CPA for Louisville, KY Clients: Remote Tax, Payroll and Accounting

Our CPA practice is in Naperville, Illinois. Louisville clients work with us remotely, and we keep no Kentucky office. The most distinctive tax here is local. Louisville Metro charges an occupational license tax on wages and business profit earned anywhere in Jefferson County, and regulations that took effect January 1, 2026 spell out how it reaches remote employees. Kentucky's own income tax rate is also stepping down, so 2026 withholding deserves a second look.

Louisville Metro's occupational license tax

The Revenue Commission's regulations split the 2.2% into 1.25% for Metro government, 0.20% for transit and 0.75% for the school boards. Nonresident individuals do not pay the school share, which leaves 1.45%. The tax applies to wages for work done in Louisville Metro, which covers all of Jefferson County, and to the net profit of business activity there. An employee who is physically in Metro more than 5% of the time on the job owes tax on the matching share of wages, figured by days. One who is there 5% of the time or less need not file or pay on that share, and one who is there 95% or more cannot apportion at all.

Owners file too. Every business entity, including a sole proprietor, files an annual net profit return, due April 15 for calendar-year filers, with the federal return attached. An extension can run up to six months, and at least 90% of the tax should be paid with the request to avoid a penalty. Partnerships, S corporations and LLCs file their own return. Entities other than sole proprietors make estimated payments on April 15, June 15, September 15 and December 15 when their net-profit liability exceeds $5,000.

Remote workers, employers and withholding

Employers must withhold on wages for services performed in Louisville Metro, wherever the payment is made. The 2026 regulations say an employer has tax nexus if 10% or more of its employees work remotely in Metro, or if pay to those employees exceeds $75,000 in the year, and that it must withhold and remit even without nexus. A company based elsewhere with one telecommuter working in Jefferson County should check its registration.

Quarterly withholding returns are due April 30, July 31, October 31 and January 31. An employer whose withholding exceeds $3,000 in any one of the preceding four quarters pays monthly, by the 15th of the next month. Kentucky's own filings are separate: employers must furnish W-2s by January 31, and quarterly filers use electronic filing. See our guides to local payroll taxes and multi-state payroll.

Kentucky income tax and Southern Indiana commuters

Under House Bill 1 of the 2025 session, Kentucky's flat rate is 4% for taxable years beginning before January 1, 2026, and 3.5% for taxable years beginning on or after that date. The Department of Revenue's March 2026 employer instructions use the 3.5% rate, with an annually adjusted standard deduction and no personal exemptions. That makes 2025 and 2026 returns different, so check the year before you compare numbers.

An employee who works in Kentucky but lives in Illinois, Indiana, Michigan, West Virginia, Wisconsin, Virginia (and commutes daily) or Ohio (unless a shareholder-employee with 20% or more) can be exempt from Kentucky withholding. That exemption is from Kentucky income tax withholding. The Metro regulations separately tax wages for work done in Louisville Metro for resident and nonresident employees, so a Southern Indiana resident working downtown should still expect the 1.45% local tax. Our Kentucky page covers the rest of the state rules.

Jefferson County property: the PVA calendar

Jefferson County's Property Valuation Administrator (PVA) assesses property as of January 1. The 2026 calendar had an online conference with the PVA from April 24 to May 18, public inspection of the roll from May 4 to May 18, tangible property returns due May 15 and a June 12 deadline to appeal to the Local Board of Assessment Appeals. Tax bills are scheduled to be mailed November 1, 2026, with a discount for paying by December 1 and full payment due by December 31. The PVA lists a 5% penalty for payment in January, and 10% plus a 10% sheriff's fee after January 31.

The homestead exemption is $49,100 for 2025-2026 for owners age 65 or older who own and occupy the home as a primary residence as of January 1. Once approved, you do not need to reapply each year, but you must tell the PVA if you move.

Healthcare and logistics workers

Hospital staff, physicians, warehouse workers, drivers and air-cargo employees share one pattern: pay earned in Jefferson County, sometimes by people who live across the river in Indiana. Metro apportions wages by days on the job in Metro, so employees who travel, take locum shifts or work across the river should keep a day log and check what their employer withholds. See truckers and transportation and physicians and healthcare professionals.

The Indian-American community and US-India tax in Louisville

The Louisville/Jefferson County, KY-IN metro area has about 10,150 residents who report Asian Indian alone or in any combination, about 0.7% of the population, and Jefferson County, Kentucky has about 8,400 (1.1%), according to the American Community Survey 2020 to 2024 5-year, Table B02018. Kentucky is assigned to the Embassy of India in Washington, DC under the revised list that took effect July 15, 2025. Typical issues for Louisville households:

• Physicians and nurses on H-1B or J-1 visas; see residency and dual-status rules.
• Small-business owners who send or receive family money across the border; see gifts and inheritance from India and, for the business side, convenience stores, gas stations and motels.
• Provident fund balances; see our EPF guide.
• Selling family property in India; the property sale guide walks through reporting, and treaty relief is covered in the US-India tax treaty guide.

How we can help

Louisville engagements run through secure upload, phone and video. We prepare federal and Kentucky returns, among them part-year and nonresident filings, review Metro net profit returns and withholding, and set up payroll that handles state and Metro tax together. When a task needs a Kentucky-licensed professional, or someone to attend a Local Board of Assessment Appeals hearing in person, we will tell you.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.