Kentucky employers file Form UI-3, the Employer’s Quarterly Contribution Report, electronically through the KEWES portal at kewes.ky.gov to report wages and pay state unemployment insurance tax each quarter. Kentucky Administrative Regulation 787 KAR 1:220 requires electronic filing for all covered employers, and Kentucky Form UI-3 quarterly filing is due by the last day of the month following each calendar quarter.1Kentucky Legislative Research Commission. Kentucky Administrative Regulation 787 KAR 1:220 – Required Reports and Due Dates For 2026, the taxable wage base is $12,000 per employee and contribution rates follow Rate Schedule A.2Kentucky Career Center. Kentucky Unemployment Insurance Self-Service Web
Who Has to File
Under KRS 341.070, a business becomes a covered employer once it hits either of two thresholds during a calendar year: paying $1,500 or more in total wages in any single calendar quarter, or employing at least one person for any part of a day in 20 different weeks.3Kentucky Legislative Research Commission. Kentucky Revised Statutes 341.070 – Subject Employer Once you cross either line, the obligation to file quarterly reports is permanent, and it continues through quarters when you have no employees at all.4Kentucky Career Center. Unemployment Insurance Employer Guide
If you buy another Kentucky employer’s business, you may also step into their unemployment account as a successor under KRS 341.540, inheriting their reserve balance and benefit charge history. A nonsubject employer that becomes a successor has 45 days after hiring personnel to apply to the Office of Unemployment Insurance to establish an account.5FindLaw. Kentucky Revised Statutes 341.540
2026 Wage Base and Tax Rates
You owe Kentucky unemployment tax only on the first $12,000 each employee earns during the calendar year. Anything above that for the same worker is “excess wages” — reported on the UI-3 but not taxed.2Kentucky Career Center. Kentucky Unemployment Insurance Self-Service Web
Your specific tax rate depends on your experience rating, which reflects benefits charged against your account compared with taxes you’ve paid. Kentucky is using Rate Schedule A for 2026. Newly registered employers without an experience record are assigned an initial rate of 2.70%. Once you have enough history to establish a reserve ratio, your rate adjusts from there. Your rate notice may also include a trust-fund surcharge on top of the base rate. Check your latest rate notice or log into KEWES to confirm the exact percentage before calculating what you owe.
What to Have Ready Before You File
Gather this information for the quarter you’re reporting before logging in:
- Your eight-digit Kentucky Employer Identification Number (KEIN), formatted as 00123456.6Kentucky Career Center. Electronic Wage and Tax Reporting Specifications
- Your nine-digit Federal Employer Identification Number (FEIN).
- Total gross wages paid to all employees during the quarter, before deductions.
- Taxable wages: the portion of each employee’s year-to-date earnings that still falls within the $12,000 base.
- Excess wages: gross minus taxable.
- Each employee’s legal name, full Social Security number, and individual wages for the quarter.
The taxable-versus-excess split is where most filers slip. You have to track each employee’s cumulative earnings across the calendar year, not just the current quarter. An employee who earned $10,000 in Q1 and $5,000 in Q2 has only $2,000 in taxable wages for Q2 (the remainder up to $12,000), with $3,000 as excess.
Filing Through KEWES
Log in at kewes.ky.gov using your eight-digit KEIN (or your TPA number if a third-party administrator files for you) and the PIN assigned by the Office of Unemployment Insurance or the password you set up during registration.6Kentucky Career Center. Electronic Wage and Tax Reporting Specifications
You can key wage and tax data directly into the site or upload a file. Batch uploads are also available for third-party administrators handling multiple employers. KEWES reconciles your summary totals against the individual employee records you provide, so mismatches surface before you submit. Review the confirmation screen carefully. Once a report is submitted, fixing an error means filing an amended report.
