The Kentucky Tax section is used to enter additional taxes, interest, penalties, or special tax calculations that may apply to your Kentucky return. Most taxpayers will not need to enter anything in this section because Kentucky income tax is calculated automatically based on the information entered elsewhere in the return. For tax year 2025, Kentucky's individual income tax rate is 4%. Eligible farmers and fishermen may also use Kentucky Schedule J (Farm Income Averaging) to calculate their tax.
Program Entry
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- Edit Kentucky Return
- Select Tax
Use Tax
Kentucky use tax applies to taxable items purchased for use in Kentucky when Kentucky sales tax was not collected at the time of purchase. Common examples include:
- Online purchases
- Catalog orders
- Subscription purchases
- Furniture
- Carpet
- Boats
- Other taxable tangible personal property
You may owe Kentucky use tax if you purchased taxable items from an out-of-state seller and no Kentucky sales tax was charged at the time of purchase. The use tax rate is generally 6% of the purchase price. The amount entered here is added to your Kentucky tax liability.
Enter an amount if:
- You made taxable purchases for use in Kentucky.
- Kentucky sales tax was not charged or collected.
- You owe Kentucky use tax on those purchases.
Interest
Interest may apply if you pay your Kentucky tax after the return's due date.
Most taxpayers should leave this field blank unless:
- You received a notice from the Kentucky Department of Revenue showing interest due, or
- You have already calculated the interest separately.
Late Payment Penalty
Kentucky may assess a late payment penalty when taxes are not paid by the due date. The penalty is generally 2% of the unpaid tax for each 30 days or fraction thereof, up to a maximum of 20%, with a minimum penalty of $10.
Most taxpayers should leave this field blank unless:
- You received a notice from the Kentucky Department of Revenue showing a penalty due, or
- You have already calculated the penalty separately.
Late Filing Penalty
A late filing penalty may apply if you file your Kentucky return after the filing deadline. Kentucky generally imposes a penalty of 2% of the tax due for each 30 days or fraction thereof, up to a maximum of 20%. The minimum penalty is typically $10.
Most taxpayers should leave this field blank unless:
- You filed your return after the due date and know the penalty amount, or
- You received a notice from the Kentucky Department of Revenue showing a penalty due.
Schedule J (Kentucky Farm Income Averaging)
Kentucky Schedule J allows qualifying farmers and fishermen to average certain farm income over the previous three tax years. Because farm income can vary significantly from year to year, income averaging may reduce your Kentucky tax liability if you had unusually high farm income during the current year.
Use Schedule J If:
- You qualify for Kentucky Farm Income Averaging.
- You need to complete Kentucky Schedule J calculations.
- You want to determine whether income averaging lowers your Kentucky tax.
For more information, see the Kentucky Schedule J Overview article.