When Is Someone Living In Lexington Not A Resident?

Fayette County employers are required to withhold the 0.5% Fayette County Public Schools Occupational License Fee from compensation of Fayette County residents for work done in Fayette County. Under the applicable ordinance, a resident is a person living in the county who has shown a present intent to make Fayette County his or her permanent place of residence. This definition means that someone living here who does not intend to make Fayette County his permanent residence is not subject to the tax.

Fayette County employers should consider these situations:

• Students from outside Fayette County who are working part-time while attending local colleges and universities.
• Interns from outside Fayette County working at medical facilities, horse farms, veterinary practices, or other businesses.
• Nonresident aliens working at educational institutions, medical facilities, horse farms, and other businesses.

We are aware of one situation in which a non-U.S. citizen has been legally residing in the U.S. for over 30 years, but does not have a "green card," thus remaining a nonresident alien legally, even while being a U.S. resident for income tax purposes. This individual is not considered to be a resident for the purpose of the Fayette County Public Schools Occupational License Fee.

If a Fayette County employer has situations where the local school tax doesn't apply due to the narrow definition of resident, withholding is not required. If an employer has been withholding unnecessarily, the employee can file for refunds. Please let us know if you would like our assistance with this issue.

David Lowe
dlowe@ddfky.com