Due Dates
The schedule repeats every year:
- Q1 (January–March): due April 30
- Q2 (April–June): due July 31
- Q3 (July–September): due October 31
- Q4 (October–December): due January 31
New employers who receive their first liability notice mid-quarter have until the last day of the month following that quarter to file their initial report.1Kentucky Legislative Research Commission. Kentucky Administrative Regulation 787 KAR 1:220 – Required Reports and Due Dates
How to Pay
After submitting the report, pay through the KEWES payment portal. Electronic Funds Transfer (EFT) is accepted at no additional cost. Visa, Mastercard, American Express, and Discover are also accepted, but card payments carry a nonrefundable processing fee of 3.5% of the payment amount.7Kentucky Office of Unemployment Insurance. Payment for – KEWES Save or print the payment confirmation as your proof of timely filing.
Zero Reports When You Have No Payroll
Once your account is active, you have to file every quarter, even if you paid no wages. Kentucky requires a “zero report” for any inactive quarter, and skipping it triggers a delinquency notice and the same late-filing penalties that apply to regular reports.4Kentucky Career Center. Unemployment Insurance Employer Guide If you don’t plan to hire again, close the account through KEWES rather than filing empty reports indefinitely.
Late Penalties and Interest
Late-filing penalties apply whether or not you owe tax for the quarter. File within 30 days after the due date and the penalty is $25. File more than 30 days late and it rises to $75. Each additional late report within the same calendar year adds $100. The maximum penalty for a full year of late reports is $600.4Kentucky Career Center. Unemployment Insurance Employer Guide
Interest runs separately on any unpaid tax, surcharge, or special contribution at 1.5% per month or any fraction of a month. The Office can assess interest going back up to five years from the original due date, so the interest on a long-delinquent balance can reach 90% of the tax owed.4Kentucky Career Center. Unemployment Insurance Employer Guide Repeated late filings can also affect your experience rating and push your rate higher in future years.
Fixing an Error After You File
If you discover a mistake after submission — a wrong Social Security number, misallocated wages, an incorrect total — file an amended report through KEWES. If you’re not sure whether the correction requires a full amended filing or a simpler adjustment, contact the Office of Unemployment Insurance before filing anything.
Closing Your Account
When the business closes, is sold, or stops having employees for the long term, close the unemployment account through KEWES rather than filing zero reports indefinitely. The closure form asks for your business name, the reason for closing (business closed with no successor, business open but no employees, sold or transferred, or other), a contact person, and the closing date.8Kentucky Career Center. Close User Account – KEWES You’ll usually still owe a final quarterly report covering any wages paid before the closing date, and if you sold the business, the buyer may qualify as a successor employer under KRS 341.540 and inherit your experience rating.
How Long to Keep Records
Kentucky Administrative Regulation 787 KAR 1:180 requires employers to keep records related to covered employment for at least six years, and worker-specific records (pay details, hours, and similar data) for at least two years.9Cornell Law Institute. 787 KAR 1:180 – Employer’s Records The IRS requires employment tax records for at least four years after filing the fourth-quarter return.10Internal Revenue Service. Employment Tax Recordkeeping Meeting Kentucky’s six-year rule covers both.
Report Employees, Not Contractors
Only workers who are employees belong on the UI-3. The IRS evaluates three categories of evidence when determining worker status: behavioral control (whether you direct what the worker does and how they do it), financial control (how the worker is paid, whether expenses are reimbursed, who provides tools), and the nature of the relationship (written contracts, benefits, permanence).11Internal Revenue Service. Independent Contractor (Self-Employed) or Employee? No single factor controls, and the IRS says there is no set number of factors that settles the question. Misclassifying employees as contractors means underreported wages on the UI-3, and when the state catches the error, you’ll owe back taxes plus penalties and interest, and your experience rating can be adjusted retroactively.
Why On-Time Matters for FUTA
State unemployment taxes and the federal unemployment tax (FUTA) are linked. Federal Form 940 imposes a 6.0% tax on the first $7,000 of each employee’s wages, but employers who pay their state unemployment taxes in full and on time receive a credit of up to 5.4%, cutting the effective FUTA rate to 0.6%.12U.S. Department of Labor. FUTA Credit Reductions States with unpaid federal trust fund loans can lose part of that credit. Paying your Kentucky UI-3 tax on time protects the federal credit as well.