Before you start

An SSN or ITIN
Form W-4 with your employer for federal withholding
Kentucky Form K-4 with your employer for state withholding
Your residency status within Jefferson County, which sets the local rate
Records of foreign income and foreign financial accounts

Step-by-step

1
Complete the federal W-4 and the Kentucky K-4 on day one
Kentucky's flat rate needs no allowance calculation but the K-4 is where exemptions and any withholding adjustments are declared. The local occupational tax is withheld by the employer automatically on wages earned in Jefferson County.
Via employerWho: YouFirst week of employment
2
Check the state rate for the year you are actually filing
Kentucky moved to a flat tax and then legislated a trigger mechanism that steps the rate down when revenue conditions are met. It has gone 5% to 4.5% to 4%, and to 3.5% from 1 January 2026 under House Bill 1 of the 2025 session. Official pages have lagged the changes, so verify the rate for your filing year with the Department of Revenue rather than trusting a static figure in any article.
OnlineWho: You
3
Add the occupational licence tax to any salary comparison
Wages earned in Jefferson County carry a local occupational licence tax withheld at source. It is structured as a Metro Government share, a TARC share and a school board share, with the school board portion applying to residents — so a Jefferson County resident's combined rate is higher than a non-resident commuter's. Get the current rates from the Louisville Metro Revenue Commission before modelling an offer.
OnlineWho: You
4
Check whether your home rule city adds its own
Around 80 small cities inside Jefferson County kept their own governments and may impose their own occupational licence fee as well as their own property tax, subject to statutory limits by city tier. If your address is in Shively, St Matthews, Jeffersontown or one of the others, check with that city rather than assuming Metro's rate is the whole story.
OnlineWho: You
5
Determine your US tax residency
The substantial presence test counts weighted days across three years to decide whether the US taxes your worldwide income or only US-source income. Your visa category does not decide this.
OnlineWho: You
6
Check for an applicable tax treaty
The US has treaties with around 70 countries that can reduce or exempt tax on particular income. Kentucky's return starts from federal adjusted gross income, so a federal treaty position generally flows through to the state computation — but the local occupational tax is a separate levy on compensation with its own rules, so do not assume a treaty reaches it.
OnlineWho: You
7
If you live in Indiana and work here, expect two state returns
Southern Indiana is a short drive across the river and a common choice for cheaper housing. Living in Indiana while earning in Kentucky brings a second state's income tax return into your life, plus Indiana county income tax, and the local occupational licence tax still applies to wages earned in Jefferson County. Get advice before treating the rent saving as a net saving.
OnlineWho: You
8
File federal, Kentucky and — where required — a local return
The tax year is the calendar year and the federal deadline is normally 15 April. The occupational licence tax is normally satisfied by employer withholding for an employee, but anyone with self-employment or net profits earned in Jefferson County files with the Revenue Commission directly.
OnlineWho: YouBy 15 April annually
9
File an FBAR if foreign accounts exceed $10,000
Aggregate foreign account balances over $10,000 at any point in the year trigger a FinCEN filing, separate from your tax return and with its own penalties.
OnlineWho: You

Documents you’ll need

Form W-2 from each employer, issued by 31 January
Form 1099s for freelance, interest and investment income
Forms W-4 and Kentucky K-4 filed with your employer
Passport and travel history for the substantial presence day count
Foreign account statements for FBAR reporting

Things most newcomers don’t know

The headline state rate is a moving target, and the official pages lag it.

Kentucky wrote a revenue-triggered reduction mechanism into law, so the flat rate has changed in most recent sessions — most recently to 3.5% from 1 January 2026 under House Bill 1 of the 2025 session. Department of Revenue pages and secondary articles have both been observed carrying an out-of-date figure. Check the rate for the specific tax year rather than the one you remember.

Source: Kentucky Department of Revenue

Three governments split the tax coming off your wages, and one of them is the school board.

The Louisville Metro occupational licence tax is not a single city levy: it funds Metro Government, the Transit Authority of River City and the school board out of one withholding line. The school board portion applies to residents, which is why a Jefferson County resident and a commuter working at the same desk take home different amounts. Anyone comparing offers across the county line needs to compare addresses, not employers.

Source: Louisville Metro Revenue Commission

A home rule city can add a second local layer.

The 2003 merger left roughly 80 small cities intact inside Jefferson County, and they levy their own property taxes and may impose their own occupational licence fees, with what they can charge constrained by their population tier. An address in one of them is a different tax position from an address in Metro's unincorporated balance, and no online estimator will tell you.

Source: Jefferson County League of Cities

Kentucky's sales tax is genuinely simple, which is rare.

6% statewide with no county or city add-on, unlike Florida's county surtaxes or Pennsylvania's Allegheny and Philadelphia surcharges. It does mean that a service which becomes taxable under a legislative expansion becomes taxable everywhere at once — the base has broadened in recent sessions, so a service you expected to be untaxed may not be.

Source: Kentucky Department of Revenue

Your visa does not determine your tax residency.

The substantial presence test — a weighted day count across three years — decides whether the US taxes your worldwide income. Someone on a temporary visa can be a US tax resident; someone on a long visa can fail the test. Do the count rather than assuming.

Source: IRS — substantial presence test

Common mistakes to avoid

Using a Kentucky income tax rate from an older article — it has changed in most recent sessions.
Comparing a Louisville salary to another city's without subtracting the occupational licence tax.
Assuming Metro's rate is the whole local story when your address is inside a home rule city.
Moving to southern Indiana for the rent and discovering two state returns plus a county tax.
Assuming a federal tax treaty position reaches the local occupational licence tax.
Missing the FBAR because a home-country account did not feel 'foreign'.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.