Filing a Kentucky Tax Return for 2018 When You’ve Moved Out of State

Even if you moved away, you may still need to file a Kentucky tax return for 2018. Kentucky taxes income earned while you were a resident, regardless of where you live. It also taxes certain Kentucky-source income earned after you relocated. Ignoring this obligation could lead to penalties and interest on unpaid state taxes.

You must file if you had Kentucky wages, business income, or rental earnings in 2018. Part-year residents report income earned during residency and from Kentucky sources after moving. Nonresidents, such as those working in in-state contract work, must report income directly connected to Kentucky. Each situation depends on your residency status and income source for that tax year.

This guide will clarify residency rules and filing requirements for former Kentucky residents. You will learn which forms apply to your circumstances. It will outline the documentation you should gather before starting your return. Finally, it will provide steps to ensure accurate reporting and compliance with Kentucky law.

‍

Understanding Kentucky Tax Obligations After Moving

If you moved out of Kentucky in 2018, you may still have filing responsibilities to the Commonwealth. The Kentucky Department of Revenue applies specific rules for individual income tax depending on your residency status, where your income was earned, and whether it’s subject to state income tax returns in Kentucky. Here’s a clear breakdown:

• Full-Year Resident Rules: If you lived in Kentucky for the entire tax year 2018, you are considered a full-year resident. Regardless of where it came from, all income earned must be reported on your Kentucky tax return for 2018 as you report on your federal income tax return. Even if you moved late in the year, if your records show that you maintained a permanent Kentucky home all year, you must file using Form 740 and pay any tax due.
  
  
• Part-Year Residency Requirements: If you moved into or out of Kentucky during 2018, you are a part-year resident. In this case, you must use Kentucky tax forms like Form 740-NP to report only the income you earned while a Kentucky resident, plus any Kentucky-source income after moving. Your family size when you lived in Kentucky can affect credits and tax relief amounts.
  
  
• Nonresident Filing Obligations: If you lived outside Kentucky for the entire year but earned income from Kentucky sources—such as wages, business operations, property, or limited liability entity tax income—you must file a nonresident return. This applies whether you received payment in cash, check, or another form of compensation. The IRS classification of your income on your federal return often determines whether Kentucky can subject it to tax.
  
  
• Treatment of Income Before and After Moving: Kentucky separates income based on where and when it was earned. Income earned before you left Kentucky is taxed in full by the Commonwealth. Income earned after moving is taxed only if it is Kentucky-sourced. For example, if you operated a business in Kentucky but managed it remotely after relocating, that portion may still be subject to Kentucky income tax. If you had taxes paid to another state on the same income, you may apply for a credit to exclude it from double taxation.
  
  
• Special Considerations for Businesses and LLET: Businesses and certain entities may also be required to file a limited liability entity tax return, even if the owners have moved. This includes filing the proper forms, keeping records, and responding to any request for additional information from the Department of Revenue. Sometimes, collections or bills may still be mailed to a former Kentucky address, so it is essential to contact the department to update your details.

No matter your status—full-year resident, part-year resident, or nonresident—it’s essential to understand how Kentucky taxes apply to your situation, keep accurate records, and file promptly. If needed, you can request an extension or seek guidance from the Internal Revenue Service and the Kentucky Department of Revenue to ensure your return is filed correctly and you receive any benefit for which you may be eligible.

‍

Determining Your Residency Status for 2018

Determining your residency status for the Kentucky tax return 2018 is essential because it dictates which Kentucky tax forms you must use, how much income you report, and whether you qualify for specific tax relief or credits. The Kentucky Department of Revenue uses clear definitions for full-year residents, part-year residents, and nonresidents—and these rules affect both individual income tax and state income tax returns.

• Full-Year Resident: A full-year resident is an individual who lived in Kentucky for the entire tax year and is subject to income tax on all income earned, regardless of where it was earned. This status applies if your permanent home was in the Commonwealth for the whole year, even if you temporarily worked or studied elsewhere. You will typically file using Form 740 and include all federal taxable income, mirroring much of your federal income tax return.
  
  
• Part-Year Resident: A part-year resident moved into or out of Kentucky in 2018. You must file Form 740-NP and report income earned while living in the state, plus any Kentucky-source income after moving. Moving dates can also impact your family size for certain credits and deductions—taxpayers may need to provide records such as a lease termination or property sale date to establish when their residency changed.
  
  
• Nonresident: A nonresident is an individual who lived outside Kentucky for the entire year but had income from a Kentucky source, such as wages from a business operating in the state, rental property, or distributions from a pass-through entity subject to limited liability entity tax. You should file using Form 740-NP or, in specific business cases, additional forms for LLET.
  
