Kentucky charges 3.5% flat state income tax plus local taxes in some areas. Use the stock option tax calculator pre-loaded with Kentucky rates.
Open Stock Option Tax Calculator →Stock option exercises in Kentucky are subject to a flat 3.5% state income tax on top of federal tax. For NSOs, the spread at exercise is ordinary income subject to both federal and Kentucky state tax plus FICA. For ISOs, while there is no regular tax at exercise, the spread counts for AMT purposes and for Kentucky state tax calculations. Local taxes in parts of Kentucky further increase the cost of exercising. This calculator helps you plan the optimal time and amount to exercise given Kentucky's tax rates.
Kentucky levies a flat 3.5% state income tax on all taxable income regardless of how much you earn. This makes tax planning straightforward: for every additional dollar you earn, 3.5 cents goes to Kentucky. However, certain localities in Kentucky impose their own income taxes, which effectively raise the combined state and local rate above 3.5%. Be sure to check whether your city or county adds a local income tax.
The table below shows what you actually keep at five salary levels in Kentucky, accounting for federal tax, FICA, and Kentucky's flat 3.5% state tax plus estimated local taxes.
See how Kentucky compares to other South states. Each link takes you to the stock option tax calculator landing page for that state.
For a comprehensive breakdown of Kentucky’s tax structure, salary comparisons, cost-of-living analysis, and more, visit the full Kentucky take-home pay page.