Live in Kentucky, Work in Tennessee: Which State Taxes Your Paycheck?
Answer
Only Kentucky taxes you. Tennessee levies no personal income tax on wages, so nothing is withheld there and you file no Tennessee return. Kentucky taxes its residents on all income wherever earned, which means your Tennessee earnings go on a Kentucky resident return in full.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Tennessee takes nothing, but Kentucky still taxes residents on income earned anywhere, so the full amount lands on your Kentucky return.
What you file
- 1Resident return · Kentucky
File a Kentucky resident return reporting all of your income.
The two states, side by side
| Kentucky | Tennessee | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | 7 (Form 42A809) | None |
| Convenience rule | No | No |
| Nonresident return | Form 740-NP | Not applicable |
| Credit for other-state tax | Schedule ITC | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | Yes | No |
| Revenue department | Kentucky Department of Revenue | Tennessee Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Tennessee and working in Kentucky gives:Work state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: Kentucky → TennesseeHome state only
- 1099 contractor: Kentucky → TennesseeHome state only — estimated payments
- Moved mid-year: Kentucky → TennesseeOne part-year return — the state you left
Other Kentucky pairs
Questions people actually ask
I live in Kentucky and work in Tennessee. Which state takes the tax out of my paycheck?
Only Kentucky taxes you. Tennessee levies no personal income tax on wages, so nothing is withheld there and you file no Tennessee return. Kentucky taxes its residents on all income wherever earned, which means your Tennessee earnings go on a Kentucky resident return in full.
Which state should my employer be withholding for?
Kentucky. Your employer should withhold Kentucky tax rather than Tennessee tax on these wages. If a Tennessee line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Kentucky and Tennessee rules on this page were last checked against Kentucky Department of Revenue and Tennessee Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Kentucky Department of Revenue — individual income taxaccessed 2026-08-07
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07