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    Kentucky Surcharge Tax for 2014 - Intuit QuickBooks Payroll

    Article ID: 2001677


    The Kentucky Division of Unemployment Insurance is implementing a new surcharge tax effective January 1, 2014, due to legislation enacted by the Kentucky Legislature allowing the creation of a surcharge tax in order to pay interest due on Federal loans taken under Title XII of the Social Security Act.  Click here to see an example of the letter sent to employers in August 2013.

    You may be affected if you are an employer who pays wages in the state of Kentucky and have an active Intuit Payroll subscription.

    When will these changes be available in Intuit QuickBooks Payroll?

    Intuit QuickBooks Payroll implemented support of the Kentucky Surcharge tax in Payroll Update 21404, on January 16, 2014.

    What do I need to do?

    You will need to set up the Kentucky Surcharge (KY Surcharge) tax item in your company file in QuickBooks. First, be sure that you have downloaded Payroll Update 21404.  Click here for more information on how to download and install a Payroll Update.


    Disk Delivery customersThe next disk delivery is scheduled for late January and will include these updates. We strongly recommend that you download and install the payroll update now if you have internet access.  Click here for more information and instructions.

    Follow these steps to set up the Kentucky Surcharge (KY Surcharge):

    1. Select Pay Employees, Start Scheduled Payroll or Payroll Setup to trigger the Add Mid-Year Tax Wizard (employees must be subject to KY - Unemployment Company on the employee profile in order for the Wizard to be triggered).  Click Next to follow the Wizard.


    2. Select "No", for the question "Does your KY Unemployment Company rate in QuickBooks include the rate for KY Surcharge?"


    3. Select "No", for the question "Have you already created your own payroll item to track KY Surcharge?"



    4. Select "Yes, please set up my employees", for the question "Do you want to set up affected employees for KY Surcharge?"

    Note:  All employees will be marked as subject to KY Surcharge, including inactive and released employees.



    5. Select the KY Surcharge rate assigned to your company.  All contributing employers are subject to the rate of 0.22% for the KY Surcharge tax.  Click Next.





    6. If you have already processed paychecks dated for 2014, the following screen will be displayed.  Click Finish.


    7. If you have not already processed paychecks dated for 2014, the following screen will be displayed.  Click Finish.



    If you leave the Wizard before finishing the setup, QuickBooks will automatically set up the payroll item in the Payroll Item List, but it will not apply the payroll tax item on any of the employee profiles.


    You must edit the Employee Profile and choose the new payroll item on the Other tab of the Taxes window.




    We encourage you to revisit this article periodically for any updates and additional details.

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