All employers will receive a new 9-digit KEIN in KUIP. In the new system, employers and TPAs will use the employer's new KEIN to file wages or make payments.

• New KEINs will have the same 6-digit base number, as well as a new 3-digit prefix, and a separate employer unit number for employers who have multiple locations.
• Employers already registered in the current UI system will receive a new KEIN before the new Tax System is implemented.
• Employers not previously registered in the current UI system will receive a KEIN (in the updated format) once they complete registration in the new system.
• A KEIN starting with “1” in KUIP indicates an employer account converted from the legacy system. A KEIN starting with “2” shows an employer who registered in KUIP after Monday, August 17th. The legacy base number will stay the same, but will have a three-digit prefix which converts any letter from the legacy KEIN into a numeric value (A = 01, B = 02, C = 03, etc.). For example, a KEIN currently recorded in the legacy system as 00123456B will appear as 102123456 in KUIP.

KUIP will use an updated, leaner ICESA file format and a new CSV (comma separated values) delimited file format that will make wage reporting more efficient for employers and Third-Party Administrators (TPAs). View our resources section below for guides on using the new formats.

Employers and TPAs will only report gross wages. Excess wages, taxable wages, and the amount due for the employer will be automatically calculated by KUIP.

Either the employer or the TPA will be able to start the authorization process to assign a TPA to an employer account.

Employers must file quarterly wage and tax reports electronically via KUIP. Third-party administrators must also file quarterly wage and tax reports on behalf of employers electronically via KUIP. Reports may be uploaded into the portal or the information in a report may be manually entered in KUIP.

For assistance obtaining login credentials or activating a new employer or TPA account, visit here.

KUIP accepts two types of wage and tax report file formats – ICESA E and S records, and comma-delimited (CSV) records. Be aware that the ICESA file format specifications have changed.

Information regarding ICESA file upload specifications may be found here.

Information regarding Delimited file upload specifications may be found here.

Information regarding zero payroll wage reports may be found here.

Employers who report by electronic media have the option to make their tax payments via electronic fund transfer (EFT) or major credit card (a fee is applied to all credit card transactions). Information may be found in the KUIP portal.

Questions or requests for information concerning reporting requirements should be addressed to:

Office of Unemployment Insurance
Tax Enforcement Branch
P.O. Box 948
Frankfort, KY 40602-0948
(502) 564-2168 (Office)
(502) 564-5442 (Fax)
E-Mail: UiTax@ky.gov

In addition to quarterly State Unemployment Tax Act (SUTA) returns, employers are responsible for filing an annual Federal Unemployment Tax Act (FUTA) return and paying any tax due. The FUTA program was established by the federal government in 1939 as a response to the Great Depression. FUTA funds are used to support unemployed citizens by operating state workforce agencies (like OUI) and assisting states in paying unemployment benefits to qualified claimants.

Just as Kentucky operates an unemployment trust fund, the federal government has its own trust fund. Money in this fund, which comes from FUTA tax paid by employers like you, is used to pay up to half of extended state benefits in times of high unemployment. It also provides loans to state workforce agencies when the state’s trust fund has been depleted. In Kentucky, this happened in 2009, and the state took out a loan from the federal unemployment trust fund to cover benefit costs. A surcharge (see below) was enacted to pay interest on the loan beginning in 2012.

The FUTA tax is assessed at 6.0% of the first $7,000 paid to a covered employee. Employers who timely pay their SUTA, or state unemployment tax, receive a credit against their FUTA tax, up to 5.4%. In January of each year, the state performs FUTA certification for employers on the year prior to the year just filed (in other words, two years back from the current year). The state compares FUTA amounts paid by employers for the year under consideration to the amounts reported by the IRS to certify that employers are eligible for the state credit against FUTA tax.

If an employer hasn’t filed their annual return, the state records do not match IRS records, or the employer paid SUTA after February 10th of the year under consideration, then the employer will lose all or part of the 5.4% credit against FUTA. If an error is suspected, employers who lose certification may re-certify through self-service in KUIP. Otherwise, certification will be restored by the state upon timely payment of SUTA for the following year.

If Kentucky must obtain a federal loan due to future insolvency, a surcharge will be enacted to pay the interest on the loan. The amount of the surcharge is determined by congressional action and the amount of the loan, and will offset the employer credit against FUTA tax. Guidance will be provided by the Office of Unemployment Insurance if the surcharge is enacted in the future. Please see the table below for the maximum allowable FUTA credit in previous years.

