Kentucky 74A118 PDF Template

1. What is the Kentucky 74A118 form?

   The Kentucky 74A118 form is a Monthly Insurance Surcharge Report mandated by the Commonwealth of Kentucky's Department of Revenue for domestic, foreign, and alien insurers, excluding those providing life and health insurance. This report, required for each period post-April 1, 2010, involves documenting and remitting surcharges collected from policyholders on various insurance premiums, assessments, and charges, with certain exemptions outlined by the state.

2. Who needs to file the Kentucky 74A118 form?

   All insurance providers operating within Kentucky, apart from those exclusively offering life and health insurance, must file the 74A118 form. This requirement applies regardless of whether premiums have been collected during the reporting period. Insurers must ensure the surcharge is collected alongside premiums or other charges and fully remitted to the Department of Revenue accordingly.

3. What types of premiums are subject to the Kentucky insurance premium surcharge?

   Premiums that are subject to the surcharge include most charges collected on risks located in Kentucky, with notable exclusions. These exclusions comprise premiums returned on terminated policies, accident and health insurance, federal insured crop and flood insurance, reinsurance, title insurance, workers' compensation, and premiums collected from certain government and nonprofit entities. Hence, much of the traditional insurance premium landscape falls under this surcharge's purview.

4. How is the amount subject to surcharge calculated?

   To calculate the amount subject to surcharge, insurers aggregate all premiums, assessments, and other charges collected. From this total, deductions are made for specific non-surchargeable items and exemptions such as returned premiums, accident and health insurance, and others mentioned previously. The resulting figure represents the surchargeable amount, which is then multiplied by the current surcharge rate to determine the surcharge due.

5. What penalties are associated with late filing or payment?

   • Failure to file the report by its due date results in a penalty of 2% of the surcharge due for each 30-day period or fraction thereof, up to a maximum of 20%. The minimum penalty is $10.
   • A similar 2% penalty applies for late payments, also with a 20% cap and a $10 minimum.
   • Interest accrues on unpaid surcharges from the original due date until payment is made, at the "tax increase rate."

   These penalties underscore the importance of timely reporting and payment to avoid additional financial liabilities.

6. Are any policyholders exempt from the insurance premium surcharge?

   Yes, certain policyholders are wholly or partially exempt from the surcharge. Exemptions are granted to the federal government, resident educational and charitable institutions with Section 501(c)(3) status, resident nonprofit religious institutions for specific property coverage, state government for real property coverage, and local governments for the same. Additionally, specific insurance types, such as life and health insurance, receive automatic exemption from the surcharge.

7. How should adjustments be reported on the Kentucky 74A118 form?

   Adjustments to the surcharge report require supporting documentation and are entered on the form to reflect either an increase or decrease in the total amount due. These adjustments often relate to previously reported figures that have since changed due to various factors like returned premiums or corrections of previously reported amounts. Proper documentation ensures the accuracy and integrity of the surcharge reporting process.

When completing the Kentucky 74A118 form, there are common mistakes that individuals often make, leading to inaccuracies and potential penalties. Understanding these errors can help ensure the form is filled out correctly and submitted on time.

One major mistake is not reporting accurate premium amounts on line 1. This figure should include all premiums, assessments, and other charges collected on risks located in Kentucky, excluding municipal taxes. However, individuals sometimes report incorrect totals either by oversight or misunderstanding of what needs to be included.

Another error involves incorrect deductions on lines 2A through 2C. These lines are designed for deducting amounts not subject to surcharge, such as premiums returned on terminated policies or collected for exempt categories like accident and health insurance. Mistakenly including ineligible deductions or miscalculating these amounts can lead to an incorrect surcharge calculation.

Filing the form without checking if it's an amended return also leads to complications. If corrections are necessary after initial submission, the box indicating an amended return must be checked to alert the Department of Revenue to the revision. Failing to do so can cause confusion and delays in processing.

