Live in Washington, Work Remotely for a Kentucky Employer: Who Taxes You?
Answer
Nothing is owed on either side. Washington has no wage income tax, and Kentucky taxes nonresidents only on work actually performed inside Kentucky. Never setting foot in Kentucky keeps the income entirely outside its reach, so this pair produces no state return at all.
Last verified
Wages are sourced to the place where the work is physically performed. That default is what makes remote work simple, and it is only disturbed when the employer's state runs a convenience-of-the-employer rule. Kentucky does not.
Kentucky also has a layer below the state one, and it is the layer that survives every agreement: Kentucky cities, counties and school districts levy occupational licence taxes on wages earned in their jurisdiction. Reciprocity does not reach them, and the home state's credit generally does not either — a reciprocal-state resident working in Kentucky still pays the local tax.
What you file
There is nothing to file in either Washington or Kentucky on these wages. Your federal return is unaffected — the federal government taxes the income whatever the states do.
The two states, side by side
| Washington | Kentucky | |
|---|---|---|
| Taxes wages | No | Yes — flat |
| Reciprocity partners | None | 7 (Form 42A809) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 740-NP |
| Credit for other-state tax | No income tax | Schedule ITC |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | Washington State Department of Revenue | Kentucky Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Kentucky and working in Washington gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Washington → KentuckyWork state only
- 1099 contractor: Washington → KentuckyClient state only, if you work there
- Moved mid-year: Washington → KentuckyOne part-year return — the state you moved to
Other Washington pairs
Questions people actually ask
I live in Washington and work remotely for a Kentucky employer. Which state do I pay?
Nothing is owed on either side. Washington has no wage income tax, and Kentucky taxes nonresidents only on work actually performed inside Kentucky. Never setting foot in Kentucky keeps the income entirely outside its reach, so this pair produces no state return at all.
Which state should my employer be withholding for?
Neither. There is no state income tax to withhold on either side of this pairing, so a state line on your pay stub for Washington or Kentucky is an error worth querying.
Does my Kentucky employer's location alone create a Kentucky tax obligation?
No. Kentucky sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Kentucky are a different matter — those are Kentucky-source income and can require a nonresident return.
How current is this?
The Washington and Kentucky rules on this page were last checked against Washington State Department of Revenue and Kentucky Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Washington State Department of Revenue — individual income taxaccessed 2026-08-07
- Kentucky Department of Revenue — individual income taxaccessed 2026-08-07