How does Kentucky tax capital gains?

Kentucky has no special capital-gains rate. All capital gains — short-term or long-term — are taxed as ordinary income at Kentucky's flat 4.0% individual income-tax rate for 2024. There is no preferential treatment or exclusion at the state level.

What are the 2024 federal long-term capital gains brackets?

For single filers in 2024, long-term gains are taxed at 0% up to $47,025 of taxable income, 15% from there to $518,900, and 20% above that. Joint-filer thresholds are higher: 0% to $94,050 and 15% to $583,750. Your gain stacks on top of your other income to find the rate.

How are short-term gains taxed?

Short-term gains (on assets held one year or less) are taxed as ordinary income at both the federal and Kentucky levels. Federally they use your regular marginal bracket; in Kentucky they are taxed at the flat 4.0% rate, the same as long-term gains.

Is there a separate Net Investment Income Tax?

Yes, at the federal level. Higher earners may owe an additional 3.8% Net Investment Income Tax (NIIT) on investment income above $200,000 (single) or $250,000 (joint). This calculator can include the 3.8% NIIT as an option but it does not apply the income thresholds for you.

Does Kentucky give any capital-gains exemption?

No general one. Kentucky follows the federal definition of taxable gain (including the federal home-sale exclusion of $250,000 single / $500,000 joint, since that reduces the gain before it reaches the state return), but it does not add any state-only capital-gains exclusion or lower rate.

Kentucky Capital Gains Tax Calculator

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Kentucky taxes capital gains as ordinary income at its flat 4.0 percent rate, while the federal tax depends on how long you held the asset. This calculator applies the correct federal rate plus Kentucky’s 4.0 percent and shows your total tax and after-tax proceeds.

How it works

For long-term gains (held more than one year) the federal rate is 0, 15, or 20 percent depending on where your taxable income — including the gain — falls in the brackets. For short-term gains (one year or less) the federal tax equals your ordinary marginal rate. Kentucky adds its flat 4.0 percent on top in every case:

federal tax = gain × federal rate (LTCG bracket or your ordinary rate)
NIIT        = gain × 3.8%   (optional, high earners only)
KY tax      = gain × 0.04
total       = federal tax + NIIT + KY tax

For long-term gains the tool finds your federal bracket using your taxable income plus the gain. Because Kentucky has a flat structure, the state portion is always exactly 4.0 percent of the gain.

Example

A single filer with 100,000 dollars of taxable income realizes a 20,000 dollar long-term gain. The gain sits in the 15 percent federal bracket, so federal tax is 3,000 dollars and Kentucky tax is 20,000 × 0.04 = 800 dollars, for a combined 3,800 dollars — leaving 16,200 dollars after tax.

Notes

Estimate only, not tax advice. Long-term federal brackets use 2024 single/joint thresholds; the gain stacks on your other income to set the rate. Short-term gains use the ordinary rate you select. The optional 3.8 percent NIIT is applied to the full gain when enabled and does not check the income thresholds. State tax is Kentucky’s flat 4.0 percent. Confirm with IRS Schedule D and Kentucky Form 740 at revenue.ky.gov.