There is also the mistake of neglecting to include the confirmation number for online payments. If payment is made online, this confirmation number provides proof of payment and should be included on the form. Omitting this information might result in unrecognized payments.

Incorrectly filling out the principal officer’s and preparer's information sections with incomplete or inaccurate details can also result in processing delays. The signature, print name, title, telephone number, and email address of both the principal officer and the preparer are critical for verification and communication purposes.

Forgetting to calculate penalties and interest correctly is another oversight. If the form or payment is submitted late, additional charges apply. The specifics for calculating these amounts are provided on the form, but they are often overlooked or misunderstood, leading to incorrect totals on lines 5 and 6.

By paying close attention to these details, individuals can avoid common mistakes and ensure their Kentucky 74A118 forms are accurately completed and duly processed.

When dealing with the Kentucky 74A118 form, commonly used for Monthly Insurance Surcharge Reports, several other forms and documents are often required to complete insurance-related reporting and compliance. These additional documents assist in ensuring the accuracy and completeness of the information provided to the Kentucky Department of Revenue and other regulatory bodies.

• Certificate of Insurance: This document serves as proof of insurance coverage. It outlines the types of coverages held by the entity, including the effective dates, limits of liability, and any special endorsements.
• Insurance Premium Tax Return: This form is used by insurance companies to report premium taxes due to the state. It includes information on total premiums collected, deductions, and the net tax payable.
• NAIC Quarterly Statement: The National Association of Insurance Commissioners (NAIC) requires this financial statement on a quarterly basis. It provides a detailed account of an insurer's financial health, including assets, liabilities, and capital and surplus.
• Amendment Form (if applicable): Should any information submitted on the 74A118 form need correction after initial filing, this document is necessary to correct or update the previously submitted data.
• Power of Attorney: This document authorizes an individual or entity to act on behalf of another in legal or financial matters, which might be necessary for the submission or amendment of insurance-related filings.
• Payment Voucher: Accompanies payment for any surcharges, penalties, or interest due as reported on the 74A118 form. This helps ensure that payments are correctly applied to the appropriate account.

These documents play a significant role in the regulatory and compliance procedures for insurance providers operating in Kentucky. From providing evidence of insurance coverage to correcting previously submitted information and ensuring proper financial reporting, each document supports the overarching goal of transparency and compliance in the insurance industry. Understanding the purpose and requirements of these forms is crucial for any insurance provider to maintain good standing and comply with Kentucky state laws.

The Kentucky 74A118 form, focused on insurance surcharge reporting, shares functional and operational similarities with several other types of regulatory reporting forms across the United States. One such similarity can be found in the New York Quarterly Insurance Premium Tax Form, which requires insurers to report and pay taxes on premiums collected. Both forms serve as a means for state governments to collect taxes or surcharges on insurance premiums, requiring detailed information about premiums collected, adjustments, and exemptions. They are crucial tools for ensuring compliance with state laws regarding insurance taxation.

Similarly, the California Insurance Tax Form, used by the California Department of Tax and Fee Administration, parallels the Kentucky 74A118 form in its purpose of collecting tax-related information from insurance companies. Both forms necessitate the declaration of total premiums collected within the state, detailing exempt premiums and calculating the amount due after adjustments. This ensures that both states maintain a steady revenue stream from the insurance sector, fostering a regulated insurance market.>

Another comparable document is the Texas Premium Tax Form, utilized by the Texas Department of Insurance. Like the Kentucky form, it mandates insurers to report premiums collected, allowing for certain exemptions and adjustments. Both documents play a vital role in the oversight of insurance companies, ensuring they contribute their fair share to state revenues. The structured approach to declaring premiums and calculating dues underlines the importance of transparency and accountability in the insurance industry.

