Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
141.010(29),
141.020,
141.310,
141.315,
141.900(22),
341.020,
341.090,
341.395,
26 U.S.C.
3402(q)
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
141.050(4) requires the
Department of Revenue to promulgate administrative regulations and prescribe
the forms and reports necessary for the proper administration of any and all
provisions of KRS Chapter 141.
KRS
141.310(8) authorizes the
department to promulgate an administrative regulation for withholding in
addition to those provided in
KRS
141.310 and
141.315
if the employer and employee agree to additional withholding.
KRS
141.315 requires the department to promulgate
administrative regulations governing certain specified types of payments. This
administrative regulation prescribes procedures for withholding income tax on
gambling winnings, supplemental wages, vacation pay, and unemployment
benefits.
Section 1. Definitions.
(1) "Benefit year" is defined by
KRS
341.090(3).
(2) "Benefits" is defined by
KRS
341.020(4).
(3) "Cabinet" means the Education and
Workforce Development Cabinet as defined by
KRS
341.005.
(4) "Department" means the Department of
Revenue as defined by
KRS
141.010(5).
(5) "Fund" is defined by
KRS
341.020(1).
(6) "Gambling winnings" means winnings that
are subject to withholding as defined by
26 U.S.C.
3402(q) of the Internal
Revenue Code.
(7) "Supplemental
wages" means payments made to an employee by the individual's employer in
addition to regular wages.
Section
2. Gambling Winnings. Every person making a payment of gambling
winnings shall deduct and withhold from the payment Kentucky income tax at the
maximum tax rate provided in
KRS
141.020.
Section 3. Supplemental Wages.
(1) If supplemental wages are paid at the
same time as regular wages, the tax to be withheld shall be determined as if
the aggregate of the supplemental and regular wages were a single wage payment
for the regular payroll period.
(2)
If supplemental wages are paid at a different time, the employer shall
determine the tax to be withheld by aggregating the supplemental wages either
with the regular wages for the current payroll period or with the regular wages
for the last preceding payroll period within the same calendar
year.
Section 4. Vacation
Pay.
(1) If an employee receives vacation pay
for the time of a vacation absence, the vacation pay shall be subject to
withholding as though it were a regular wage payment made for the payroll
period or periods which occur during the vacation.
(2) If vacation pay is paid in addition to
regular wages to an employee who forgoes his vacation, the payments shall be
treated as supplemental wages.
Section
5. Unemployment Benefits.
(1) An
individual filing a new claim for benefits shall:
(a) Be notified of the requirements
established in
KRS
341.395(1) by the Education
and Workforce Development Cabinet; and
(b) Indicate on the initial or reopened claim
for benefits if the individual elects to have the state income tax imposed by
KRS
141.020 deducted and withheld from the
individual's benefits at the rate of four (4) percent. An individual may make
the indication:
1. On paper by completing an
"Initial Claim Application" as incorporated by reference in
787 KAR
1:090;
2.
Electronically by submitting an Initial Claim Application online at
https://uiclaims.des.ky.gov/ebenefit
; or
3. By any other means of
filing an initial claim application as established by the cabinet and 787 KAR
1:090(2).
(2)
The amounts deducted and withheld from benefits pursuant to subsection (1) of
this section shall remain in the unemployment insurance fund until transferred
to the department as a payment of income tax in accordance with the priority
order established in
787 KAR
1:320.
(3)
The cabinet shall follow all procedures pertaining to the deducting and
withholding of income tax specified in
KRS
341.395(3) or by the
department.
STATUTORY AUTHORITY:
KRS
141.050(4),
141.310(8),
141.315
