07 January 2020 Kentucky 2020 income tax withholding tables and computer formula released; 2019 Form W-2 filing reminders The Kentucky Department of Revenue released the 2020 income tax withholding computer formula and wage-bracket tables and the withholding tax guide. All of these publications are available here. As we reported previously, effective with tax years beginning on and after January 1, 2018, Kentucky enacted a flat 5% income tax rate (HB 366), replacing the graduated personal and corporate income tax tables. Due to this change, all Kentucky taxpayers are taxed at 5% with an allowance for the standard deduction. (EY Payroll Newsflashes Vol. 19, #084, 5-10-2018 and #124, 7-25-2018.) Under Kentucky regulations (103 KAR 18:070) if supplemental wages are paid at the same time as regular wages, the tax to be withheld shall be determined as if the aggregate of the supplemental and regular wages were a single wage payment for the regular payroll period. If supplemental wages are paid at a different time, the employer determines the tax to be withheld by aggregating the supplemental wages either with the regular wages for the current payroll period or with the regular wages for the last preceding payroll period within the same calendar year. Although the regulations do not provide for a flat supplemental withholding rate, the new flat rate of 5% eliminates the need for one. Effective with tax years beginning on and after January 1, 2018, there are no longer any withholding tax exemptions allowed and the 2020 Form K-4, Kentucky Withholding Certificate,?is only required to be completed by an individual declaring exemption status or who is requesting additional withholding per pay period. Form K-4 also replaced Form K-4E, Special Withholding Exemption Certificate, by including the option to claim exemption from withholding under the remaining four types of exemptions.?? Employers submitting 26 or more Forms W-2/1099 to the Department must do so electronically over the Department's website (preferred method) or on CD-ROM. Forms 1099 are only filed with the Department if state income tax was withheld. Employers reporting fewer than 26 Forms W-2 that cannot file electronically or on CD are required to file Form K-5, Employer's Report of Withholding Tax Statements, listing the information from the Forms W-2 on Form K-5, rather than submitting the actual Forms W-2. Paper copies of Forms W-2 should not be mailed to the Department; those received by the Department will not be processed and will not be considered filed. Employers are instructed to retain the Forms W-2 for their records and only provide copies upon request. Form K-5 is completed online and either filed electronically by clicking the submit button or printed with a barcode and mailed to DOR. The K-5 print-and-mail option is only available for those reporting fewer than 26 withholding statements. For more information on electronic and CD reporting, see the 2019 Form W-2 specifications. Go here for the 1099 specifications if filing on CD (online filing not allowed). 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.
Document ID: 2020-0035 | |||||||||