Maximum Allowable Credit

Misclassification

Misclassification happens when an employer calls someone who is an employee a "subcontractor" or an "independent contractor" to avoid providing benefits such as Unemployment Insurance, or to avoid withholding and remitting payroll taxes.

Fraud

Fraud happens when someone intentionally lies about a material fact to affect unemployment insurance or workers compensation obligations or benefits, whether their own or someone else’s.

The misclassification of employees as independent contractors is illegal.

When employees are misclassified as independent contractors or subcontractors, employers avoid paying required unemployment coverage, worker’s compensation insurance, and other employer-paid taxes and withholdings. There are serious consequences for employers that misclassify workers, including:

• Tax penalties and interest
• Labor law and workplace safety violations
• Back unemployment insurance premiums
• Costly lawsuits if a worker is injured on the job

Per KRS 341.990 (6)(a) , “[a]ny person who knowingly makes a false statement or representation, or who knowingly fails to disclose a material fact to prevent or reduce the payment of benefits to any worker entitled thereto, or to avoid becoming or remaining subject to this chapter, or to avoid or reduce any payment required of an employing unit under this chapter shall be guilty of a Class A misdemeanor unless the liability avoided or attempted to be avoided is one hundred dollars ($100) or more, in which case he shall be guilty of a Class D felony.”

We need your help. Your identity will be kept confidential.

We need your help. Your identity will be kept confidential.

If you know a business is intentionally misclassifying its employees, contact us immediately.

You may report worker misclassification or fraud by either of the methods identified below:

• Online report (preferrable method): Select one of the Report buttons below and complete the online form.
• Email: Print, complete, and email the document linked below to UiAuditors@ky.gov.
• Fax: Print, complete, and submit the document linked below to: (502) 564-5590.
• Phone: Call (502) 564-6838 and be prepared to provide specifics about the business you are reporting for investigation.
• By Mail: Print, complete, and submit the document linked below to:
  Office of Unemployment Insurance
  Tax Audit Branch
  P.O. Box 948
  Frankfort, KY 40601

Investigation Outcomes

Specific details about investigations must remain confidential by law.

Related IRS Resources

• Reporting Suspected Tax Fraud Activity to IRS: Information Referral Form 3949-A
• Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding: Form SS-8

Other Resources

• Misclassified Worker Web Reporting Document
• Misclassified Worker Brochure
• KY UI POA Form

Employer wage and tax reports must be filed on a quarterly basis for state unemployment. Reports are due by the last day of the month following the last month in each quarter (see table below). If the due date falls on a weekend (Saturday or Sunday) or a legal holiday, the due date moves to the following business day. Penalties are charged on late reports.

*Of the following year

Penalties

The assessment of penalties depends on how many late reports you’ve filed during the calendar year, as well as how many days after the due date the late reports are filed.

• First late report (filed within 30 days of due date): $25
• First late report (filed more than 30 days after due date): $75*
• *$25 plus additional $50 penalty
• Additional late reports (filed within 30 days of due date): $125
• Additional late reports (filed more than 30 days after due date): $175*
• *$125 plus additional $50 penalty

If all four quarters are filed late, the first quarter filed (no matter which) is subject to the standard $25 penalty, plus an additional $50 if filed more than thirty (30) days after the due date. The other three quarters are each subject to the $125 penalty, plus an additional $50 penalty if filed more than thirty (30) days after the due date.

The total maximum late filing penalty for one calendar year is $600.

Interest

Any payment owed is due at the time of report filing, and interest is charged on late payments. Interest is assessed at a rate of 1.5% per month on the original unpaid contributions and SCUF/surcharge balance for each month (or fraction of a month) the payment remains past due.

Employers who have elected to reimburse the state instead of paying unemployment tax contributions (i.e., reimbursing employers) are subject to interest on any benefits charged to their account (HB 5, 2010 legislative session). The chart below contains the assessed Trust Fund Interest (TFI) rate for previous years.

