labor lawAdivision of labor law center

The land of blue-grass is also home to many individuals living and earning incomes in and around Kentucky. So what do you need to know about individual income tax? Each person that lives in and/or earns a wage in the state of Kentucky must pay state income taxes in addition to federal income taxes. But how much of someone’s income should be withheld for state income taxes? You can relax, because there is a simple form to help determine this.

In addition to the federal income tax withholding form, W4, each employee needs to fill out a K-4 form for their Kentucky State income tax withholding. This form has essentially the same information on it, but makes sure you have the proper withholding allowances for state-level withholdings. This form is available online here.

Also, to avoid double-taxation of income, the state of Kentucky has Reciprocal Agreements in effect with Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, and Wisconsin – meaning that if the individual lives in one state and works in another, income tax will only be withheld for the state of residence. A form 42A809 should be used to establish the state of residence for any employee that wishes to alleviate themselves of the burden of double-taxation in these particular states.

And, please take note! If no income tax withholding form is filled out, taxes must be withheld at the highest level possible – single, no deduction allowances – even if the employee is known to be married. To prevent things like this from happening, I cannot stress enough the importance of having each employee file both their K-4 as well as a W4 form for federal income taxes, so please make their completion a priority.

Last 10 posts by Cara

• Massachusetts W-4 - September 24th, 2006
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• Iowa W-4 - September 24th, 2006
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• Federal W-4 Form - August 27th, 2006