If you lived or worked in Kentucky during 2016, understanding how to file your Kentucky tax return for 2016 is still important—even if the original deadline has passed. This guide is designed for individuals, sole proprietors, and small business owners who must file an amended return, resolve past tax obligations, or catch up on missed filings. Whether you had W-2 wages, self-employment income, or operated a small business, this article walks you through everything step by step.
Even though the due date for 2016 Kentucky individual income tax returns was April 18, 2017, many taxpayers still have valid reasons to complete a late filing. You might be correcting an error, claiming a missed credit, or responding to a state notice. Filing now can help avoid additional penalties and interest, and sometimes, may even lead to a refund. Understanding which tax forms to use, what deductions apply, and how to calculate your state tax correctly is essential.
This article breaks down the filing process—from identifying if you need to file to choosing the correct federal forms, calculating income and deductions, and submitting payment. We also explain how to file by mail or electronically, track a refund, and address common questions for sole proprietors and small business owners. Even if the tax year has long passed, the steps to file your 2016 Kentucky return remain accessible, and this guide will help you complete them with confidence.
Not all Kentucky residents were required to file a 2016 individual income tax return, but many were—especially those with earned income, self-employment income, or other taxable income sources. If you lived or worked in Kentucky during 2016, here’s how to determine whether you were obligated to file.
You were required to file a Kentucky tax return for 2016 if both of the following conditions applied:
Income thresholds by family size:
Adjusted gross income thresholds by filing status:
If you were a sole proprietor or self-employed and your gross receipts exceeded the threshold for your family size, you were required to file a tax return in Kentucky—even if your adjusted gross income was below the normal filing level.
You were also required to file if you earned Kentucky-sourced income during any portion of 2016 as a nonresident or part-year resident. In these cases, you needed to file Form 740-NP, reporting only the income earned while living in or earning income from Kentucky sources.
Filing your 2016 Kentucky individual income tax return required staying informed about key state-level changes, primarily if you operated a business or relied on federal deductions. Whether you were self-employed, part of a partnership, or running a small LLC, knowing what applied that year could affect how you filled out your forms or calculated your tax liability.
Kentucky adjusted its income thresholds for the Family Size Tax Credit in 2016. These changes helped lower-income taxpayers reduce their state income tax, especially those in sole proprietorships or part-time work. Eligibility depended on the number of dependents and total household income. If you qualified, you could claim this credit directly on your return.
For 2016, Kentucky set the standard deduction at $2,460. This amount applies to all individual filers unless you itemized deductions using a Schedule A. Strong recordkeeping of deductible expenses was required if you itemized, especially for Schedule C filers who reported business-related costs.
The Energy Efficiency Tax Credit expired in 2016, but carry-forward amounts from 2015 could still be used. Meanwhile, Kentucky added new refund contribution options, allowing taxpayers to direct a portion of their refund to causes like Special Olympics Kentucky or the Pediatric Cancer Research Trust Fund.
Kentucky began requesting driver’s licenses or state-issued ID numbers to reduce tax fraud. This matched similar steps the IRS took, updating its procedures for processing federal income tax returns in coordination with state agencies.
Note: These changes applied regardless of filing method—whether you mailed forms, filed electronically, or used professional tax software. Before filing for official updates and downloadable schedules, visit the IRS website or revenue.ky.gov.
Filing your 2016 Kentucky tax return requires using the correct forms based on your income, residency status, and business structure. Whether you filed as an individual, sole proprietor, or business owner, selecting the proper documents ensured you met your tax obligations accurately.
If you were a full-time or part-time Kentucky resident in 2016, you likely used one of the following forms:
If you moved into or out of Kentucky in 2016, you must file Form 740-NP and properly transfer your income details for the time you lived there.
Depending on your income and deductions, you may need to complete additional Kentucky-specific schedules:
If you owned a business in 2016, you may have been responsible for both personal and business taxes, depending on your structure:
Note: Business returns are generally due by the 15th day of the fourth month after your tax year ends. For most calendar-year filers, that means April 15. The deadline shifts to the next business day if the due date falls on a holiday or weekend. For example, if April 15 lands on a Saturday, the return is due Monday.
Visit the Kentucky Department of Revenue website for official tax forms and instructions. It’s essential to download the correct version for the 2016 tax year and confirm that you’re using the most updated instructions for each form.
Filing your 2016 Kentucky tax return requires carefully reviewing your income, deductions, and credit eligibility. Whether you’re filing as an employee or one of many small business owners, these six steps will help you prepare and submit your individual income tax return accurately and on time.
Kentucky offers four filing statuses. Choosing the right one impacts your standard deduction, credit eligibility, and overall tax bill:
This step determines how your return is calculated and which forms and credits may apply.
Start with your completed federal income tax return—usually Form 1040, 1040A, or 1040EZ. Kentucky uses your federal adjusted gross income (AGI) as the starting point.
Next, complete Schedule M to apply Kentucky-specific adjustments:
These adjustments allow your return to reflect Kentucky’s tax rules, not just federal law.
You must choose between taking the standard deduction and itemizing your deductions. For the 2016 tax year, the standard deduction was $2,460.
Choosing the appropriate deduction method can significantly affect your taxable income and refund amount.
