Do you own a business in Kentucky? Here’s some helpful information and links.
![State Income Withholding Tax](https://blog.paymaster.com/wp-content/uploads/2023/06/State-Income-Withholding-1-1024x213.png)
Kentucky does have state income tax. Employers should have their employees fill out for K-4.
![](https://blog.paymaster.com/wp-content/uploads/2023/07/image-17.png)
Additional information on the state income withholding tax can be found here.
![Reciprocity Agreements](https://blog.paymaster.com/wp-content/uploads/2023/06/State-Income-Withholding-1024x213.png)
Kentucky has reciprocity agreements with Illinois, Indiana, Michigan, West Virginia and Wisconsin. There are conditional reciprocity agreements with Virginia and Ohio.
For Virginia: Employees must commute daily from their Virginia residents to their place of employment in Kentucky.
For Ohio: Employee that reside in Ohio but work in Kentucky can not be an stockholder-employee who is 20% or greater direct or indirect equity in an S corporation.
Employees that live in any of these states and meet the conditions should indicate so in box 4 on their K-4 form.
![](https://blog.paymaster.com/wp-content/uploads/2023/07/image-4.png)
![](https://blog.paymaster.com/wp-content/uploads/2023/07/image-5.png)
Additional information on the reciprocity agreements can be found here.
![Other Important Links](https://blog.paymaster.com/wp-content/uploads/2023/06/Other-Links-1-1-1024x213.png)