Kentucky Guide for Canadians

Quick Facts

State Income Tax	Progressive 2% to 5%
Sales Tax	6% state + local (6.61% average)
Driver's License Grace Period	30 days for residents
Residency Requirement for Tax	Domicile in Kentucky
Vehicle Registration Deadline	15 days for residents
REAL ID Deadline	May 7, 2025 for domestic flights
Enhanced Driver's License	Not available

First 90 Days Checklist

Week 1-2: Essential Documents & Registration

• Register with USCIS if staying 30+ days (required by April 11, 2025)
• Gather required documents for driver's license
• Open US bank account
• Set up Kentucky mailing address

Week 3-4: Official Registration

• Apply for Kentucky driver's license (within 30 days)
• Register vehicle if brought from Canada (within 15 days)
• Register to vote (if eligible)
• Obtain Kentucky identification if not driving

Month 2-3: Establishing Residency

• Update address with Canadian financial institutions
• Establish Kentucky ties and connections
• Research healthcare options and insurance
• Explore bluegrass region and local attractions

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents:

• Original valid Canadian passport (proof of legal presence)
• Social Security Number or letter of ineligibility
• Two proofs of Kentucky residential address
• Birth certificate or citizenship documents for identity

Testing Requirements:

• Written knowledge test required for Canadian citizens
• Vision screening required
• Road skills test required - KY does not recognize foreign licenses
• No pre-licensing course required
• Canadian license will be returned after successful testing

REAL ID Compliance:

• Kentucky offers REAL ID compliant licenses
• Required by May 7, 2025 for domestic air travel
• Enhanced Driver's License not available in Kentucky
• Canadians must use passport for border crossings

Important Notes:

• 30-day limit to get KY license after residency
• Vehicle registration required within 15 days (shorter than most states)
• REAL ID required by May 7, 2025 for air travel
• Must surrender valid out-of-state/country license

Vehicle Registration

• Register within 15 days of establishing residency
• Annual safety inspection required
• Emissions testing required in certain counties
• Kentucky insurance required for registration

Tax & Residency Considerations

Kentucky State Tax Structure

• **Progressive income tax** 2% to 5% based on income
• **No local income tax** (state-level only)
• **No estate tax** (repealed in 2005)
• **Low property taxes** (0.86% effective rate)
• **Moderate sales tax** 6% state + local (6.61% average)

Establishing Kentucky Tax Residency

Kentucky residency is primarily based on domicile:

• Domiciled in Kentucky (intent to make permanent home)
• Physical presence supports but doesn't determine residency
• Intent to remain permanently is key consideration

Documentation to Establish Residency

• Kentucky driver's license and voter registration
• Bank accounts and utility bills in Kentucky
• Employment or business activities in Kentucky
• Professional licenses, club memberships
• Property ownership or long-term lease

Tax Advantage

Kentucky offers relatively low taxes with moderate income tax rates and low property taxes. No estate tax makes it attractive for retirees with significant assets.

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
New Requirement: Canadians staying 30+ days must register with USCIS by April 11, 2025.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• Kentucky has state-based marketplace (kynect)
• Travel insurance strongly recommended for visitors
• Consider US health insurance if staying permanently
• Major medical centers in Louisville, Lexington, Bowling Green

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Research pharmacy options and discount programs

Special Considerations for Snowbirds

New US Registration Requirements (2025)

• Canadians staying 30+ days must register with USCIS
• Registration required by April 11, 2025
• Print and carry latest I-94 as proof of legal entry
• Failure to register may affect future US travel

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• KY domicile-based residency requires careful planning

Property Considerations

• Very affordable property values throughout the state
• Low property tax rates (0.86% effective)
• Horse farms and rural properties available
• Impact on Canada's principal residence exemption

Climate & Lifestyle Factors

• Humid subtropical climate with four distinct seasons
• Milder winters than most of Canada
• Famous for horse racing, bourbon, and bluegrass music
• Very affordable cost of living

Geographic Advantages

• Central location with easy access to multiple regions
• Major airports in Louisville and Lexington
• Appalachian Mountains in eastern Kentucky
• Ohio River and numerous lakes for recreation

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Enhanced Driver's License not available in Kentucky
• I-94 registration now required for 30+ day stays

Cost of Living Advantage

Kentucky offers one of the most affordable costs of living in the US, with low housing costs, reasonable taxes, and very affordable everyday expenses. Excellent value for retirees and families.

Cultural Considerations

• Southern hospitality with Appalachian influences
• Rich bourbon and horse racing heritage
• Bluegrass music and mountain culture
• Growing international communities in Louisville and Lexington

Recreational Opportunities

• Kentucky Derby and horse country tours
• Bourbon Trail distillery visits
• Mammoth Cave National Park
• Lake Cumberland and Kentucky Lake recreation
• Appalachian hiking and outdoor activities

Key Contacts & Resources