Kentucky paychecks in 2026: what changed
Kentucky's income tax rate went down for 2026.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- State income tax: 3.5%, down from 4%.
- Standard deduction in the withholding formula: $3,360.
- Minimum wage: still $7.25.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 Kentucky paycheck →
Other Kentucky calculators
Paycheck calculator · Hourly paycheck calculator · Salary paycheck calculator · What changed for 2026
Other states: Alabama · Alaska · Arizona · Arkansas · California · Colorado · Connecticut · Delaware · District of Columbia · Florida · Georgia · Hawaii · Idaho · Illinois · Indiana · Iowa · Kansas · Louisiana · Maine · Maryland · Massachusetts · Michigan · Minnesota · Mississippi · Missouri · Montana · Nebraska · Nevada · New Hampshire · New Jersey · New Mexico · New York · North Carolina · North Dakota · Ohio · Oklahoma · Oregon · Pennsylvania · Rhode Island · South Carolina · South Dakota · Tennessee · Texas · Utah · Vermont · Virginia · Washington · West Virginia · Wisconsin · Wyoming
Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- Kentucky Department of Revenue — 42A003 (TCF)(10-2025), 2026 Kentucky Withholding Tax Formula — 3.5% flat rate; $3,360 standard deduction; four-step formula; monthly and bi-weekly examples
- Kentucky Department of Revenue — 2026 Withholding Tax Tables, Computer Formula 42A003 (TCF)(10-2025) — wage-bracket tables to the cent
- Kentucky Department of Revenue — Form K-4 (42A804), Kentucky's Withholding Certificate (2026) — flat 3.5% with $3,360 standard deduction; low-income exemption threshold $15,650 for a household of one; K-4 only needed to claim exemption or request extra withholding
- Kentucky Department of Revenue — Withholding Kentucky Income Tax, Instructions for Employers (42A003, 4-21) — wages as defined in IRC §3401; 401(k) and cafeteria plan amounts not subject to withholding
- Kentucky General Assembly — 2025 HB 1 — rate cut from 4% to 3.5% for taxable years beginning on or after Jan. 1, 2026
- KRS 141.310 — Withholding of tax from wages paid by employer — voluntary additional withholding by agreement
- KRS 67.750 — Definitions (local occupational license taxes) — compensation includes 401(k) deferrals and section 125 contributions
- Louisville Metro Revenue Commission — W-1 tax form instructions — 2.2% residents, 1.45% non-residents
- Lexington-Fayette Urban County Government — Occupational license fee rates — 2.25% of compensation
- Fayette County Public Schools — Tax Collection Office — 0.5% on compensation of Fayette County residents for work in Fayette County (KRS 160.605)
- Kentucky Office of Unemployment Insurance — Employer guide — employers pay for unemployment insurance through taxes on their payroll
- Kentucky Labor Cabinet — Kentucky Wage and Hour Laws poster — $7.25 since July 1, 2009; $2.13 tipped cash wage; overtime after 40 hours and on the seventh day; final pay
- KRS 337.020 — Time of payment of wages — at least semimonthly, for work up to 18 days before payday