Kentucky Form 74A118 is the Monthly Insurance Surcharge Report used to report and pay the insurance premium surcharge collected on qualifying insurance risks located in Kentucky. It generally applies to domestic, foreign, and alien insurers other than life and health insurers, including insurers that are subject to or exempt from certain Kentucky insurance premium taxes. The surcharge is collected from policyholders when the insurer collects the related premium, assessment, or other insurance charge. The report begins with all qualifying premiums, assessments, finance charges, service charges, and similar amounts collected during the reporting period. It then removes returned premiums and amounts that are not subject to the surcharge, such as qualifying accident and health insurance premiums, federally insured crop and flood insurance premiums, reinsurance, title insurance, workers’ compensation insurance, and premiums collected from certain exempt policyholders. The remaining amount is multiplied by 1.8%, or 0.018, to calculate the surcharge due. Penalties, interest, and supported adjustments are then included to determine the final amount payable. Most insurers file monthly by the 20th day of the following month, although certain insurers with low annual surcharge liabilities may qualify to report annually. A report is required for every filing period, even when no premiums were collected and no surcharge is due.
Who Must File Form 74A118?
The report generally must be filed by every domestic, foreign, or alien insurer that:
- Is not classified as a life and health insurer
- Collects premiums, assessments, or other charges on insurance risks located in Kentucky
- Is subject to, or exempt from, Kentucky insurance premium taxes under the applicable statutes
- Collects surplus lines premiums as a broker or agency
- Has an established monthly or annual Kentucky insurance surcharge filing requirement
A filing is required for each assigned reporting period, including a period in which the insurer collected no premiums.
What Should Be Gathered Before Completing The Report?
Collect the following information before starting:
- The month and year being reported
- The insurer’s legal name and complete address
- The insurer’s FEIN
- The applicable NAIC number
- Total Kentucky premiums collected
- Assessments and other insurance charges collected
- Finance and service charges
- Premiums returned on terminated policies
- Premiums from exempt insurance categories
- Premiums collected from exempt or partially exempt policyholders
- Prior adjustments and supporting records
- Penalty and interest calculations, when applicable
- Online payment confirmation, if payment was made electronically
- The principal officer’s information
- The preparer’s information
Use amounts actually collected during the reporting period. Do not report billed premiums that have not yet been collected on Line 1a.
When Is Form 74A118 Due?
Monthly Filers
Monthly reports and payments are due on or before the 20th day of the month following the reporting period.
For example, surcharge amounts collected during May are generally reported and paid by June 20.
The report covers the immediately preceding monthly accounting period.
Annual Filers
An insurer may qualify to report annually when its annual surcharge liability was less than $1,000 in each of the previous two calendar years.
A qualifying annual filer must report and remit the surcharge collected during the calendar year on or before January 20 of the following year.
Do not switch from monthly to annual filing solely because the current period’s liability is small. The insurer must satisfy the prior-two-year liability requirement.
Zero-Activity Periods
File the report even when:
- No premiums were collected
- No surcharge was collected
- All collected premiums were exempt
- Deductions reduce the taxable amount to zero
- The insurer had no Kentucky activity during the assigned period
Enter zeros where appropriate instead of leaving required amount fields unexplained.
How To File Form 74A118
Filing With A Check
When paying by check:
- Complete all identification and calculation fields.
- Sign the report.
- Make the check payable to the Kentucky State Treasurer.
- Include supporting documents for any adjustments.
- Mail the report and payment to the Kentucky Department of Revenue.
Use the regular mailing address:
Kentucky Department of Revenue
P.O. Box 1303
Frankfort, KY 40602-1303
Filing By Overnight Delivery
For overnight or courier delivery, use:
Kentucky Department of Revenue
501 High Street
Frankfort, KY 40601-2103
Do not send an overnight delivery to the post office box.
Filing After Paying Online
When the surcharge is paid electronically:
- Check the Paid Online box.
- Enter the payment confirmation number.
- Attach the Payment Schedule Confirmation page.
- Submit the report and confirmation page to either the regular mailing address or the overnight address.
An online payment does not replace the requirement to submit the completed report.
Keep Filing Records
Retain a copy of:
- The completed report
- Payment confirmation or canceled check
- Premium collection records
- Returned-premium records
- Exemption documentation
- Adjustment calculations
- Supporting correspondence
These records should show how every amount on the report was determined.
How To Complete Kentucky Form 74A118
Header Information
Form Number And Revision
The identification in the upper-left corner shows that the document is Kentucky Form 74A118 and identifies its revision date.
