Kentucky state tax basis is the Federal Adjusted Gross Income (AGI).

Interest/Divident Income: Interest and Divident income from U.S. government bonds are exempt from State Taxes.

Rent Income: Allows federal farm averaging using Kentucky income.

Capital Gain: Gains on Kentucky Turnpike bonds and property taken by eminent domain are exempt.

Unemployment Income: Same as federal.

Social Security Benefits: All social security income is exempt from state taxes.

State Bond Interest: Taxable except Kentucky obligations.

Health Savings Accounts: Same as federal

Disability: Same as federal.

Lottery: Same as federal.

Federal Income Tax: Not deductible

Other Taxes: Deductions for long-term care and health insurance premiums, income from training or working at election booths, and artistic contributions not claimed as state itemized deduction. Tobacco settlement income is exempt. Deduction for amount claimed for federal work opportunity credit.

Check other state tax links below.