Paducah local tax
On $60,000 of wages, working in Paducah costs $1,200 a year in local occupational fees.
Levy by levy
Each levy is applied at its own wage cap. Adding the rates together and applying them once would give a different, wrong answer wherever the caps differ.
| Levy | Rate | Wages it applies to | Annual amount |
|---|---|---|---|
| Paducah occupational fee | 2% | $60,000 | $1,200 |
| McCracken County occupational fee | 1% | $60,000 | $0 ($600 credited) |
| Total | $1,200 |
How Paducah and McCracken County interact
The county credits the city fee already paid, so the county line is reduced rather than added in full.
- The one verified true-credit county: businesses inside Paducah "shall be entitled to credit for such fees paid to the City of Paducah against the fees imposed by the county".
- Because Paducah's 2% exceeds the county's 1%, the credit absorbs the county fee entirely for a Paducah worker.
McCracken County credits the Paducah fee against its own, so the county fee is reduced rather than added on top.
Source: McCracken County Code §35.37(F), verified 2026-08-22.
Paducah local tax: common questions
How much local tax do I pay working in Paducah?
On $60,000 of wages, $1,200 a year if you live in Paducah. That is 2 separate levies, and each is capped at its own wage base rather than sharing one — which is why the total is not simply the rates added together.
Does McCracken County charge on top of Paducah?
The county credits the city fee already paid, so the county line is reduced rather than added in full.
Is this the same as Kentucky state income tax?
No. This is a local occupational licence fee, levied by the city, county or school board, and it is separate from Kentucky's state income tax. It is also not waived by Kentucky's reciprocity agreements with neighbouring states — Form 740-NP-R, the reciprocal-state refund return, instructs "Do not include local tax withheld."