You'll arrive at your taxable income after calculating your Kentucky adjusted gross income and applying your deductions. Use the 2016 tax rate schedule for Kentucky to compute your tax:
This structure applies to employees, retirees, and sole proprietors who report business profits on Schedule C attached to their federal return.
Tax credits can reduce your Kentucky tax liability. For 2016, several options were available:
To claim these credits, complete the required Kentucky schedules and maintain documentation for all qualifying expenses.
Once you’ve applied all applicable tax credits, you can calculate whether you owe additional tax or are due a refund:
Note: If your return was late, interest and penalties may have accrued in the third month after the filing deadline (typically April). Returns are considered on time if filed by the due date or on the next business day if the deadline falls on a weekend or holiday.
If you owned a small business in 2016—as a sole proprietor, LLC owner, or partner—you had additional filing responsibilities beyond the standard individual return. Kentucky requires specific forms to report your business income and calculate taxes correctly.
Sole proprietors must complete Schedule C (Form 1040) to report business income and expenses. The net amount from Schedule C had to be transferred to Line 12 of Form 740. Supporting documents like receipts, mileage logs, and invoices should be kept for accurate recordkeeping.
If your business were a single-member LLC, you would have to file Form 725 and pay the Limited Liability Entity Tax (LLET). The minimum annual LLET payment was $175, regardless of profit.
Many small business owners make avoidable mistakes during tax season:
Always review the Kentucky Department of Revenue website for guidance to avoid these issues.
You had two main options when filing your 2016 Kentucky tax return: electronic filing (e-file) or paper filing. Each method had its requirements and benefits. Choosing the right option for your situation helped ensure your return was accurate and processed without delays.
Most individuals and small business owners benefited from using Kentucky’s approved federal/state e-file system. This method allowed you to file your federal forms and Kentucky return simultaneously using commercial tax software or a professional preparer.
Paper filing remained an option if you preferred to complete your return manually or were not eligible for electronic filing.
To file by mail, you needed to:
Mail your return to the correct address provided by the Kentucky Department of Revenue, which varies depending on whether you are sending a payment or requesting a refund.
If the filing deadline (typically in January or April) fell on a weekend or holiday, your return was considered on time if it was postmarked by the next business day. To confirm mailing addresses and find official form links, visit revenue.ky.gov.
If you owed taxes in 2016, Kentucky provided several secure payment options to help you meet your obligations. These included electronic methods, traditional mail, and credit card payments.
When filing electronically, you could pay your balance using Electronic Funds Withdrawal (EFW). This method allowed automatic withdrawal from your bank account on your selected date.
Alternatively, Kentucky accepts payments by credit or debit card, which can be submitted online or by phone. These transactions included a small convenience fee.
If you preferred to pay by mail, you could send a check or money order made payable to the Kentucky State Treasurer. Payments had to include your full name, Social Security number, and the note “KY Income Tax—2016” on the memo line.
Taxpayers who filed electronically but mailed a payment must include Form 740-V, the payment voucher.
Even if you filed for an extension, payment was still due by the original deadline in April 2017. If the due date fell on a weekend or holiday, payment was considered on time if postmarked by the next business day.
Late payments were subject to penalties and interest. Paying as much as possible early, even partial payments in January, helped reduce the total balance due.
After filing your 2016 Kentucky tax return, you could track your refund status or check any remaining balance using two main options: the Kentucky Department of Revenue’s online tool or the automated phone system. Both methods required your Social Security number and the exact whole-dollar amount of your expected refund. These tools allowed you to confirm when your return was received, your refund was approved, and payment was issued.
Processing times varied based on how the return was filed. Electronically filed returns were typically processed within 2 to 3 weeks, while paper returns could take 8 to 10 weeks. Amended returns might take up to 12 weeks. Delays were possible if your return was incomplete, selected for review, or submitted around a holiday or early January business day. To avoid delays, double-check for missing information and keep a complete copy of your return. Filing accurately and on time gives you faster access to your refund and account updates.
Before sending your 2016 Kentucky tax return, review this quick checklist to avoid delays or errors:
You should still file your 2016 return as soon as possible. Filing late may result in penalties and interest, but it also stops further accrual. If you are due a refund, there's no penalty for filing late, but you must file within three years of the original deadline to claim it.
Most tax software no longer supports electronic filing for 2016 returns. However, you can still complete your return using printable forms and submit it by mail. Follow the 2016 instructions and use the correct mailing address based on whether you owe tax or expect a refund.
To amend your return, complete Form 740-X and submit it by mail. You can amend within four years of the original due date. Include any updated forms, schedules, or documentation that support your correction. Interest and penalties will apply from the original due date if you owe additional tax.
Taxpayers often overlook the Family Size Tax Credit, the Education Tuition Tax Credit, and partial pension exclusions. Sole proprietors may forget to claim allowable business expenses or credits like the LLET credit. Review all available credits carefully and attach the correct Kentucky schedules when filing.
Suppose you were a part-year resident or nonresident earning Kentucky income; file Form 740-NP. This form allows you to report only the income earned as a resident or from Kentucky sources. Attach supporting federal forms and calculate any prorated deductions or credits.
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