Kentucky 1099 filing requirements turn on one thing: whether you withheld Kentucky income tax from the payment. If you did, you must report that 1099 to the Kentucky Department of Revenue (DOR) regardless of the dollar amount. If you did not, Kentucky does not want the form, even if the payment was large enough to require a federal 1099. Kentucky also does not participate in the IRS Combined Federal/State Filing Program, so a separate, direct submission to the DOR is required.1Kentucky Department of Revenue. 2025 Specifications for Electronic Submission of 1099 and W2G Tax Information
When You Have to File a 1099 With Kentucky
The federal $600 threshold for nonemployee compensation does not control the Kentucky obligation. A $200 payment with $9 of Kentucky tax withheld triggers a filing requirement. A $50,000 payment with no state withholding does not.1Kentucky Department of Revenue. 2025 Specifications for Electronic Submission of 1099 and W2G Tax Information
The rule applies across the full 1099 series: 1099-NEC for independent contractors, 1099-MISC for rents and royalties, 1099-R for retirement distributions, 1099-INT, 1099-DIV, 1099-G, 1099-K, and W-2G for gambling winnings. The type of income does not change the test. Withholding does.
Payments to nonresidents for work performed inside Kentucky follow the same logic. If Kentucky tax was withheld on that payment, it must be reported.2Department of Revenue. Nonresident Withholding Tax
The Filing Deadline
Kentucky 1099s are due by January 31 of the year following the tax year. Tax year 2025 forms are due January 31, 2026. The deadline covers both the recipient’s copy and the copy filed with the DOR, and it shifts to the next business day when January 31 falls on a weekend or legal holiday.1Kentucky Department of Revenue. 2025 Specifications for Electronic Submission of 1099 and W2G Tax Information
Before filing, verify each recipient’s Taxpayer Identification Number, current address, and the exact amount of Kentucky tax withheld. Getting these right the first time avoids amended filings.
How to File
Kentucky no longer accepts paper 1099s. Paper forms mailed to the DOR will not be processed and will not be considered filed, which means a business that sends paper thinking it has complied will be treated as though it never filed.1Kentucky Department of Revenue. 2025 Specifications for Electronic Submission of 1099 and W2G Tax Information
Your method depends on volume. Kentucky regulation 103 KAR 18:050(4) draws the line at 26 statements. Count W-2s, 1099s, and W-2Gs together.3Kentucky Department of Revenue. Withholding Kentucky Income Tax
26 or More Statements: Bulk Electronic File
Larger filers submit an IRS Publication 1220 format file. Kentucky follows the federal specifications but adds state-defined fields in the B Record, and the file should contain only Kentucky payee records. Two channels are available:
- Upload through MyTaxes.ky.gov. Log in, select “Transmitter,” choose “File Bulk Return,” and upload the file. Save the transmission ID as your confirmation.
- Mail a CD in Publication 1220 format with Form 42A806-CD to: Kentucky Department of Revenue, Attn: CD Processing Station 57, 501 High Street, Frankfort, KY 40601.4Department of Revenue. E-file and Payment Options
Bulk filers also submit Form 42A806, the Transmitter Report for Filing Kentucky W2/K2, 1099, and W-2G Statements, as a cover sheet. It captures the withholding account name and phone, statement type, six-digit Kentucky withholding account number, tax year, number of Kentucky statements, total Kentucky wages or distributions, total Kentucky tax withheld, and transmitter contact information. The totals on Form 42A806 must match the underlying file; discrepancies invite DOR inquiries.5Commonwealth of Kentucky, DEPARTMENT OF REVENUE. Transmitter Report for Filing Kentucky W2/K2, 1099 and W-2G Statements
If you file electronically, you do not also file Form K-5.
Fewer Than 26 Statements: Form K-5
Smaller filers can use Form K-5 instead of preparing a bulk file. Two ways to submit it:
- Online through MyTaxes.ky.gov. Click “Transactions,” select “File A Form,” choose your reconciliation account, and select “K-5.” Calculate, submit, and print a copy for your records. Do not mail the printed version if you submitted online.6Department of Revenue. Employer Payroll Withholding
- Fill in the K-5 form, print it, and mail it to the DOR. This option is only available if you are reporting fewer than 26 statements.3Kentucky Department of Revenue. Withholding Kentucky Income Tax
Get a Kentucky Withholding Account First
Every filing is tied to a six-digit Kentucky withholding account number. If you don’t have one, you can’t file. Register through the Kentucky Tax Registration Application at MyTaxes.ky.gov. A paper Form 10A100 is also available, but paper applications can take up to three weeks to process. The DOR registration line is (502) 564-3306.7Kentucky Department of Revenue. Business Registration
Correcting a Filed 1099
Start at the federal level. Issue a corrected 1099 to the recipient with the “corrected” box checked. That corrected form is the basis for your state amendment.
The DOR accepts corrected 1099 returns electronically through MyTaxes.ky.gov; select the 1099 option in the portal. If the original submission was on CD, prepare a corrected Publication 1220 file and resubmit. File the correction as soon as you discover the error, and keep copies of both the original and corrected forms, federal and state.
Penalties and Interest for Late or Missing Filings
Kentucky penalties are separate from any federal penalties the IRS assesses. The failure-to-file penalty is 5% of the estimated tax due for each 30-day period, or fraction of a period, the return goes unfiled. It caps at 50% of the tax assessed, with a minimum penalty of $100 even if little or no tax was due.8Department of Revenue. Penalties, Interest and Fees
Two additional penalties can apply on top of the failure-to-file penalty:
- Negligence penalty of 10% of the tax assessed when the DOR determines the failure resulted from negligence. No cap and no minimum.
- Fraud penalty of 50% of the tax assessed when the failure was fraudulent. No cap and no minimum.
Interest also accrues on unpaid tax. For calendar year 2026, the DOR’s statutory interest rate is 9% on the unpaid balance.8Department of Revenue. Penalties, Interest and Fees
Even when the withholding on a single 1099 is small, the $100 minimum makes on-time filing worth it. And because paper 1099s are not considered filed, a business that mails paper forms is exposed to the same penalties as a business that never filed at all.
What to Keep and for How Long
Kentucky’s records retention schedule calls for keeping transmittal documents at least three years or until after an audit is completed, whichever is longer. Individual and partnership tax return files that include 1099 data carry a five-year retention period. Keeping all 1099 records and transmittal forms for five years covers both.
Store your MyTaxes.ky.gov transmission ID with copies of the original and any corrected 1099s. If the DOR ever disputes whether you filed, that transmission ID is your proof.