Kentucky Side Hustle Tax Calculator
Calculate your Kentucky state tax (4%), federal tax, and self-employment tax on 1099 income.
Last updated: January 2026 · Data from IRS Rev Proc 2024-40
Kentucky side hustlers benefit from a competitive flat 4% state income tax rate. The Bluegrass State simplified its tax code in recent years, making it easier for freelancers to calculate their tax obligations. With Louisville and Lexington as major employment centers, Kentucky has a growing gig economy with over 400,000 residents earning self-employment income.
How Side Hustle Taxes Work in Kentucky
Kentucky uses a flat tax system:
**Kentucky state tax:** - Flat rate: 4% on all taxable income - No brackets—everyone pays the same percentage - Applies to net self-employment income after deductions
**Local taxes:** - Louisville has a 2.2% occupational license fee - Lexington has a 2.25% occupational license fee - These apply to net profits from self-employment - Other cities may have lower rates
**Combined rates in major cities:** - Louisville residents: ~6.2% (4% state + 2.2% local) - Lexington residents: ~6.25% (4% state + 2.25% local)
What Kentucky Side Hustlers Owe
Let's say you're a single filer in Louisville with a $52,000 W-2 job and $14,000 in side hustle income from freelance consulting, with $2,000 in business expenses.
**Your estimated taxes on the side hustle:** - Net self-employment income: $12,000 - Federal SE tax (15.3% of 92.35%): ~$1,697 - Federal income tax on side income: ~$2,640 (22% bracket) - Kentucky state tax (4%): ~$480 - Louisville occupational tax (2.2%): ~$264 - **Total additional tax: ~$5,081**
Kentucky Tax Deadlines 2025
Kentucky estimated tax deadlines: - **Q1**: April 15, 2025 - **Q2**: June 16, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026
Use Kentucky Form 740-ES for state estimated tax payments. Local taxes may require separate filings.
Common Deductions for Kentucky Freelancers
Common deductions for Kentucky freelancers include: - Home office expenses - Business mileage (67 cents/mile for 2025) - Equipment and software - Professional services - Kentucky starts with federal AGI, so Schedule C deductions reduce state taxes
Kentucky Side Hustle Tax FAQ
What is Kentucky's tax rate on side hustle income?
Kentucky has a flat 4% income tax rate on all taxable income. Louisville and Lexington add local occupational taxes of 2.2-2.25%.
Does Louisville tax freelance income?
Yes, Louisville has a 2.2% occupational license fee that applies to net profits from self-employment, in addition to the state 4% rate.
How does Kentucky compare to neighboring states?
Kentucky's 4% rate is lower than Ohio (3.125% + local), similar to Indiana (3.0% + county), and higher than Tennessee (0%).
Related State Calculators
Compare Kentucky's 4% rate with these other states popular with freelancers and gig workers.
Return to main calculator to compare all 50 states
Side Hustle Calculators by State
All 50 states plus DC available. Return to main calculator or select a state above.
Ready to calculate your taxes?
This calculator provides estimates only. For personalized advice, consult a qualified tax professional.
Calculate My Kentucky Taxes ↑