{"place":"Lexington, KY","kind":"city","asOf":"2026-10-07","url":"https://gigaverse.ai/local/lexington-ky","state":{"code":"KY","name":"Kentucky","slug":"kentucky","incomeTax":{"type":"flat","flatRate2026":3.5,"lowestRate2026":null,"topRate2026":null,"topRateStartsSingle":null,"notes":"The rate fell from 4.0% to 3.5% for tax years beginning on or after Jan. 1, 2026 under HB 1 (2025 Regular Session): https://apps.legislature.ky.gov/record/25rs/hb1.html. The 2026 standard deduction is $3,360.","source":"https://revenue.ky.gov/Forms/2026%20Withholding%20Formula.pdf"},"estimatedTax":{"form":"740-ES","rule":"Generally required if you expect to owe at least $500 for 2026 after withholding and refundable credits, and those will cover less than the smaller of 90% of 2026 tax or 100% of 2025 tax. Use 110% instead of 100% if 2025 AGI was over $150,000.","schedule":"Same dates as federal (April 15, June 15, and September 15, 2026, and January 15, 2027).","source":"https://revenue.ky.gov/Forms/740-ES%20Instructions%20(2025).pdf"},"minimumWage2026":{"standard":7.25,"tippedCash":2.13,"tipCreditAllowed":true,"notes":"Kentucky's state rate matches the federal $7.25. Employers may pay $2.13 an hour to employees who customarily receive more than $30 a month in tips, as long as wages plus tips reach the minimum wage.","source":"https://elc.ky.gov/workplace-standards/Documents/KY%20Wage%20and%20Hour%20Poster%20English.pdf"},"soleProprietorTaxes":[{"name":"Kentucky limited liability entity tax (LLET)","summary":"Applies to every corporation and limited liability pass-through entity doing business in Kentucky, including single-member LLCs owned by an individual, which file Form 725 even if disregarded federally. A sole proprietor without an LLC is not a limited liability entity. The tax is the lesser of 0.095% of Kentucky gross receipts or 0.75% of Kentucky gross profits (phased in between $3 million and $6 million), with a $175 minimum. Entities with $3 million or less in gross receipts or gross profits pay only the $175. (Source is the 2023 Form 725 instructions, the latest at this URL; rates are set by KRS 141.0401.)","source":"https://revenue.ky.gov/Forms/Form%20725%20Instructions.pdf"}],"contractorLaws":[{"name":"Marketplace contractor law (KRS 336.137)","summary":"App-based marketplace contractors are not employees under state or local law if they agree in writing that they are independent contractors and bear their own expenses. The platform also can't set required hours, bar other platforms or other work, or supply tools. Freight and parcel delivery are excluded.","source":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=47492"}],"notes":"Many Kentucky cities and counties levy local occupational license taxes. As of Oct. 2025, 89 cities and 70 counties taxed net profits and 39 cities taxed gross receipts (KACo/KLC presentation to the Interim Joint Committee on Local Government: https://apps.legislature.ky.gov/CommitteeDocuments/26/35676/Oct%2021%20202%20KACo_KLC%20Occupational%20Taxes%20Presentation.pdf)."},"stateRetirementProgram":{"state":"Kentucky","code":"KY","programName":null,"status":"none","employerMandate":null,"mandateMin":null,"keyDates":null,"covers1099":null,"selfEnroll":"n/a","sourceUrl":"https://cri.georgetown.edu/states","note":"No enacted state-facilitated program.","lastVerified":"2026-09-09"},"city":{"slug":"lexington-ky","name":"Lexington","stateCode":"KY","county":"Fayette County (Lexington-Fayette Urban County Government)","population":329751,"populationYear":2025,"localIncomeTax":{"applies":true,"name":"LFUCG Occupational License Fee (2.25%) plus Fayette County Board of Education Occupational License Tax for Schools (0.5%)","residentRate":0.0275,"nonresidentRate":0.0225,"selfEmployed":"Sole proprietors and other self-employed people pay the 2.25% LFUCG fee on net profits from business in Fayette County, file an annual Net Profits License Fee Return (Form 228) and make quarterly estimated payments (Form 228 ENP). Fayette County Public Schools also taxes the net profits of all businesses from activities in Fayette County at 0.5%, so self-employed profits earned in the county face about 2.75% in total; on wages, the 0.5% school tax applies only to county residents.","effective":"LFUCG 2.25% is the rate posted with its 2026 forms; FCPS 0.5% is the rate currently posted by the school district's tax office (see notes about a voided 2025 increase).","source":"https://www.lexingtonky.gov/working/business-licensing-taxes/occupational-license-fee-rates-current-forms"},"localBusinessTaxes":[{"name":"LFUCG Initial and Minimum Occupational License Fee","summary":"Every person and business engaged in business in Lexington-Fayette County must get an initial occupational license ($100, due at registration) and pay a $100 annual minimum license fee with the Net Profits License Fee Return. Individuals and sole proprietors who report gross receipts of $4,400 or less for a year skip the minimum fee for that year and the next, but still must file the return.","source":"https://www.lexingtonky.gov/working/business-licensing-taxes/occupational-license-fee-minimum-license-filing-requirements"}],"businessLicense":{"required":true,"summary":"Yes. LFUCG requires every person and business entity engaged in any business in Lexington-Fayette County, including sole proprietors, to obtain an initial occupational license (Form 228 IP) before starting.","source":"https://www.lexingtonky.gov/working/business-licensing-taxes/occupational-license-fee-minimum-license-filing-requirements"},"gigLaws":[],"notes":"School tax source: https://www.fcps.net/community/tax-collection-office (0.5% on residents' compensation for work in Fayette County and on net profits from activities in Fayette County). In May 2025 the school board voted to raise the school tax to 0.75%, but Kentucky Attorney General opinion OAG 25-07 found that vote void for lack of notice (https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG%2025-07.pdf), and the board then decided not to raise the tax for now (CivicLex, secondary source: https://civiclex.org/news). The FCPS tax office page still lists 0.5%; confirm with FCPS (859-422-0377). LFUCG publishes a Form 1099-LX transmittal for businesses reporting payments to 1099 contractors. No local gig-worker or freelancer pay ordinances were found. Population: Census Bureau Vintage 2025 estimate for July 1, 2025 (https://www2.census.gov/programs-surveys/popest/datasets/2020-2025/cities/totals/sub-est2025.csv)."},"guides":[{"audience":"consultants","url":"https://gigaverse.ai/local/lexington-ky/consultants"},{"audience":"freelancers","url":"https://gigaverse.ai/local/lexington-ky/freelancers"},{"audience":"content-creators","url":"https://gigaverse.ai/local/lexington-ky/content-creators"},{"audience":"entrepreneurs","url":"https://gigaverse.ai/local/lexington-ky/entrepreneurs"},{"audience":"gig-workers","url":"https://gigaverse.ai/local/lexington-ky/gig-workers"},{"audience":"tipped-workers","url":"https://gigaverse.ai/local/lexington-ky/tipped-workers"},{"audience":"tradespeople","url":"https://gigaverse.ai/local/lexington-ky/tradespeople"}],"disclaimer":"Educational information for 2026, not tax, legal or investment advice. Sources are cited per fact."}