I'm not familiar with 457(f) plans. Since this nonqualified deferred compensation plan is reported on a W-2 in for the later of the year it was received or the year it is no longer subject to a substantial risk of forfeiture, it seems like it would be income in the same state as the state in which regular wages would be taxed if such regular wages were paid at the moment that the deferred income became reportable, that is, when the deferred compensation became no longer subject to forfeiture, KY in this case, I think. But that's just a guess. Ask the employer.
