Kentucky State Tax Routine (KYTX)

The Kentucky (KYTX) State Tax Special Routine processing utilizes the following steps:

Line 1

Multiply the employee’s gross wages for the current payroll period by the number of payroll periods in a year to obtain their Annualized Gross Income (GI).

Line 2

Determine the Standard Deduction Allowance. (Minimum SDA in TAXP)

Line 3

Determine the Taxable Amount by subtracting Line 2 from Line 1.

Line 4

Determine the Marginal Tax Rates from the DEDX.

Line 5

Using the Marginal Tax Rates (DEDX) entries for the Kentucky State Tax Routine deduction, compute tax on the Taxable Amount.

Line 6

Divide the amount on Line 5 by the number of payroll periods in a year to determine the employee’s Kentucky Withholding Tax for the pay period.

Data Setup Considerations

Sites need to ensure that they have implemented the following Business Process/Data Setup Changes at their site prior to Kentucky State Tax Routine.

  1. The Tax Parameters (TAXP) setup for Kentucky.

  1.   Standard Deduction Amount is captured as a part of maximum Standard Deduction.