Kentucky State Tax Extension: A Complete Guide

Tax season can be stressful, but here’s some good news: Kentucky allows you to file an extension, giving you more time to get your return right and avoid late filing penalties.

But remember, a tax extension only delays the filing deadline, not the payment deadline. You’ll need to pay at least 75% of your estimated taxes by April 15, 2024, to avoid penalties.

This guide will walk you through everything you need to know about filing a Kentucky tax extension, from eligibility to payment options, deadlines, and FAQs.

Kentucky Tax Extension Requirements

What is a Tax Extension?

A Kentucky tax extension grants you six additional months to file your state income tax return, moving the deadline to October 15, 2024. However, the payment deadline remains April 15, 2024.

Important Kentucky Tax Extension Facts

• Form 740EXT: Required if you’re making a payment with your extension.
• Automatic Acceptance: Federal extensions (Form 4868) are accepted but must be attached to your Kentucky return.
• Payment Deadline: Any taxes owed must be paid by April 15 to avoid penalties and interest.

How to File a Kentucky Tax Extension

Here’s a step-by-step guide to ensure your extension is filed correctly:

Step 1: Check Eligibility

To qualify for an extension, ensure you’ve paid at least 75% of your total tax liability by April 15.

Examples:

• John estimates his total tax liability for 2023 at $10,000. He needs to pay $7,500 (75% of $10,000) by April 15 to avoid penalties.
• Mary has already had $6,000 withheld from her paycheck, and her total tax liability is $8,000. She must pay $2,000 more by April 15 to meet the requirement.

Step 2: Complete Form 740EXT

Download and fill out Form 740EXT, providing your:

• Name and address
• Social Security number
• Reason for the extension request (e.g., “Need additional time to prepare my return”).

Tip: You can find Form 740EXT on Kentucky’s Department of Revenue website.

Step 3: Calculate Your Payment

Estimate your total tax liability, subtract any withholdings or payments you’ve already made, and ensure you’ve paid at least 75% of the total by April 15.

Example: If your total tax liability is $10,000 and you’ve already paid $6,000, you’ll need to pay $1,500 more to meet the $7,500 (75%) threshold.

Step 4: Submit Form 740EXT and Your Payment

Payment Methods:

• • Online: Use Kentucky’s secure payment portal here to pay via e-check or credit card.
  • By Mail: Send along with your check or money order to: Kentucky Department of Revenue, P.O. Box 1190, Frankfort, KY 40602-1190

Watch-Out: If you’re mailing your payment, ensure it’s postmarked by April 15 to avoid penalties.

Step 5: Save Your Records

Keep copies of:

• Form 740EXT
• Payment confirmation or receipt
• Federal extension form (if applicable)

You may need these for future reference or to address any discrepancies.

Common Mistakes to Avoid

Avoid these pitfalls to save time and avoid penalties:

1. Assuming an Extension Covers Payments: It doesn’t. Pay at least 75% of your liability by April 15 to avoid penalties.
2. Forgetting Form 740EXT When Making a Payment: If you owe taxes and are submitting a payment, you must file Form 740EXT.
3. Not Attaching Your Federal Extension: If you filed Form 4868, attach it to your Kentucky return when filing.
4. Underestimating Your Tax Liability: It’s better to overestimate to avoid penalties. Overpayments can be refunded later.
5. Missing the October 15 Deadline: Mark your calendar and set reminders to file by the extended deadline.
6. Skipping the Extension Altogether: Filing an extension prevents a failure-to-file penalty, which is harsher than a failure-to-pay penalty.

Kentucky Tax Extension FAQs

Do I Have to Pay My Taxes When I File an Extension?

Yes. At least 75% of your estimated taxes must be paid by April 15 to avoid penalties.

Can I File My Kentucky Extension Electronically?

While Kentucky doesn’t currently allow electronic filing for extensions, you can make your extension payment online through the Department of Revenue’s secure portal at revenue.ky.gov.

Can I File a Kentucky Extension If I Don’t Owe Taxes?

Yes. If you don’t owe taxes, submitting Form 740EXT is optional since Kentucky honors federal extensions.

What Are the Penalties for Late Payment?

A 2% monthly penalty (up to 20%) applies to unpaid taxes, plus interest.

What If I Can’t Pay the Full 75%?

Pay as much as possible to minimize penalties and interest. You can also explore payment plans with the Kentucky Department of Revenue.

Do I Need an Extension If I’m Expecting a Refund?

Not necessarily, but it’s still a good idea to file one to protect against miscalculations.

Can I Get an Extension Beyond October 15?

No. The six-month extension to October 15 is the maximum allowed for individual income tax returns in Kentucky.

Kentucky Tax Revenue Overview

Here’s a snapshot of Kentucky’s tax revenue for fiscal year 2023:

• Individual Income Taxes: $5,843.9M
• Sales and Use Taxes: $5,576.3M (10.1% growth)
• Corporate and LLET Taxes: $1,221.6M
• Other Revenue Sources: Lottery ($337M) and property taxes ($774.4M).

Timely tax payments fund essential state services like schools, healthcare, and infrastructure.

To view the full report, go to Publications - Department of Revenue

Need Help? Let Us Handle It for You!

Taxes can be confusing, but you don’t have to tackle them alone. Our experts at IRS Extension are here to help with everything from filing extensions to calculating payments. We’ll ensure your tax season is stress-free and handled correctly.

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