TAXES 16-02, Kentucky State Income Tax Withholding

Published: January 11, 2016
Effective: Pay Period 01, 2016

Summary

The income tax withholding formula for the State of Kentucky will increase. The annual standard deduction will increase from $2,440 to $2,460.

Tax Formula

State Abbreviation:

KY

State Tax Withholding State Code:

21

Acceptable Exemption Form:

K-4

Basis for Withholding:

State Exemptions

Acceptable Exemption Data:

0/Number of Exemptions

TSP Deferred:

Yes

Special Coding:

Determine the Total Number of Allowances Claimed field as follows:
First Position - Enter 0 (zero).
Second and Third Positions - Enter the number of exemptions claimed.

Additional Information:

None

Withholding Formula (Effective Pay Period 01, 2016)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program and flexible spending account - health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by 26 to obtain the gross annual wages.
  5. Subtract the standard deduction of $2,460 from the result of step 4 to compute the taxable income.
  6. Apply the taxable income computed in step 5 to the following table to determine the annual Kentucky tax withholding.

    Tax Withholding Table

    If the Amount of Taxable income Is:

    The Amount of Kentucky Tax Withholding Should Be:

    Over $0 but not over $3,000

    $0.00 plus 2.0% of excess over $0

    Over $3,000 but not over $4,000

    $60.00 plus 3.0% of excess over $3,000

    Over $4,000 but not over $5,000

    $90.00 plus 4.0% of excess over $4,000

    Over $5,000 but not over $8,000

    $130.00 plus 5.0% of excess over $5,000

    Over $8,000 but not over $75,000

    $280.00 plus 5.8% of excess over $8,000

    Over $75,000 and over

    $4,166.00 plus 6.0% of excess over $75,000
  7. Determine the exemption allowance by applying the following guideline and subtract this amount from the result of step 6 to compute the annual Kentucky tax withholding.

    Exemption Allowance = $10 x Number of Exemptions.

  8. Divide the annual Kentucky tax withholding by 26 to obtain the biweekly Kentucky tax withholding.

Additional Resources

To view the updated tax formula go to the HR and Payroll Clients page and click the Publications tab in the center ribbon. Select U.S. Income Tax Formulas from the Publication menu to launch the tax map. Click the desired State from the map provided for the formula.

Inquiries

For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at 1-855-NFC-4GOV (1-855-632-4468) or via the Internet using the Requester Console.