Kentucky Tax Interest Rate Update for 2025

revenue.ky.gov

Published January 1st, 2025

Detected March 17th, 2026

Summary

The Kentucky Department of Revenue has announced the tax interest rates for 2025. The rate for unpaid tax liabilities will be 8%, while overpayments will accrue interest at 6%. These rates are effective January 1, 2025.

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What changed

The Kentucky Department of Revenue has updated its tax interest rates for the upcoming year. Effective January 1, 2025, the interest rate charged on unpaid tax liabilities will be 8%, a decrease from the previous year's rate. Additionally, the interest rate for overpayments will be 6%.

Taxpayers should be aware of these updated rates when calculating tax liabilities and overpayments for the 2025 fiscal year. While this is an annual update mandated by state law, it is crucial for businesses and individuals to apply the correct rates to avoid discrepancies in tax calculations.

What to do next

Update internal systems to reflect the new tax interest rates of 8% for liabilities and 6% for overpayments effective January 1, 2025.

Source document (simplified)

Tax Interest Rate Update for 01-01-25

News
Tax Interest Rate Update for 01-01-25 State law mandates that the Commissioner of the Department of Revenue annually review the interest rate charged on all tax liabilities, making any required changes. Commissioner Thomas B. Miller has established the Tax Interest Rate effective January 1, 2025, to be 8 %, which is a decrease from the rate for 2024. Therefore, the taxes payable to the Commonwealth that have not been paid at the time prescribed by statute will accrue interest at the rate of 10 % pursuant to KRS 131.183(2)(a)2. Likewise, interest allowed and payable upon any overpayment will accrue interest at the rate of 6 % pursuant to KRS 131.183(2)(b)2.