  
• Impact of Moving Dates on Family Size and Filing Obligations: The date you change residency can alter your family size count for tax purposes. For example, if your spouse or dependents stayed behind in Kentucky for part of the year, the effect on credits and deductions may require separate reporting for each portion. Always apply the correct allocation method to avoid overpaying taxes.
  
  
• Examples to Clarify Residency Status
  
  Example 1: You moved from Kentucky to Ohio in March 2018 but kept a rental property in KY. You are a part-year resident and must file for income earned before moving, plus report rental income as a nonresident.
  
  Example 2: You lived in Indiana all year but worked in Louisville for three months. You are a nonresident required to file a state income tax return on wages from that job.
  
  Example 3: You maintained your home in Kentucky but worked temporarily in another state; you remain a full-year resident and must report total income.

Knowing whether you are a full-year resident, part-year resident, or nonresident ensures you file the correct forms, pay the right amount of tax, and benefit from tax relief available under both Kentucky law and Internal Revenue Service rules. Getting this right can prevent bills, collections, and the need to request an extension or submit additional information later.

‍

Forms You’ll Need to File

When moving out of Kentucky but still needing to file a 2018 state return, choosing the proper form is critical to ensure you meet your tax obligations accurately. The Kentucky Department of Revenue provides different forms based on your residency status and type of income, and selecting the wrong one can delay processing or cause errors in tax calculation.

• Form 740-NP – Part-Year Residents and Nonresidents: This is the primary form for individuals who lived in Kentucky for part of the year or earned Kentucky-source income while living elsewhere. It allows you to allocate income between Kentucky and your new state, ensuring you’re only taxed on what’s attributable to Kentucky.
  
  
• Form 740 – Full-Year Kentucky Residents: If you lived in Kentucky for the entire tax year—even if you moved right after December 31, 2018—you’ll use Form 740. This form covers all income from every source, but you may be eligible for a credit if you also paid income tax to another state.
  
  
• Form 740-NPR – Nonresident Professional Athletes and Entertainers: This specialized form applies to nonresidents who earn income in Kentucky from sports or entertainment events. It streamlines reporting and withholds tax based on Kentucky earnings from those activities.
  
  
• Supporting Schedules for Out-of-State Movers: Depending on your deductions and credits, you may need to attach Schedule A (Itemized Deductions), Schedule M (Modifications to income), or Schedule RC (Credit for tax paid to another state). These schedules ensure the correct allocation of deductions and prevent double taxation.
  
  
• Limited Liability Entity Tax (LLET) Forms for Business Owners: If you owned or were a Kentucky LLC or other business entity member during part of 2018, you may need to file Form 720 or related LLET schedules. Even if you moved, Kentucky requires reporting business activity sourced to the state.

Filing with the correct Kentucky form keeps you compliant and helps you avoid paying more tax than necessary, primarily if you’ve split your year between states.

‍

Gathering the Right Documentation

When preparing to file your 2018 Kentucky tax return after moving out of state, the proper documentation will save you time, prevent errors, and ensure you claim every deduction or credit you’re entitled to. Here’s what you’ll need to gather and why each item matters.

• Employment Income Records: Collect all W-2 forms from employers and any 1099 forms for freelance, contract, or investment income that had Kentucky state tax withheld. These documents confirm your taxable income from Kentucky sources and provide the exact amounts withheld for state taxes.
  
  
• Proof of Your Move Date: Keep verifiable evidence of when you stopped being a Kentucky resident, such as a lease termination letter, closing documents for a home sale, or final utility bills at your Kentucky address. This helps determine your part-year residency status and ensures income is allocated correctly between states.
  
  
• Deduction and Credit Documentation: Maintain receipts, statements, or official records for expenses tied to deductions or credits you plan to claim. This could include education expenses, charitable contributions, or proof of taxes paid to another state. Having detailed records will support your claims if the Kentucky Department of Revenue requests verification.

Gathering this paperwork before you start your return will make the filing process smoother and reduce the likelihood of delays or disputes over your residency status and taxable income.

‍

Step-by-Step Filing Process for Former Kentucky Residents

If you moved out of Kentucky in 2018, filing your state return requires carefully separating income and deductions for the time you lived there and any Kentucky-sourced earnings afterward. Here’s how to approach each part of the process to stay compliant and avoid overpaying taxes.

Report Pre-Move Kentucky Resident Income

• Use your part-year resident return (Form 740-NP) to list all your income while living in Kentucky.
  
  
• Include wages, self-employment income, rental income from Kentucky properties, and other earnings received before your moving date.
  
  
• Ensure the income period aligns with proof of residency dates, such as lease agreements or utility bills.

