TAXES 20-31, Kentucky City (Local) Income Tax Withholding

Published: December 30, 2020
Effective: Pay Period 26, 2020

Summary

The city income tax withholding for Covington and Florence, Kentucky, includes the following changes:

• Covington maximum withholding wage base will increase from $137,700 to $142,800 and the maximum annual withholding from $3,373.65 to $3,498.60.
• Florence maximum withholding wage base will increase from $137,700 to $142,800 and the maximum annual withholding from $2,754 to $2,856.

The following city tax rates for Covington and Florence, Kentucky, remain the same:

• The employee tax rate for Covington remains at 2.45 percent.
• The employee tax rate for Florence remains at 2.00 percent.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

Withholding Formula (Effective Pay Period 26, 2020)

1. Multiply the gross biweekly wages by the number of pay dates in the tax year to obtain the annual wages.
2. To determine the annual Kentucky city income tax withholding, multiply the gross annual wages by the appropriate city income tax percentage in the table below.

   City	State/City Codes	Resident Percentage	Nonresident Percentage	City Tax Status (Duty Station = DS Residence = R)
   Bowling Green	21/0350	1.85	1.85	DS
   Covington	21/0800	2.451	2.451	DS
   Florence	21/1150	2.002	2.002	DS
   Frankfort	21/1220	1.95	1.95	DS, R
   Lexington-Fayette	21/1980	2.25	2.25	DS
   Louisville	21/2090	1.45	1.45	DS
   Owensboro	21/2490	1.78	1.78	DS
   Paducah (voluntary)	21/2520	2.00	2.00	N/A
   Richmond	21/2750	2.00	2.00	DS

   ¹ _{Maximum withholding wage base of $142,800 (maximum annual withholding of $3,498.60).}

   ² _{Maximum withholding wage base of $142,800 (maximum annual withholding of $2,856.00).}

   Note: City tax is mandatory unless otherwise indicated.

3. Divide the annual Kentucky city income tax withholding calculated in step 2 by the number of pay dates in the tax year to obtain the biweekly Kentucky city income tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Previous Tax Bulletin

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 customer service portal.