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Withholding Taxes: Kentucky

Withholding Taxes requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor


  • Wages paid to a nonresident of Kentucky for work performed in Kentucky are subject to withholding, except for wages paid to employees of states that have entered into a reciprocal agreement with Kentucky. Kentucky has a reciprocal agreement with five other states. See Withholding on Residents, Nonresident and Expatriates.
  • Employees are required to complete a withholding exemption certificate and file it with their employer. Kentucky has five types of exemption certificates. See Employee's Withholding Allowance Certificate.
  • Tax on supplemental wages is determined differently depending on whether the supplemental wages are paid together or separately from regular wages. See Supplemental Wages.
  • Employers must provide the designated copies of Form K-2, Wage and Tax Statement, to their employees by January 31. Terminated employees must be provided with the form within a certain number of days after termination. See Form W-2 Requirements.
  • For income tax withholding purposes, Kentucky employers must keep certain records for four years after the date the related return was filed, or the date the tax was paid, whichever is later. See Recordkeeping Requirements.