Florida's Insurance Premium Taxes and Fees Return shares a similar foundation with Kentucky's 74A118 form, as both are designed to calculate and collect taxes or surcharges on insurance premiums. They require detailed reporting of all insurance transactions within the state, emphasize compliance with state laws, and support the financial integrity of the state’s insurance system. These forms act as a comprehensive tool for revenue departments to track and manage the collection of insurance-related payments.

Illinois's Insurance Premiums Tax Return is another document that echoes the functionalities of Kentucky's 74A118. Insurers in Illinois, like those in Kentucky, must report on premiums received, highlighting the necessity for companies to maintain meticulous records of their insurance transactions for accurate tax reporting. The emphasis on detailed reporting underscores the states' efforts to ensure a fair and efficient taxation system within the insurance sector.

The Pennsylvania Insurance Premium Tax Return also resembles the Kentucky 74A118 form, particularly in its focus on collecting state revenue from insurance operations. Both states require insurance entities to accurately report their earnings from premiums, adhering to a set of rules and regulations designed to standardize financial obligations across the insurance industry. This parallelism showcases the widespread approach to managing and regulating insurance taxation at the state level.

Similarly, New Jersey's Insurance Premium Tax form aligns with Kentucky’s approach, compelling insurance companies to submit detailed reports on their premium collections for tax purposes. Both forms serve as essential tools for the respective states in enforcing tax laws and regulations, ensuring that insurance companies contribute to the state's economy. The structured reporting requirements reflect the complexity and significance of the insurance market's role in state finances.

The Ohio Commercial Activity Tax (CAT) Return, while broader, shares a core similarity with Kentucky's form in terms of taxing business activities, including insurance. Insurance companies operating in Ohio must account for their premiums when calculating their CAT liability. This demonstrates the broader application of premium-based taxation beyond just the insurance sector, highlighting a unified approach towards taxation of business activities across different states.

These documents, each tailored to the specific requirements of their respective states, collectively illustrate the complexities and similarities in insurance taxation and regulatory reporting across the United States. Despite their variations, the underlying goal remains consistent: to ensure a well-regulated insurance market that contributes fairly to state revenues, promoting economic stability and public welfare.

Completing the Kentucky 74A118 Monthly Insurance Surcharge Report accurately and on time is vital for compliance with state laws. To assist in this process, here are several do's and don'ts to keep in mind:

• Do ensure that all premiums, assessments, and other charges collected on risks located in Kentucky are reported on line 1, excluding municipal taxes.
• Do not include amounts that are not subject to surcharge, such as premiums for accident and health insurance, federal insured crop insurance, and others, in your surcharge calculations.
• Do accurately deduct premiums returned to policyholders on terminated policies, and other non-surchargeable amounts, to arrive at the correct amount subject to surcharge.
• Do not forget to apply the current surcharge rate (.018) on the amount subject to surcharge correctly to calculate the surcharge due.
• Do include any penalties or interest due to late filing or payment on the appropriate lines to ensure your total amount due is accurate.
• Do not overlook attaching supporting documentation for any adjustments made to the amount due.
• Do ensure that the report is signed by a principal officer of the company and that the preparer’s information, if applicable, is completed fully.
• Do not delay in mailing your return with payment to the Kentucky Department of Revenue by the due date to avoid penalties and interest.

Following these guidelines will help ensure that your reporting is compliant, reducing the risk of penalties and ensuring that your commitments to regulatory obligations are met punctually.

Understanding the Kentucky 74A118 form, which relates to the Monthly Insurance Surcharge Report, is crucial for insurers operating within the state. However, several misconceptions often cloud its proper interpretation and application. Addressing these misunderstandings can ensure compliance with state regulations and streamline the reporting process for insurance providers.

• Misconception 1: All insurance premiums are subject to the surcharge. It's a common belief that every premium collected by an insurer in Kentucky is subject to the surcharge. However, the form clearly outlines various exemptions, such as premiums returned to policyholders for terminated policies, specific types of insurance like accident and health, federal insured crop and flood insurance, reinsurance, title insurance, and workers' compensation, among others. Additionally, premiums collected from certain entities, including the federal government, nonprofit institutions, and state or local government for specific property coverage, are also not subject to the surcharge.

