Preparing your Kentucky Form 740 might be easier this year. The individual Kentucky tax rate beginning on January 1, 2018 is a flat 5%. That means there are no more Kentucky tax tables to fumble through, as Kentucky tax tables will no longer be published. For most Kentucky taxpayers, all you will need to do this year is multiply line 11 by 5%.
A flat tax rate is often criticized as being unfair to low income earners. What most critics fail to consider are the various deductions and credits given to low income tax earners, at both the Federal and State levels. Such credits and deductions often result in low income earners paying little to no income tax at all.
The Kentucky Form 740 Instructions explains what's new for this filing season. The Family Size Tax Credit provides benefits to individuals and families at incomes up to 133 percent of the federal poverty level. For 2018, the threshold amount is $12,140 for a family size of one, $16,460 for a family of two, $20,780 for a family of three, and $25,100 for a family of four or more. The Kentucky standard deduction for 2018 is $2,530.
To learn more visit the Kentucky Department of Revenue official website.