![]() ![]() The only deductions that residents can now claim on their state income taxes are for charitable donations, mortgage interest and Social Security income. When reforming the state tax code in early 2018, legislators eliminated most deductions. These include the Child and Dependent Care Credit, which is equal to 20% of the federal credit by the same name (up to $210 for one child and $420 for two or more children) the Family Size Tax Credit, available to low-income families and the Education Tuition Tax Credit. There are a number of additional credits available to families and parents in Kentucky. Active duty military pay is also exempt from state taxes in Kentucky. Interest from federal obligations (treasury notes, etc.) is exempt, while interest income from the municipal bonds of other states is taxable. Pension and annuity income up to $31,110 is also exempt. Social security benefits are exempt, as is retirement income from any Kentucky governmental retirement systems. Many types of retirement income that are taxable at the federal level are not taxable in Kentucky. The result is Kentucky taxable income, to which the above rates are applied. To calculate taxes owed, taxpayers in Kentucky must make certain additions and subtractions to their federal adjusted gross income (AGI). Prior to 2018, the state had rates ranging from 2% to 6%. The state income tax rate is 5% regardless of income. This differs from the federal income tax, which has a progressive tax system (higher rates for higher income levels). If you’re ready to find an advisor who can help you achieve your financial goals, get started now. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. Kentucky is one of just a handful of states to impose a tax on inheritances.Ī financial advisor can help you understand how taxes fit into your overall financial goals. The second is the state's inheritance tax. These rates range from 0.00075% up to 2.50%. ![]() The first is local occupational taxes, which are collected by both counties and cities and are levied on both individuals' wages and businesses' earnings. There are two unique aspects of Kentucky’s tax system. Both the sales and property taxes are below the national averages, while the state income tax is right around the U.S. Kentucky has a flat income tax rate of 5%, a statewide sales tax of 6% and property taxes that average $1,382 annually. Gas tax: 24.6 cents per gallon of regular gasoline, 21.6 cents per gallon of diesel.Property tax: 0.80% average effective rate. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |