Accounting, Payroll & Pension Issues/401k from bonus payments

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Expert: - 12/8/2009


Question
Hello.  I was wondering if you could tell me if taking 401k deductions from bonus payments from associates who live in Kentucky is acceptable?  I do payroll for a company based in St. Louis, MO and we take 401k deductions from all wages (if they have signed up for the contribution) - including bonus.  One of our associates in KY says that it is against the law in KY to take 401k deductions from bonus payments.  He is paid bi-weekly - regular salary plus a bonus each quarter.  Is this incorrect to take 401k deduction from his bonus amount because he resides in KY?  I searched on the KY DOR website but could find nothing on this subject.  If this is correct, where can I find info to back it up?
Thank you very much for your assistance.

Answer
I don't know of any law that says you cannot take 401K payments from bonus checks in the state of Kentucky.  There is nothing on the website and I have heard nothing about this.

Make him show you the law pertaining to this or let it go if he cannot. If he comes up with something check it out.

Shirley

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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