Kentucky Form 740-NP is the tax return form used by nonresident and part-year resident taxpayers who earned income from Kentucky but were not full-time residents during the tax year. This form helps individuals calculate their Kentucky Adjusted Gross Income (AGI), determine their tax liability, and apply for various tax credits. Nonresidents report only the income they earned in Kentucky, while part-year residents report income earned while they were living in the state. The form requires taxpayers to enter their federal AGI, determine taxable income, apply deductions or credits, and calculate the amount of tax owed or refunded. It is essential for those who do not qualify as full-year Kentucky residents to file the correct version of the tax return to comply with state tax laws.
How to File Kentucky Form 740-NP
Filing Kentucky Form 740-NP involves several key steps. First, gather your necessary documents, including your federal tax return (Form 1040), income records, and any documentation supporting deductions or credits. If you’re a nonresident, you will only report income earned in Kentucky, while a part-year resident will include income earned while residing in Kentucky. The form can be filed electronically through Kentucky’s e-filing system, or you can mail a completed paper form to the Kentucky Department of Revenue. After filling out the form, calculate your taxable income, apply any credits such as the Family Size Tax Credit or Education Tuition Tax Credit, and determine if you owe taxes or are due a refund. Be sure to include all relevant schedules and payment, if necessary, to avoid penalties.
How to Complete Kentucky Form 740-NP
Section A: General Information
- Spouse’s Social Security Number
Enter your spouse’s Social Security number, if applicable. For joint returns, both taxpayers must provide their numbers. - Your Social Security Number
Enter your own Social Security number. - Name
Enter your full name as it appears on your tax documents, including last name, first name, and middle initial. If filing jointly, also enter your spouse’s name. - Mailing Address
Provide your full mailing address, including apartment number or P.O. Box, city, state, and ZIP code. - Filing Status
Select the appropriate filing status:- 1 for Single
- 2 for Married, filing joint return
- 3 for Married, filing separately (if applicable, enter your spouse’s Social Security number)
- Military Spouse (if applicable)
- Political Party Fund
You can designate $2 to a political party. This does not change your refund or tax due. Check one of the following:- Democratic (1)
- Republican (2)
- No Designation (3)
- Residency Status
- Full-year nonresident: If you did not live in Kentucky during the year, check this box. Enter your state of residence as of December 31, 2025.
- Part-year resident: If you moved into or out of Kentucky, enter the state you moved from or to and the date of the move.
- Reciprocal state filer: If you are a full-year resident of a reciprocal state (IL, IN, MI, OH, VA, WV, or WI) with Kentucky income of wages and salaries only, you must file a 740-NP-R instead of this form.
- State of Residence on December 31
If you are a full-year nonresident, enter the state you were a resident of on December 31, 2025.
Section A: Taxable Income and Adjustments
- Enter percentage from Section B, Line 34
This is the percentage of your income that is subject to Kentucky tax, derived from Section B, Line 34. - Enter amount from Section B, Line 33, Column A
Enter the Federal Adjusted Gross Income (AGI) from Section B, Line 33, Column A. This is the income as reported on your federal return. - Enter amount from Section B, Line 33, Column B
Enter your Kentucky Adjusted Gross Income (AGI) from Section B, Line 33, Column B. - Nonitemizers
If you do not itemize deductions, enter $3,160 (do not prorate). Skip Lines 11 and 12 if you’re using this option. - Itemizers
If you itemize your deductions, enter the amount from Kentucky Schedule A (Form 740-NP). - Multiply Line 11 by the Percentage on Line 7
For itemizers, multiply the amount from Line 11 by the percentage from Line 7 (the Kentucky tax percentage based on your residency status). - Subtract Line 10 or 12 from Line 9
If you are a non-itemizer, subtract Line 10 from Line 9. If you are an itemizer, subtract Line 12 from Line 9. The result is your Taxable Income. - Tax Computation
Multiply your Taxable Income (Line 13) by 4% (0.04) to calculate your Kentucky income tax due. - Enter Amount from Schedule ITC, Section A, Line 25
Enter any tax credits from Schedule ITC, Section A, Line 25. - Subtract Line 15 from Line 14
Subtract the amount from Line 15 (Tax Credits) from Line 14 (Tax Computation). This gives you your Tax Due Before Personal Credits. - Enter Personal Tax Credit Amounts from Schedule ITC, Section B
Enter personal tax credit amounts from Schedule ITC, Section B. - Multiply Line 17 by the Percentage on Line 7
Multiply the amount from Line 17 (Personal Tax Credits) by the percentage on Line 7 (your Kentucky tax percentage). - Subtract Line 18 from Line 16
Subtract the value from Line 18 (adjusted personal credits) from Line 16 (final tax liability). This is your final tax amount.
