Jefferson County Tax Deduction
06-10-2009, 05:26 PM
#31
New Hire
Joined APC: Jun 2009
Posts: 8
Jeff Co Tax
In compliance with Federal Law on interstate commerce pilots will be taxed based on the state they live if they work less than 50% in any given state. Therefore any pilot who is a resident in the state of Ky is subject to both Ky state taxes and any local taxes in the county they work.
Jefferson Co allows for two rates depending on if you are a Jefferson Co resident (2.2%) or not (1/45%). In addition Jefferson Co does not tax wages not earned in Ky/Jeff Co. Pilots can estimate the time they work in Jefferson Co and calculate the % to total credit hours which will be applied to the total Gross wages.
For example if you work 10% in Jefferson Co and your wages are $5,000, then $500 is subject to the tax at either the 2.2% ($11) or 1.45% ($7.25).
In addition if you work less than 5% of your time in Jeff Co there is no withholding.
Lastly the pass-through % is only an estimate. You can adjust at any time and at the end of the year you can recalculate the prior year and file for a refund if you calculate that you over paid.
By the way Indiana has local taxes as well, the difference is since the employee does live in Ky the company can not withhold, but the employee may be still liable for paying the tax.
Other states that have local employment taxes are: MI, PA, OH, Al, IN, IL & WV.
06-10-2009, 05:28 PM
#32
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Joined APC: Jun 2009
Posts: 8
In the past, there was a form you could file (with Flight Payroll) called a Jefferson County Tax Pass-Through form. It allowed you to claim less than 100% of the time worked in Jefferson County, and reduce the tax proportionally. If you claimed only 5% of the time worked in Jefferson County (which is a realistic percentage for a UPS pilot), the tax was relatively insignificant. Is this not going to be allowed anymore?
06-10-2009, 05:31 PM
#33
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Joined APC: Jun 2009
Posts: 8
On the UPS Flight Ops website, there is a detailed memo about the tax.
The very first sentence states "crewmembers living in the State of Kentucky will need to be in compliance with the Jefferson County........."
Based on the memo I assume this whole thing is not applicable to out-of-state folks?
The very first sentence states "crewmembers living in the State of Kentucky will need to be in compliance with the Jefferson County........."
Based on the memo I assume this whole thing is not applicable to out-of-state folks?
06-10-2009, 05:35 PM
#34
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Joined APC: Jun 2009
Posts: 8
Even if you are based in the county, not many of you spend much of your time working in the county - if you consider that you are paid based on block or duty rig and only an hour or so of each trip is in the county. Seems like you should be able to justify putting 5% or so of your time is spent working in the county (making 95% of your wages exempt).
06-10-2009, 05:38 PM
#35
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Joined APC: Jun 2009
Posts: 8
That would be SUT or sales and use tax in normal english. A little pot of gold for the local economy tapped from the herd of individuals who pass through by virtue of being employed by a local fixture. Not a huge tax, it is much like the practice of drinking the blood of cows in small enough quantities so that they don't notice, or at most feel just a slight sting from the arrow used to open the vein.
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