This information is already printed and does not require an entry.
Monthly Insurance Surcharge Report
The main heading identifies the report’s purpose.
It is used to calculate the Kentucky surcharge on qualifying insurance premiums and related charges.
Periods Beginning April 1, 2010, And After
This statement identifies the periods for which this version of the surcharge reporting structure applies.
Do not enter anything on this line.
Official Use Only Section
The upper-right box is reserved for the Kentucky Department of Revenue.
Tax Code
The printed tax code is used for Department processing.
Do not alter or complete it.
Month And Year Coding
The internal month and year spaces in the official-use box are intended for Department processing.
The taxpayer should report the filing period in the separate “Report for Month of” field.
Account Number
The account-number line inside the official-use box is reserved for Department use.
Leave it blank unless the Department specifically instructs you to enter an account number there.
Taxpayer Identification Area
Name And Address
Enter the insurer’s or surplus lines agency’s complete legal name and current mailing address.
Include:
- Legal company or agency name
- Street address or post office box
- City
- State
- ZIP Code
This field is required. Use information that matches the entity’s Kentucky tax account.
Amended Return Checkbox
Check this box when correcting a report previously submitted for the same month and year.
An amended report may be needed when:
- Premiums were omitted
- Exempt premiums were reported incorrectly
- Returned premiums were entered incorrectly
- The surcharge calculation was wrong
- A payment was applied incorrectly
- An adjustment was not included
- Identification information was inaccurate
Enter the corrected amounts for the entire reporting period, not merely the difference, unless the Department directs otherwise.
Attach an explanation and supporting records when the correction affects the amount due.
Surplus Lines Checkbox
Check this box when the report is being filed for surplus lines business.
Use the agency and identification rules applicable to the broker arrangement.
Multi-Broker Surplus Lines Filings
A multi-broker operation should file under the agency’s name and FEIN.
Do not file separately under each individual broker when the agency is the responsible reporting entity.
Single-Broker Surplus Lines Filings
A single broker should also file under the agency name and FEIN.
When no FEIN exists, use the broker’s Department of Insurance number as instructed.
Report For Month Of
Enter the month and year covered by the report.
Use the two-digit month and four-digit year format shown in the boxes.
For example, for June 2026, enter:
06/2026
Report only activity belonging to that accounting period.
NAIC
Enter the insurer’s applicable National Association of Insurance Commissioners identification number.
Use the number associated with the company named in the name-and-address section.
A surplus lines filer should use the identifier required for its reporting arrangement.
FEIN
Enter the entity’s nine-digit federal employer identification number.
Use the FEIN belonging to the insurer or surplus lines agency filing the report.
Do not enter an officer’s Social Security number.
Line 1: Total Premiums, Assessments, And Other Charges
Line 1 gathers the gross amounts collected before subtracting items that are not subject to the surcharge.
Line 1a: Total Premiums, Assessments, And Other Charges
Enter the total premiums, assessments, and other qualifying charges actually collected on risks located in Kentucky during the reporting period.
Include premiums that will later be deducted as exempt amounts on Lines 2b and 2c. Starting with the full collected amount allows the exempt categories to be shown separately.
Do not include:
- Municipal premium taxes
- Finance charges
- Service charges
Finance and service charges are reported separately on Line 1b.
Report only collected amounts. Do not include amounts that were merely billed, invoiced, accrued, or expected but not received.
Line 1b: Finance And Service Charges
Enter finance charges and service charges collected in connection with the Kentucky insurance coverage.
These charges must be reported separately from the premiums on Line 1a.
Do not omit them because they were described as fees rather than premiums.
Line 1c: Total Collected Charges
Add Lines 1a and 1b.
Use this formula:
Line 1a + Line 1b = Line 1c
Line 1c represents the total collected premiums, assessments, finance charges, service charges, and other included amounts before allowable exclusions.
Line 2: Amounts Not Subject To The Surcharge
Line 2 removes qualifying returned premiums and exempt amounts from the gross total on Line 1c.
Do not deduct an amount unless it belongs to one of the listed categories and can be supported by the insurer’s records.
Line 2a: Premiums Returned On Terminated Policies
Enter premiums returned to policyholders because the related policies were terminated by the insured or insurer.
A deduction is allowed only when the premium was actually returned and the related surcharge was also returned to the policyholder.
