How Kentucky withholds on a bonus
Kentucky withholds a bonus at its flat rate, 3.5% for 2026 after the January cut from 4%, with no separate supplemental figure because a flat tax does not need one. On a $10,000 bonus the percentage method withholds $2,200 federal, $620 Social Security, $145 Medicare and $350 Kentucky, leaving $6,685 before local tax. The occupational license tax of the city or county where the work is done also applies to a bonus: Louisville Metro's 2.2% takes a further $220, Lexington's 2.25% $225.
Because the state rate is flat, the aggregate method changes Kentucky's line very little and raises the federal line to about $2,700 for a $60,000 earner paid every two weeks. Kentucky's $3,360 standard deduction has been consumed by salary, so a bonus is taxed at the full 3.5% on the return and the state withholding settles even.
What the withholding means for your Kentucky return
Any refund on a Kentucky bonus is federal: a $60,000 single filer's marginal federal rate is 12% up to $50,400 of taxable income and 22% above, so a $10,000 bonus is really taxed at about $1,450 federal against $2,200 withheld, and roughly $750 returns. Residents of Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia and Wisconsin who earn a bonus in Kentucky are withheld for their home state under reciprocity, though the local occupational tax still applies where the work is done. The Kentucky paycheck calculator shows the marginal rates for any salary. Kentucky's Form K-4 has no allowances at all, so nothing on it changes the 3.5% withheld from a bonus; an employee who wants more withheld can request an additional flat amount per paycheck.