• Misconception 2: The surcharge rate is negotiable or variable. The surcharge rate, set at .018 of the premium amount subject to the surcharge, is a fixed rate determined by state law. Insurers and policyholders cannot negotiate this rate. It's applied uniformly across all premiums that fall under the surcharge's scope, ensuring a standard calculation method for all parties involved.

• Misconception 3: Surcharge reports are only filed annually. While the Kentucky 74A118 form does allow insurers with an annual liability of less than $1,000 for each of the previous two calendar years to report on a calendar year basis, most insurers are required to file their surcharge reports monthly. Insurers must submit these reports by the 20th day of the month following the month in which the premiums were collected, highlighting the importance of maintaining regular and accurate monthly records.

• Misconception 4: Only domestic insurers are required to file the surcharge report. The requirement to file the Kentucky 74A118 surcharge report applies to every domestic, foreign, and alien insurer operating within the state, except those exclusively dealing in life and health insurance. This broad applicability ensures that all insurers contributing to risks located in Kentucky adhere to the same reporting standards, fostering a level playing field within the insurance industry.

Clarifying these misconceptions can help insurers better navigate the complexities of the Kentucky 74A118 form and ensure compliance with the Kentucky Department of Revenue's requirements. By understanding the specific exemptions, rate application, reporting frequency, and applicability, insurers can streamline their reporting processes and avoid penalties for inaccuracies or omissions.

Filling out the Kentucky 74A118 Monthly Insurance Surcharge Report can seem like a daunting task, but understanding a few key points can help simplify the process. Here’s what you need to know:

• Who Needs to File: The form must be filed by every domestic, foreign, and alien insurer operating in Kentucky, except those exclusively offering life and health insurance policies. This requirement applies regardless of whether the insurer is subject to Kentucky insurance premium taxes or is exempt from them.
• Filing Frequency: Insurers are required to file this report monthly. However, insurers whose annual liability was less than $1,000 for each of the preceding two calendar years have the option to report and remit on an annual basis by January 20th.
• Due Date: Reports and payments are due by the 20th day of the month following the month being reported. Late filings and payments are subject to penalties and interest.
• Surcharge Calculation: The surcharge is calculated at the current rate (0.018 or 1.8%) on each $100 of premiums, assessments, or other charges, with certain exemptions applied. Premiums not subject to the surcharge include those for specific types of insurance and policyholders, such as accident and health insurance, federal insured crop and flood insurance, reinsurance, title insurance, and premiums collected from certain nonprofit and government entities.
• Penalties: A penalty of 2% of the surcharge due is applied for each 30 days, or fraction thereof, that the report and payment are late, with a maximum penalty of 20%. The minimum penalty is $10. Interest is also applied to late payments.
• Exemptions and Deductions: Certain policyholders and types of insurance are exempt from the surcharge, including policies for life and health insurance, premiums paid for accident and health insurance, and those collected from federal, state, and local government entities under specific conditions. Be sure to carefully review what premiums are not subject to the surcharge and accurately report deductions, such as premiums returned to policyholders upon termination of the policy.
• How to File and Pay: The 74A118 form can be filed online or sent to the Kentucky Department of Revenue by mail, along with the appropriate payment. If paying online, be sure to include the confirmation number on your report. Detailed instructions for calculating and remitting the surcharge are provided on the form itself and further guidance can be obtained directly from the Department of Revenue.

It's crucial for insurers to accurately fill out the form and stay on top of monthly or annual filings to avoid penalties. Ensuring that you understand which premiums are subject to the surcharge, as well as the exemptions and deductions you're entitled to claim, can significantly impact the accuracy of your filing and the total surcharge due. Always double-check your calculations and keep a record of your filings for future reference.