The Kentucky Department of Revenue has released the 2017 income tax withholding computer formula and wage-bracket tables.

The Kentucky 2017 standard deduction amount increases to $2,480, up from $2,460 for 2016.

The Department has also announced that under new ACH rules, if electronic tax payments are returned, vendor payments for that employer account, if present, will be placed on hold.

Supplemental rate of withholding

A supplemental withholding rate is not available. (103 KAR 18:070)

2016 Form W-2 filing reminders

Employers reporting 100 or more 2016 Forms W-2 are required to file on CD-ROM or via the Department's website. Employers reporting less than 100 Forms W-2 may file on paper, by CD or electronically.

The deadline for filing the 2016 Forms W-2 is January 31, 2017. An extension of 30 days for filing Forms W-2 may be granted if requested in writing prior to the January 31 due date.

For more information, see the 2016 Form W-2 specifications.

For more information, see the Department's website or contact the Department's Withholding Tax Section by e-mail, phone +1 502 564 7287, or fax +1 502 564 3685.

Changes in ACH payments

Taxpayers who make electronic ACH Payments through the Department's Electronic Payment Application or the Tax Payment Solution Application (TPS) are being warned that if a payment is returned for one of the several return codes, a payment hold will be placed on the taxpayer's bank account. This will prevent the same bank account from processing future transactions with the department.

?To have the hold released, the account holder must contact their financial institution to correct the matter. The account holder must then contact the Department via email or in writing stating that the issue has been corrected and future payments will not be affected.

Once received, the Department will forward the correspondence to its payment vendor and request the hold be lifted. Once verification of clearance has been received, the taxpayer will be notified and payments will then be allowed to process.

Kentucky Interactive is updating the banking processes for ACH payments that are processed for the Commonwealth through the TPS system. Certain businesses and individuals restrict who can debit from their account with the use of an authorization list, commonly known as a "Debit Block". These updates will result in new Originating IDs and may require users to provide the new Originating ID (OID) to their banks for authorization to debit their account.

The current ODFI ID# 9350000000 is being replaced with two new OIDs

1. ODFI ID #1522077581

2. ODFI ID #9006402001

For more information, contact Amy Sisk at +1 502 564 4921, ext. 4420 regarding the Department of Revenue's Electronic Payment Application or Angela Wyatt at +1 502 564 6750 regarding the Tax Payment Solution (TPS) Application.

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