Section B: Income and Deductions
Income Section
- Enter All Wages, Salaries, Tips, etc.
Enter the total of all wages, salaries, tips, and other income from Kentucky Schedule KW-2. Do not include moving expense reimbursements. - Moving Expense Reimbursement
If applicable, enter the amount of any moving expense reimbursements. - Interest
Report any interest income earned during the year. - Dividends
Report any dividends received during the year. - Taxable Refunds, Credits, or Offsets of State and Local Income Taxes
If applicable, enter the amount of taxable state or local income tax refunds, credits, or offsets you received. - Alimony Received
Report the total amount of alimony received. - Business Income or Loss
If you operated a business, report the income or loss. Attach federal Schedule C. - Capital Gain or Loss
Report any capital gains or losses. Attach federal Schedule D. - Other Gains or Losses
Report other gains or losses not captured on Schedule C or D. Attach federal Form 4797 if necessary. - Federally Taxable IRA Distributions, Pensions, and Annuities
Report taxable IRA distributions, pensions, and annuities. - Rents, Royalties, Partnerships, Estates, Trusts
Report income from rents, royalties, partnerships, estates, or trusts. Attach federal Schedule E. - Farm Income or Loss
Report income or loss from farming. Attach federal Schedule F. - Unemployment Compensation
Report any unemployment compensation received. - Taxable Social Security Benefits
Report any taxable Social Security benefits received. - Gambling Winnings
Report any gambling winnings during the year. - Other Income
Report any other income not listed above. Provide a brief description. - Total Income
Add up the totals from Lines 1 through 16. This is your Total Income.
Adjustments to Income
18-31. Adjustments to Income
Report adjustments such as educator expenses, business expenses for certain workers (reservists, performing artists, etc.), health savings accounts, self-employment taxes, and more. Provide appropriate supporting documents (e.g., federal Forms 2106, 8889).
- Total Adjustments to Income
Add up all adjustments from Lines 18-31 to get your total adjustments to income. - Adjusted Gross Income
Subtract Line 32 from Line 17. This is your Adjusted Gross Income (AGI). - Percentage of Kentucky Adjusted Gross Income to Federal Adjusted Gross Income
Divide Column B of Line 33 (Kentucky AGI) by Column A (Federal AGI). If the result is 100% or more, enter 100%. This percentage determines your Kentucky tax liability.
Tax Calculation and Credits
20-22. Family Size Tax Credit
Check the box for your family size (from 1 to 4) and multiply by the applicable Family Size Tax Credit decimal amount from Schedule ITC. Subtract this from your tax due.
- Education Tuition Tax Credit
Enter the Education Tuition Tax Credit from Form 8863-K, Line 17. - Child and Dependent Care Credit
Report any Child and Dependent Care Credit from the worksheet provided in the instructions. - Reserved
This line is reserved for future use. - Income Tax Liability
Subtract Lines 23-25 from Line 22. If the result is zero or less, enter zero. - Kentucky Use Tax
If applicable, report the Kentucky Use Tax owed from out-of-state purchases. - Total Tax Liability
Add Lines 26 and 27 to get your Total Tax Liability. - Amended Return
If applicable, enter the overpayment amount from the original return. - Add Lines 28 and 29
Add Lines 28 and 29 together to get the total amount due. - Enter Tax Withheld and Payments
Report Kentucky income tax withheld, estimated payments, or any applicable credits (Lines 31a to 31i). - Total Payments and Credits
Add up Lines 31a through 31i to determine your total payments and credits. - Additional Tax Due
If Line 30 is greater than Line 32, subtract Line 32 from Line 30 to determine the additional tax due. - Penalties and Interest
Add any penalties for estimated tax, interest, late payments, and late filing. - Total Penalties
Add up the penalties (Lines 34a to 34d). - Amount You Owe
If the total of Lines 30 and 35 is greater than Line 32, subtract Line 32 from the total of Lines 30 and 35 to calculate the amount you owe. - Amount You Overpaid
If Line 32 is greater than Line 30, subtract Lines 30 and 35 from Line 32 to calculate the amount you overpaid.
Final Section: Signature and Submission
38-41. Refund, Credit Forward, and Fund Contributions
Report any contributions to specific funds (e.g., Nature and Wildlife Fund), request for credits to next year, and the amount to be refunded.