When you receive a quarterly Statement of Benefit Charges, Request for Reimbursement (UI-R448), you will notice a separate line-item charge for Trust Fund Interest. The statute below explains how TFI is calculated:

KRS 341.275 (3)(a) Payments in lieu of contributions shall be made in accordance with the provisions of this subsection. (a) At the end of each calendar quarter or at the end of any other period as determined by the secretary, the cabinet shall bill each nonprofit organization (or group of such organizations) which has elected to make payments in lieu of contributions for an amount equal to the full amount of regular benefits plus one-half (1/2) of the amount of extended benefits paid during such quarter plus any prior period adjustments, which are attributable to service performed in covered employment in the employ of such organization plus interest on the total amount billed at the average rate of earnings in the unemployment insurance fund for the prior calendar year. All interest collected under this subsection shall be credited to the unemployment insurance fund.

What is SCUF?

During the 2018 Legislative Session, the General Assembly enacted the Service Capacity Upgrade Fund (SCUF) (HB 487, Section 139). Money diverted to SCUF is used “solely for acquisition and upgrading of the technology base, program integrity functions, and service delivery capacity in support of the programs administered by the Office of Unemployment Insurance” (KRS 341.243(2)). The Secretary of the Education and Labor Cabinet determines, per Kentucky statute, whether to instate the SCUF rate for any given year.

SCUF is suspended for the 2026 tax year. When SCUF is reinstated on January 1^st, 2027 (per SB 129), your contribution rate will be reduced by 0.0115%. There is no increase or decrease in the total amount of tax you will pay. This reduction will divert 0.0115% of the contributions that would have been applied to your employer reserve account and instead fund SCUF. You may not claim SCUF payments as a credit on your Federal Unemployment Tax filings. See the table below for a summary of recent SCUF rates.

*SB 129 reinstated SCUF rates for 2027, lowered the rate to 0.0115%, and established that annual adjustments may not increase the SCUF rate above 0.025%. SCUF will remain in effect until the fund reaches a capacity of $15 million, or the unemployment Trust Fund balance falls below $811,005,000.

^SCUF contributions were suspended for Q2-Q4 in 2025 and all quarters of 2026 due to the fund meeting the statutory limit of $60 million.

**SCUF contributions were suspended for years 2021 and 2022 due to the Coronavirus pandemic.

Important Updates

SCUF is not in effect for 2026.

SB 129 reinstates SCUF beginning January 1^st, 2027. The SCUF charge will reduce contribution rates by 0.0115% and will continue until the fund reaches a capacity of $15 million, or the unemployment Trust Fund balance falls below $811,005,000. The SCUF charge will not be retroactive to 2026.

Example of SCUF Rate Reductions for 2027

Tax Rate Schedules

In certain cases, making a voluntary contribution payment (i.e., a payment in addition to assessed unemployment tax) will positively impact an employer’s contribution rate. This calculator helps you determine the amount necessary to achieve a desired contribution rate. Based on information supplied, it will also aid in determining whether a voluntary payment will ultimately result in savings or loss.

This tool is for informational purposes only and does not change the reporting or payment requirements of the user. Voluntary payments are governed by KRS 341.530 (6).

1. In the box “Current Tax Information,” enter the reserve balance and enter the reserve balance and taxable payroll from your Notice of Contribution Rate.
2. In the box "Future Tax Information," select the desired tax rate.
3. Enter the "Estimated Taxable Payroll for Rate Year." This figure represents the taxable wages you expect to have in the year the contribution rate is effective; consider the taxable wage base for that year when calculating this figure. Click here [update link when live] for taxable wage base information.
4. Click "Calculate".

Click here to proceed to Voluntary Payments Calculator

The "Voluntary Payment" number is the amount required to achieve the desired contribution rate you selected. The "Taxes at Current Rate" number is the amount of taxes (contributions) you will pay at the contribution rate assigned on your Notice of Contribution Rate if no voluntary payments are made. “Taxes at Current Rate” is based on the estimated taxable payroll you entered. "Taxes at New Rate + Voluntary Payment" is the amount of contributions you will pay at the desired contribution rate selected, added to the voluntary payment amount required to achieve that contribution rate.

The last line, labeled "Estimated Savings" or "Estimated Loss," is the amount of money you will save or lose by making a voluntary payment to achieve a lower tax rate. Loss happens when the "Taxes at New Rate + Voluntary Payment" is greater than "Taxes at Current Rate," meaning it costs less to pay contributions at the original rate than to make a voluntary payment and then pay contributions at the new lower rate. These calculations are based on the estimated taxable payroll you entered into the calculator.