Report Post-Move Kentucky-Source Income

• Even after leaving Kentucky, you must report income from Kentucky sources—such as wages from a Kentucky employer, rental income from property in the state, or business activity conducted in Kentucky—on the nonresident portion of your Form 740-NP.
  
  
• Use Schedule KNRC to detail this income so it is taxed only by Kentucky for the nonresident period.

Allocate Deductions and Credits Between States

• Divide deductions and credits based on the period you were a Kentucky resident and when you became a resident of your new state.
  
  
• Adjust family size and exemptions for each state’s portion of the year, as changes like marriage, divorce, or the birth of a child mid-year can alter your tax obligations.
  
  
• Review Kentucky’s rules for credits for taxes paid to another state to avoid double taxation.

Know the Filing Deadlines and Late Filing Rules

• The standard 2018 Kentucky return deadline was April 15, 2019, but extensions were available if requested by that date (extension applies to filing, not to paying taxes owed).
  
  
• Late filing or underpayment may result in penalties and interest, so file promptly, even if you cannot pay in full.
  
  
• If you missed the original deadline, file as soon as possible to limit accruing interest charges.

You can fulfill your obligations without paying more than necessary by accurately separating your pre- and post-move income, allocating deductions fairly, and meeting Kentucky’s filing rules.

‍

Handling State-to-State Tax Issues

When you move out of Kentucky but still have income connected to the state, navigating how Kentucky taxes interact with your new state’s rules is essential to avoid paying more than you should. Here’s how to approach the most common state-to-state tax considerations in this situation:

Reciprocal Agreements with Neighboring States

• Kentucky has reciprocal agreements with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, and Wisconsin.
  
  
• These agreements mean that if you live in one of these states but earn wages in Kentucky, you generally only pay income tax to your state of residence.
  
  
• To benefit, you must file a Form 42A809 (Certificate of Residency) with your Kentucky employer so they stop withholding KY tax.

Avoiding Double Taxation

• If you moved to a non-reciprocal state, you may owe taxes to Kentucky and your new state on the same income.
  
  
• The key is properly allocating income between the states based on when and where it was earned.
  
  
• Use Kentucky’s part-year or nonresident forms (such as Form 740-NP) to ensure you only pay KY tax on Kentucky-source income after your move.

Claiming Credits for Taxes Paid to Another State

• Kentucky offers a credit for tax paid to another state on income in KY and your new state.
  
  
• To claim this, you must provide proof—such as a copy of your other state’s tax return and evidence of payment.
  
  
• This credit is limited to the amount of Kentucky tax due on that income, so it may not cover all differences if your new state’s rates are higher.

Understanding how these rules work before you file can legally minimize your tax liability and prevent costly errors that lead to overpayment.

‍

FAQs

Do I still file if I earned no Kentucky income after moving?

If you were a Kentucky resident for part of 2018, you may still need to file a part-year resident return, even if you earned no Kentucky-source income after moving. Kentucky taxes all income earned while you were a resident. You generally don't need to file if you were a nonresident for the entire year and earned no Kentucky-source income. Check the Kentucky Department of Revenue guidelines to confirm your situation.

Which address should I use on my Kentucky tax return for 2018?

Use your current mailing address when you file, even outside Kentucky. This ensures the Department of Revenue can contact you about refunds, notices, or additional documentation requests. You will still indicate your previous Kentucky address and residency dates within the return to establish your residency status for 2018. Keep address records in case the state needs proof of your move date.

How do I file jointly if my spouse stays in Kentucky and our family size changes mid-year?

If you were married and your spouse remained in Kentucky, you can usually file jointly if it benefits you, even if your residency status changed mid-year. Your return will allocate income between Kentucky and your new state based on each spouse’s residency period and earnings. Family size changes (such as a new dependent) should be reflected for the part of the year they applied, as this affects deductions and credits.

Can I e-file from another state using Kentucky tax forms?

You can e-file a Kentucky return from anywhere, using approved e-filing software or the Kentucky Department of Revenue’s online system. Select the correct tax year (2018) in the software. If filing an amended or paper return, you can mail it from out of state to the address listed in the Kentucky tax instructions. Keep a copy of your submission confirmation or certified mail receipt.

How do I handle partial-year deductions, tax relief, and credits?

For part-year residents, deductions and credits are generally prorated based on the portion of the year you were a Kentucky resident or earned Kentucky-source income. This applies to standard/itemized deductions, personal exemptions, and certain tax credits. Some credits—such as for taxes paid to another state—require documentation to prevent double taxation. Review Schedule A and credit instructions in Form 740-NP to ensure correct allocation and to maintain eligibility.