Kentucky County Income Taxes

Boone and Campbell counties have special requirements for their county income tax withholding.

County	County income tax processing
Boone	Splits its payroll withholding into these taxes, each with its own wage limit and tax cap. General County Tax Mental Health Tax
Campbell	Splits its payroll withholding into these taxes, each with its own wage limit and tax cap. General County Tax Mental Health Tax Senior Citizen Tax

When performing tax withholding for employees working in these counties, there are some areas you should consider.

• What is the employee eligibility criterium

• How to override the wage limits

• How to override the tax rates

• How to exclude individual employees

• How to cost the taxes

• What wage basis rules the follow

What is the employee eligibility criterium

The payroll process automatically imposes these taxes on Kentucky employees working in these counties.

How to override the wage limits

You can override the taxes' wage limits on the organization calculation cards.

1. To override at the payroll statutory unit (PSU) level, start the Legal Entity Calculation Cards task from your implementation project.

   To override at the tax reporting unit (TRU) level, start the Legal Reporting Unit Calculation Cards task.

   Settings at the TRU level override those at the PSU level.

2. Open the calculation card for editing.

3. In Component Groups, select the Kentucky state regional node.

   Create it if it doesn't exist.

4. In Calculation Components, select ???.

   Create it if it doesn't exist.

5. Click Enterable Calculation Values on the Calculation Card.

6. Click Create.

7. Search for and select one of these values.

   • County Tax Wage Limit

   • Mental Health Tax Wage Limit

   • Senior Citizen Tax Wage Limit

8. Set the new wage limit, and save your work.

How to override the tax rates

You can't override the rates for the Mental Health or Senior Citizen taxes.

For General County Tax, you can set the following on the employee’s Tax Withholding card.

• Nonresident County Tax Regular Amount

• Nonresident County Tax Regular Rate

• Nonresident County Tax Supplemental Amount

• Nonresident County Tax Supplemental Rate

• Resident County Tax Regular Amount

• Resident County Tax Regular Rate

• Resident County Tax Supplemental Amount

• Resident County Tax Supplemental Rate

How to exclude individual employees

You can't exclude a person from individual Boone or Campbell county taxes. To exclude someone from all Kentucky county taxes:

1. Use the Calculation Entries task to open the person's Tax Withholding card for editing.

2. Choose the Campbell, Kentucky county node.

3. Under County Tax Information, choose Yes for Exempt from County Income Tax.

How to cost the taxes

To process these taxes, cost these predefined elements using the Tax Calculated input value.

• County Mental Health Tax Not Taken

• County Miscellaneous Employee Tax

• County Miscellaneous Employee Tax Not Taken

• Work County Income Tax Not Taken

• Work County Mental Health Tax

• Work County Tax

What wage basis rules they follow

By default, local wage basis rules follow state wage basis rules. Because Campbell County's rules differ from Kentucky's, you must create these wage basis rules for all element classifications defined as taxable effective 1-1-2024.

Note:

You can use HCM Data Loader to load these rules.

Primary classification	Taxable secondary classifications
Supplemental Earnings	All except: Deceased Employee Wages Deferred Compensation Distribution Job-Related Educational Assistance (if considered a reimbursement) Jury Duty Pay Pensions and Annuities
Imputed Earnings	All except: Domestic Partner Dependent Group Term Life Personal Use of Company Car
Pre-Tax Deductions	All