Kentucky Revised Statute Chapter 141 requires employers to withhold income tax for both residents and nonresidents employees (unless exempted by law). Employers must withhold the income tax of the employees receiving "wages" as defined in Section 3401(a) of the Internal Revenue Code.
Special Withholding Exemption Certificate
We strongly encourage all employers to utilize Form K-4E, Special Withholding Exemption Certificate when applicable. The K-4E should be completed by employees that anticipate no Kentucky Income Tax liability. If the employee is eligible to claim this exemption, the employer will not withhold Kentucky income tax from wages. This certificate may be used instead of Form K-4 by those employees qualified to claim the exemption.
Form K-4E Special Withholding Exemption Certificate