Kentucky DOR Publishes 2023 Withholding Tax Formula, Standard Deduction, Income Tax Rate

The Kentucky Department of Revenue (DOR) Dec. 1 published the 2023 state withholding tax formula for corporate income and individual income tax purposes. The 2023 state standard deduction is $2,980 and the income tax rate is 4.5 percent. The withholding taxes are calculated by: 1) multiplying wages per pay period by the number of annual pay periods; 2) subtracting the annual deduction to give state taxable wages; 3) computing the tax on state taxable wages using the flat tax rate of 4.5 percent; and 4) dividing the gross annual state tax by the number of annual pay periods to give ...