | Rate of Tax |
| up to $3,000 | 2% |
| over $3,000 but not over $4,000 | $60 + 3% of excess over $3,000 |
| over $4,000 but not over $5,000 | $90 + 4% of excess over $4,000 |
| over $5,000 but not over $8,000 | $130 + 5% of excess over $5,000 |
| over $8,000 but not over $75,000 | $280 + 5.8% of excess over $8,000 |
| over $75,000 | $4,166 + 6% of excess over $75,000 |
