RELATES TO:
KRS
131.155,
141.330
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
131.155(3)(c) requires the
department to promulgate administrative regulations establishing electronic
fund transfer payment requirements for the payment of taxes and fees
administered by the department.
KRS
141.330(1) authorizes the
department to promulgate administrative regulations to require employers to
remit the tax withheld under
KRS
141.310 and
141.315
within a reasonable time after the payroll period or other period. This
administrative regulation prescribes the reporting and payment requirements for
employers withholding Kentucky income tax.
Section
1. Definitions. "Lookback period" means the twelve (12) month
period ending on December 31 of the year immediately preceding the current
calendar year. For example, the lookback period for calendar year 2020 is the
period beginning on January 1, 2019 and ending on December 31, 2019.
Section 2. Reporting and Payment
Requirements. Unless otherwise required or allowed by Section 3 of this
administrative regulation:
(1)
(a) Any employer who withheld income tax of
less than $400 during the lookback period shall report and pay the tax annually
using Revenue Form K-3, "Employer's Annual Reconciliation Return."
(b) Revenue Form K-3 and the income tax
withheld shall be filed and paid on or before the last day of the month
following the close of the calendar year in which the tax was withheld (January
31).
(2)
(a) Any employer who withheld income tax of
$400 or more, but less than $2,000 during the lookback period shall report and
pay the tax quarterly using Revenue Form K-1, "Employer's Return of Income Tax
Withheld."
(b) Revenue Form K-1 and
the income tax withheld each quarter shall be filed and paid on or before the
last day of the month following the close of each of the first three (3)
quarters of the calendar year (April 30, July 31, and October 31).
(c) Revenue Form K-3, "Employer's Annual
Reconciliation Return," and the income tax withheld for the fourth quarter
shall be filed and paid on or before the last day of the month following the
close of the calendar year in which the tax was withheld (January
31).
(3)
(a) Any employer who withheld income tax of
$2,000 or more, but less than $50,000 during the lookback period shall report
and pay the tax monthly using Revenue Form K-1, "Employer's Return of Income
Tax Withheld."
(b) Revenue Form K-1
and the income tax withheld each month shall be filed and paid on or before the
15th day of the following month for each of the first eleven (11) months of the
calendar year.
(c) Revenue Form
K-3, "Employer's Annual Reconciliation Return," and the income tax withheld for
the last month shall be filed and paid on or before the last day of the month
following the close of the calendar year in which the tax was withheld (January
31).
(4)
(a)
1.
Except as provided in paragraph (b) of this subsection, any employer who
withheld income tax of $50,000 or more during the lookback period shall report
and pay the tax twice monthly using Revenue Form K-1, "Employer's Return of
Income Tax Withheld."
2. Revenue
Form K-1 and the income tax withheld during the first through the 15th day of
each month of the calendar year shall be reported and paid on or before the
25th day of that month.
3. Revenue
Form K-1 and the income tax withheld during the 16th through the last day of
each month of the calendar year shall be reported and paid on or before the
tenth day of the following month.
4. However, Revenue Form K-1 and the income
tax withheld during the first calendar month shall be filed and paid on or
before the tenth of the following month (February 10), and the income tax
withheld for the period beginning December 16 and ending on December 31 shall
be paid with Revenue Form K-3, "Employer's Annual Reconciliation Return," which
shall be filed on or before the last day of the month following the close of
the calendar year in which the tax was withheld (January 31).
(b) Any employer who withheld
income tax during the lookback period of $50,000 or more and whose average
monthly income tax withheld during the lookback period is more than $25,000
shall pay the tax withheld by electronic funds transfer.
(5) The department shall provide written
notification of the reporting and payment requirements to any employer who does
not have a lookback period.
(6) For
periods beginning on or after January 1, 2021, twice monthly and monthly filers
shall electronically file and pay the income tax withheld.
(7) For periods beginning on or after January
1, 2022, all filers shall electronically file and pay the income tax
withheld.
Section 3.
Electronic Fund Transfers.
(1) If, on any day
during a reporting period, an employer accumulates $100,000 or more of total
income tax withheld before a current electronic transaction is otherwise due,
the employer shall pay the tax withheld by electronic funds transfer. The
employer shall electronically transfer the tax withheld as provided by
103 KAR
1:060 by the close of the first banking day after the
first day the employer accumulates $100,000 or more of income tax
withheld.
(2)
(a) Any employer not required to pay the tax
by electronic funds transfer may make a written request to the department and,
if approved by the department, shall be subject to the same requirements as
those employers required to electronically transfer the tax.
(b) Any employer who may pay by electronic
funds transfer shall continue to pay the tax withheld by electronic funds
transfer until the department authorizes the employer in writing to change his
reporting and payment method.
Section 4. Authority to Change Reporting and
Payment Requirements. Pursuant to the provisions of Section 2 of this
administrative regulation:
(1) The department
may change annually the reporting or payment requirements of any employer upon
written notice to the employer.
(2)
Upon written request by any employer and approval by the department, the
department may change the reporting or payment frequency prescribed by this
administrative regulation.
Section
5. Penalties and Interest. Any employer who fails to comply with
the provisions of this administrative regulation shall be subject to penalties
as provided in
KRS
131.180 and interest as provided in
KRS
131.183.