Live in Kentucky, work in Tennessee
Your work state has no tax on wages, so you pay only your home state.
Official tax guidance for both states
Check withholding, filing requirements and current forms with each state's tax agency.
- Kentucky: Kentucky Department of Revenue (opens in new tab)
- Tennessee: Tennessee Department of Revenue (opens in new tab)
Agency directory checked 2026-10-01 against the IRS state-government directory. This verifies the agency links, not an individual tax result. Use forms for the year you are filing.
Before you use this estimate
This model assumes a full-year resident of Kentucky, ordinary employee wages and all workdays physically in Tennessee. Check exemption eligibility before treating a work-state amount of $0 as your own result. Withholding is a prepayment, not final tax liability. Other income, a move during the year, remote work and separate local taxes or credits can change the result.
State income tax: $3,382 a year
Modeled annual state income tax for living in Kentucky and working in Tennessee: about $3,382 on $100,000 of wages.
Your work state has no tax on wages, so you pay only your home state.
Tax guide and official sources: live in Kentucky, work in Tennessee
Official agency starting points: Kentucky tax agency (opens in new tab) · Tennessee tax agency (opens in new tab). These directory links identify the selected states' agencies, not your filing obligations. Check their individual-tax guidance and forms for the year you are filing.
This is the usual filing pattern, not a determination that you must file. Filing thresholds, age or dependent status, other income and withholding refunds can change which returns you need.
How this $100,000 estimate adds up
These steps follow the selected home, work state, salary and filing status. They reconcile the model's annual liability, not the amounts withheld from your paycheck.
| Step | Tennessee work state | Kentucky home state |
|---|---|---|
| Tax before the modeled other-state credit | $0 | $3,382 |
| Modeled other-state credit subtracted | $0 | $0 |
| Tax after that credit | $0 | $3,382 |
Total: $0 + $3,382 = $3,382 a year. Amounts are rounded for display. Work-state wage exemptions, when applicable, are already reflected in the first row; they are not an other-state credit.
No other-state credit is subtracted in this selected scenario. Included county components stay in these amounts; excluded local taxes and credits stay excluded. Federal income tax, payroll programs and refund eligibility are outside this reconciliation.
State tax at different salaries
| Wages | To TN | To KY | Modeled total | If you worked in KY |
|---|---|---|---|---|
| $50,000 | $0 | $1,632 | $1,632 | $1,632 |
| $75,000 | $0 | $2,507 | $2,507 | $2,507 |
| $100,000 | $0 | $3,382 | $3,382 | $3,382 |
| $150,000 | $0 | $5,132 | $5,132 | $5,132 |
| $250,000 | $0 | $8,632 | $8,632 | $8,632 |
Single filer, all wages earned in Tennessee, 2026 state tax rules, standard deductions. Local income taxes not included.
From paycheck withholding to your returns
- Withholding: Ask Tennessee payroll whether Kentucky resident withholding is available. If not, check Kentucky estimated-payment requirements. Tennessee does not withhold individual income tax, but that does not remove your Kentucky resident liability.
- Returns: A full-year Kentucky resident files Form 740 if required, including wages earned in Tennessee. There is no Tennessee individual wage-tax return. Part-year residence requires a different filing determination.
- Credit or refund: No other-state wage-tax credit is available for Tennessee wages when no Tennessee individual income tax is owed. Kentucky taxes the resident wages; federal withholding does not settle Kentucky liability.
Worked example: $100,000 of wages
Single filer, full-year resident of Kentucky, all work performed in Tennessee, no other income, standard deductions and modeled personal exemptions. Tennessee does not tax these employee wages in this scenario. Pay a modeled $3,382 to Kentucky and $0 to Tennessee, total $3,382. No other-state income-tax credit is subtracted.
The 2026 Kentucky planning calculation uses the official 3.5% rate and $3,360 standard deduction: ($100,000 − $3,360) × 3.5% = $3,382.40. This is annual state liability before special credits, not a payroll withholding figure or a local occupational-tax estimate.
Annual liability, not paycheck withholding or a refund estimate. Federal tax, payroll programs, other local taxes, special credits and part-year residency are excluded. Local income taxes not included.
Remote-work and local exceptions
The example assumes full-year Kentucky residence and W-2 wages only. A hybrid schedule does not by itself remove Kentucky resident tax. Kentucky city or county occupational taxes depend on their own rules and are excluded, including any local obligations that differ from state tax.
Official forms and instructions
- Kentucky resident Form 740 and income earned outside Kentucky (opens in new tab)
- Kentucky employer withholding and official 2026 3.5% rate (opens in new tab)
- Kentucky official 2026 $3,360 standard deduction (opens in new tab)
- Tennessee Department of Revenue: no individual income-tax withholding (opens in new tab)
Source audit 2026-10-14. Use the return and instructions for the year you are filing; a current-forms link may still show a prior-year return. Official sources checked; not independently reviewed.
What to do
- Keep a record of the days you work in each state, especially if you sometimes work from home.
Local income taxes
- Kentucky: City/county occupational license taxes are levied by work location on residents and nonresidents alike (e.g., Louisville Metro ~2.2% combined, Lexington 2.25%), and are NOT covered by KY's state reciprocity agreements - OH/IN commuters into Louisville/Covington still pay them.
Frequently asked questions
Do I pay Tennessee income tax if I live in Kentucky?
No. Your work state has no tax on wages, so you pay only your home state.
Do I have to file taxes in both Kentucky and Tennessee?
A full-year Kentucky resident files Form 740 if required, including wages earned in Tennessee. There is no Tennessee individual wage-tax return. Part-year residence requires a different filing determination.
Will I be taxed twice?
No. Tennessee doesn't tax these wages at the state level; the modeled Kentucky tax is about $3,382 on $100,000. Local taxes need a separate check.
Related
- Live in Tennessee, work in Kentucky
- Moving from Kentucky to Tennessee
- Moving from Tennessee to Kentucky
- Live in Kentucky, work in Illinois
- Live in Kentucky, work in Indiana
- Live in Kentucky, work in Missouri
- Live in Kentucky, work in Ohio
- Live in Kentucky, work in Virginia
- Live in Kentucky, work in West Virginia
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.