I am at the part where it is asking about a Kentucky Liability Tax and asking me to input this from 2016. what does this mean?

[DanielV01]

It depends.  If you are in the state return, the Liability Tax is what is required for LLC companies to file.  If you do not have your own busines/LLC, you won't need that form at all.  If you do need that form and information, you will need your KY Form 725 LLET filing.