Kentucky employer tax information
About Kentucky employer tax information
With Square, you can run payroll, pay your taxes and stay ahead of the compliance to focus on running your business. This guide is intended for your state taxes only. It’s important to note that laws vary by jurisdiction, and this guide does not attempt to address all jurisdictions or federal taxes — for example, counties or cities often have requirements that differ from federal and state law.
Before you begin
To sign up for Square Payroll in Kentucky, you must be registered with the Kentucky Department of Revenue and the Kentucky Division of Unemployment Insurance so we can pay and file your state taxes.
The Kentucky Division of Unemployment Insurance typically requires employers to file and pay unemployment taxes starting in the quarter that wages are first paid. If you become liable for unemployment taxes and register an account in a later quarter, it may be necessary to file these taxes retroactively. Visit the Kentucky website or contact the KY Division of Unemployment Insurance directly to determine your requirements and ensure any outstanding tax filings are completed promptly to avoid penalties.
For Kentucky Department of Revenue, you need your:
Kentucky Withholding Tax Account Number (6 digits)
Kentucky Deposit Frequency (semi-monthly, monthly, quarterly, or annually)
For Kentucky Division of Unemployment Insurance, you need your:
Kentucky UI Employer Account Number (9 digits + 1 letter)
UI Tax Rate
Kentucky payroll tax details
Square Payroll processes the following per the frequency for the listed state agencies.
Kentucky Department of Revenue
Withholding Tax Filing: processes after every pay run
Employer's Return of Income Tax Withheld (K-1): processes semi-monthly, monthly, and/or quarterly
Wage and Tax Statement (W-2): processes annually
Employer's Annual Return of Income Tax Withheld (K-3): processes annually
Kentucky Division of Unemployment Insurance
Employer's Quarterly Unemployment Wage and Tax Report (UI-3): processes quarterly
Kentucky New Hire Reporting Center
New Hire Report: processes as needed
Make Kentucky payroll withholding tax filings
Employers should file according to their assigned deposit frequency. For more information on filing frequency and due dates, download the Withholding Tax Instructions for Employers.
-To file online, use the Kentucky Online Gateway (KOG).
- To file by mail, download Form K-1E, and mail return with any tax payment due to the address indicated on the form. This option is for EFT accounts only.
Annual withholding tax returns are due by January 31 for the preceding calendar year. In addition to the return, you must provide each of your employees with a federal Form W-2 summarizing the employee’s withholding for the year. You must include copies of the W-2s sent to all of your employees working in Kentucky with the Form K-3.
-To file online, use the Kentucky Online Gateway (KOG).
- To file by mail, download Form K-3 and mail return with any tax payment due to the address indicated on the form.
Kentucky W-2s are due by January 31 for the preceding calendar year. W-2s must be accompanied by Form K-3, Employer’s Annual Return of Income Tax Withheld from. File W-2s for all employees working in Kentucky:
To file online, use the Kentucky Online Gateway (KOG) to file your Form W-2s along with your Form K-3. You must file electronically if you are filing more than 26 W-2s.
Make Kentucky payroll tax payments
To make Kentucky withholding tax payments, you must be registered with the Kentucky Department of Revenue One Stop Business Portal. You must have a Federal Employment Identification Number to register with the Department of Revenue to obtain a Commonwealth Business Identifier (CBI) number.
-To pay online, sign in to the Kentucky Online Gateway. You can also register for EFT payments and pay EFT Debits online through the Kentucky Department of Revenue’s Tax Payment Solution.
- To pay by mail, mail a return with check or money order made payable to: Kentucky State Treasurer, Kentucky Department of Revenue, Frankfort, KY 40620-0004.
For questions about withholding tax payments, visit the KY DOR website or call 502-564-4581.
Make unemployment insurance tax filings in Kentucky
Unemployment insurance tax reports and payments are due by the last day of the month following the end of the calendar quarter (for example, on April 30 for the first quarter).
Use the Office of Employment & Training portal to file.
Find your Kentucky tax account numbers
If you are a new business, register online with the KY Department of Revenue to retrieve your KY Withholding Tax Account Number and deposit frequency.
If you already have a KY Withholding Tax Account Number and an assigned deposit frequency, you can find your information on the KY Department of Revenue website, or on any previous Form K-1 or K-3, or on correspondence from the KY Department of Revenue.
If you are unsure, you can contact the KY Department of Revenue at 502-564-3306 or 502-564-7287.
If you are a new business, register online with the KY Division of Unemployment Insurance to retrieve your account number and UI Tax Rate.
If you already have a KY UI Employer Account Number and UI Tax Rate, you can look these up on the KY Division of Unemployment Insurance website or find them on the Notice of Contribution Rate mailed by the KY Division of Unemployment Insurance. If you’re unsure, contact the agency at 502-564-2272 or visit the KY Division of Unemployment Insurance website.
Payroll reciprocal state agreements
A reciprocal agreement is an agreement between two states that allows employees that work in one state but live in another to request exemption from tax withholding in their employment state. This means that the employee would not have income tax withheld from their paycheck for their employment state; they would only pay income taxes to the state where they live.
A Non-Residency Certificate (or statement or declaration), is used to declare that an employee is a resident of a state which has a reciprocal agreement with their work state and therefore chooses to be exempt from withholding income tax in their work state. A non-resident employee qualifying for this exemption must complete and file this declaration with his or her employer as authorization for the employer to stop withholding state income taxes where the employee works. Employers should keep the non-residency certificate on file.
Kentucky has reciprocal agreements with:
Illinois
Indiana
Michigan
Ohio
Virginia
West Virginia
Wisconsin
Non-resident employees should file Form 42A809.