An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. In addition to obtaining an EIN, it is important for business owners to understand federal tax obligations. The Internal Revenue Service (IRS) has a number of useful online resources to help in this area. You may want to consult with an accountant or tax professional regarding your business taxes.
State taxes in Kentucky are administered by the Department of Revenue. Most types of businesses in Kentucky are required to register with the Department of Revenue. For more information and to register, visit the Start section of the Kentucky Business One Stop.
To obtain general information regarding the major business taxes click the links below:
Depending on the goods and services your business provides, there may be additional taxes that apply to your business; for more information visit the business section of the Department of Revenue website.
Federal and State Employee-related Taxes
Employers have tax obligations to the Internal Revenue Service and the Kentucky Department of Revenue. The IRS provides guidance on federal employment taxes including Publication 15, Employer’s Tax Guide and Publication 15-A, Employer’s Supplemental Tax Guide. Federal employer tax obligations include social security/Medicare taxes, unemployment taxes and federal income tax withholding from employee pay.
Kentucky employers are required to withhold state income taxes from employees. To start this process, complete a Kentucky Tax Registration Application. Additional withholding tax information is available from the Department of Revenue.
Local Business Taxes
Many cities and counties require a local business license and / or impose an occupational tax or other type of tax on individuals and firms conducting business within their jurisdiction. Pursuant to KRS 67.766, occupational license tax forms for each Kentucky taxing district that imposes such a tax are now available online – Occupational License Tax Forms Database.
To learn about your requirements in this area, begin by contacting the city and/or county government where your principal place of business in Kentucky will be located. You should also check with each city and/or county government where you intend to transact business or have a business presence.