Covington Local Tax Guide (2026)
Understanding how local taxes work in Covington, Kentucky, and how they affect your take-home pay.
In this guide
Last updated: October 1, 2026
- •Covington has a local income tax that applies to income earned in the city.
- •Residents pay 3.1497% on all income. Non-residents pay 3.1497% on Covington income only.
- •Local tax is separate from Kentucky state tax and federal tax. Both are calculated independently and add to your total tax burden.
- •Local tax directly reduces your take-home pay. Combined with state and federal taxes, the total tax burden can be significant for high earners.
What Covington local tax costs at three incomes
The 3.1497% resident rate is charged on top of federal tax, Kentucky state tax and FICA. Priced for 2026, a $75,000 salary loses $2,362 to Covington alone and takes home $56,723: a combined 24.4% of gross across all four.
| Salary | Covington tax | Kentucky tax | Federal + FICA | Take-home | Total rate |
|---|---|---|---|---|---|
| $50,000 | $1,575 | $1,632 | $7,645 | $39,148 | 21.7% |
| $75,000 | $2,362 | $2,507 | $13,408 | $56,723 | 24.4% |
| $120,000 | $3,780 | $4,082 | $26,750 | $85,388 | 28.8% |
Living in Covington rather than only working there costs 0.00 percentage points more: $0 a year on $75,000, since non-residents pay 3.15%.
How Covington compares
Of the 62 US jurisdictions that levy a local income tax, Covington ranks 21st by resident rate. The median is 2.50%, the highest is New York City at 3.078%–3.876%, and the lowest is St. Louis at 1.00%. Immediately above Covington sits Wicomico County (3.20%) and below it Harford County (3.06%).
Within Kentucky, 4 jurisdictions charge a local income tax and Covington is the 1st highest. Same salary, different address:
| Kentucky jurisdiction | Resident rate | Cost on $75,000 |
|---|---|---|
| Covington | 3.1497% | $2,362 |
| Lexington | 2.75% | $2,063 |
| Louisville | 2.20% | $1,650 |
| Bowling Green | 2.00% | $1,500 |
What local taxes apply in Covington
Covington has a local income tax that applies to income earned in the city.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 3.1497% | All income |
| Non-resident | 3.1497% | Covington income only |
Covington has a local income tax that applies to income earned in the city. The rate depends on whether you're a resident or non-resident.
Covington has a local income tax that applies to income earned in the city.
Residents: If you live in Covington, you pay 3.1497% on all your income.
Non-residents: If you work in Covington but live elsewhere, you pay 3.1497% on income earned in the city.
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How they interact with state taxes
Covington local tax is calculated separately from Kentucky state income tax. Both taxes are calculated on your taxable income and are withheld by your employer.
Tax Deduction
Covington local tax is calculated separately from Kentucky state income tax. This means:
- Local tax is in addition to state tax, not instead of it
- Both taxes are calculated on your taxable income (or wages, depending on the tax type)
- Your employer withholds both local and state taxes from your paycheck
- You may be able to deduct local tax on your state tax return, depending on Kentucky tax rules
For example, if you earn $100,000 in Covington, you pay Kentucky state tax on that income, plus Covington local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to Covington local tax if you live in the city or work in the city, depending on whether you're a resident or non-resident.
You're subject to Covington local tax if:
- You live in Covington (residents pay on all income)
- You work in Covington but live elsewhere (non-residents pay on Covington income only)
- You're self-employed and perform work in Covington
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Common paycheck misconceptions
Common misunderstandings about Covington local tax, including when it applies and how it's calculated.
Common misconceptions about Covington local tax:
- "It's the same as state tax": False. Local tax is separate from Kentucky state tax and is calculated independently.
- "I only pay if I live there": False. Non-residents who work in the city also pay.
- "Remote work means no tax": If you're a Covington resident, you typically pay on all income regardless of where you work.
Take-home pay impact
Covington local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
Covington local tax directly reduces your take-home pay. For example, if you earn $100,000 as a Covington resident:
- Local tax: approximately $3150 annually
- This reduces your bi-weekly paycheck by about $121
- Combined with Kentucky state tax and federal tax, the total tax burden can be significant
To see exactly how Covington local tax affects your paycheck, use our calculator above. You can adjust your income, filing status, and deductions to see how different scenarios affect your net pay.
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Does this apply to you?
Determine whether you're subject to Covington local tax based on where you live and work.
Check Your Pay Stub
You're subject to Covington local tax if:
- You live in Covington (residents pay on all income)
- You work in Covington but live elsewhere (non-residents pay on Covington income only)
You're not subject to Covington local tax if you live and work outside the city, even if you're a Kentucky resident.