Kentucky Income Tax Filing Requirements

The state of Kentucky requires individuals who live in the Bluegrass State and/or earn income from sources within the state to file a tax return. This includes residents, part-year residents, and nonresidents. The filing requirement is determined by a person’s family size, modified gross income, and Kentucky-adjusted gross income. Generally, people who have a family size of two or less and an adjusted gross income of $11,670 or less are exempt from filing. Those who are 65 or older also may be able to avoid having to file by earning $6,500 or less in annual income.

A person who has a family of three or more and earns $15,790 or more will be required to file. In addition, anyone who is self-employed or whose spouse earns more than $24,300 must file a return. This also applies to taxpayers who claim the federal child and dependent care credit.

Those who are unable to file their returns due to financial hardship can request an extension through KY File. According to the Department of Revenue website, this system is designed to be the electronic equivalent of a paper form. It can help check math errors without asking questions, explaining tax scenarios, or performing complex calculations.

The deadline for filing a return and paying any owed taxes in Kentucky is April 15, the same as the federal filing deadline. However, the state has a six-month grace period, meaning taxpayers will not be charged interest on any unpaid taxes between April 15 and July 15.

How to File a Kentucky Income Tax Return?

If you file an individual return, the deadline to submit your Kentucky return is April 15 (or the next business day if that date falls on a weekend or holiday). You can also apply for a tax extension by filing Form 40A102. This extension gives you an extra six months to file your returns and pay any taxes you owe.

Kentucky’s personal income tax is based on federal adjusted gross income plus several deductions and credits. These include the Family Size Tax Credit, equal to 20% of the federal child and dependent care credit, and the Education Tuition Tax Credit, a refundable credit for low-income families. In addition, the commonwealth has eliminated a number of itemized deductions, including premiums paid for health and long-term care insurance.

If you are a resident of Kentucky and derived income from within the state, you can use free online tools to complete your returns. The Kentucky Department of Revenue offers a tool called KY File, which allows you to complete your forms, have basic calculations done, and electronically sign and e-file your return. However, the program does not ask questions to help you understand your tax situation or perform complex calculations.

How to File a Kentucky Return Extension?

Individuals unable to file their Kentucky return by the original due date can request an extension by filing Form 740-EXT. This form is available for e-filing and must be submitted by the return’s original due date to avoid late penalties. Individuals requesting an extension must include their Federal extension (IRS Form 4868) with their Kentucky return to receive the additional six months of time to file.