PAYROLL:
What is the Occupational Tax rate and what do you consider taxable wages?
The rate is 0.8% for employees working in the City of Somerset, 1% for All employees working in Pulaski County, The taxes are calculated on gross wages before any deductions.
When are the returns due?
30 days after each quarter ends. The March 31st return is due on April 30th, the June 30th return is due on July 31st, the September 30th return is due on October 31st and the December 31st is due on January 31st.
Are there penalties and interest due on delinquent returns ?
Yes, Penalties = 10% Interest = 8% per annum.
Who must withhold ?
Any employer who employees an individual to perform an service, of whatever nature, as the employee of such person, must withhold on said employees and remit said withholding on a quarterly basis.
What classes of persons are exempt from paying the withholding ?
- Any persons exempt under Kentucky State Statute.
- Persons classified as domestic servants who are employed to take care of an individual or an individuals family. This does not include those persons who are employed by a cleaning service, personal nursing service, chauffeuring service or any other entity which offers the services of its employees to the public.
NET PROFIT:
What is the rate ?
1% Outside Somerset City Limits but inside Pulaski.
.8% for Businesses located within Somerset City limits.
What is Net Profit ?
Net Profit means gross income as defined in Section 61 of the Internal Revenue Code minus all the deductions from gross income allowed by Chapter 1 of the Internal Revenue Code, and adjusted as follows: (a) Include any amount claimed as a deduction for state tax or local tax which is computed, in whole or in part, by reference to gross or net income and which is paid or accrued to any state of the United States, local taxing authority in a state, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country or political subdivision thereof; (b) Include any amount claimed as a deduction that directly or indirectly is allocable to income which is either exempt from taxation or otherwise not taxed; (c) Include any amount claimed as a net operating loss carryback or carryforward allowed under Section 172 of the Internal Revenue Code; (d) Include any amount of income and expenses passed through separately as required by the Internal Revenue Code to an owner of a business entity that is a pass-through entity for federal tax purposes; and (e) Exclude any amount of income that is exempt from state taxation by the Kentucky Constitution, or the Constitution and statutory laws of the United States.
When are returns due ?
105 days after the fiscal or calendar year end.
Are Federal or State extensions accepted ?
Yes ( See Ordinance Section 7 – Extensions for governing statute )