Do not use this line for:
- Exempt premiums
- General credits unrelated to terminated policies
- Accounting write-offs
- Claim payments
- Premium adjustments that were never refunded
- Workers’ compensation premiums merely because they are exempt
Requests for refunds or credits must be submitted in writing.
Line 2b: Premiums Collected For Exempt Insurance Types
Report each exempt insurance category separately on Lines b1 through b6.
Line 2b1: Accident And Health Insurance
Enter premiums collected for accident and health insurance.
These premiums are not subject to the Kentucky insurance premium surcharge.
Do not place unrelated life insurance premiums on this line.
Line 2b2: Federally Insured Crop Insurance
Enter premiums collected for crop insurance covered by the applicable federal insurance program.
Keep records identifying the policies as federally insured crop coverage.
Line 2b3: Federally Insured Flood Insurance
Enter premiums collected for federally insured flood insurance.
Do not include private flood coverage unless it qualifies under the listed exemption.
Line 2b4: Reinsurance
Enter premiums collected for reinsurance.
This line applies to reinsurance premiums that are exempt from the surcharge.
Line 2b5: Title Insurance
Enter premiums collected for title insurance.
Do not combine title insurance premiums with unrelated property insurance.
Line 2b6: Workers’ Compensation
Enter premiums collected for workers’ compensation insurance.
Workers’ compensation premiums are exempt from the surcharge and should be reported here rather than treated as returned premiums.
Line 2b: Total Exempt Insurance Premiums
Add Lines b1 through b6.
Use this formula:
b1 + b2 + b3 + b4 + b5 + b6 = Line 2b
Check the addition carefully and make sure no premium amount is counted in more than one category.
Line 2c: Premiums Collected From Exempt Policyholders
Report premiums collected from qualifying exempt or partially exempt policyholders on Lines c1 through c4.
The exemption may depend on both the policyholder’s status and the type of property covered.
Line 2c1: Federal Government
Enter premiums collected directly from the federal government.
The federal government is an exempt policyholder for purposes of this surcharge.
Do not treat a private contractor as the federal government merely because the contractor performs government work.
Line 2c2: Resident Nonprofit Educational And Charitable Institutions
Enter qualifying premiums collected from resident nonprofit educational and charitable institutions recognized under Section 501(c)(3) of the Internal Revenue Code.
Keep documentation showing:
- The organization is a resident institution
- It has qualifying nonprofit status
- The policyholder named on the policy is the exempt institution
Line 2c3: Resident Nonprofit Religious Institutions
Enter qualifying premiums collected from resident nonprofit religious institutions, but only for coverage of:
- Real property
- Tangible property
- Intangible property
Do not deduct premiums for other types of coverage unless another exemption applies.
Line 2c4: State And Local Government
Enter qualifying premiums collected from state or local government for coverage of real property.
The exemption on this line is limited to the specified real property coverage.
Do not deduct all government-related premiums automatically.
Line 2c: Total Premiums From Exempt Policyholders
Add Lines c1 through c4.
Use this formula:
c1 + c2 + c3 + c4 = Line 2c
Make sure each amount qualifies under the specific policyholder and coverage restrictions.
Line 2d: Total Amount Not Subject To Surcharge
Add the returned premiums and both categories of exempt premiums.
Use this formula:
Line 2a + Line 2b + Line 2c = Line 2d
This is the total amount removed from gross collections before calculating the surcharge.
Do not include Line 1b again or subtract an item twice.
Line 3: Amount Subject To Surcharge
Subtract Line 2d from Line 1c.
Use this formula:
Line 1c − Line 2d = Line 3
Line 3 is the net amount subject to the Kentucky insurance premium surcharge.
When Line 2d equals Line 1c, enter zero.
Review the entries if the calculation produces a negative amount. A negative result may indicate that amounts were duplicated, assigned to the wrong reporting period, or entered incorrectly.
Line 4: Surcharge Due At The Current Rate
Multiply Line 3 by 1.8%, expressed as 0.018.
Use this formula:
Line 3 × 0.018 = Line 4
For example, when Line 3 is $100,000:
$100,000 × 0.018 = $1,800
Enter the calculated surcharge on Line 4.
The insurer must collect the surcharge from policyholders at the same time and in the same manner as the related premium or insurance charge.
The insurer and its agents may not keep any portion of the surcharge as a collection fee or commission.
Line 5: Penalty
Enter any applicable late-filing or late-payment penalty.
Late-Filing Penalty
The penalty for filing after the due date is 2% of the surcharge due for each 30-day period, or part of a 30-day period, that the report is late.
The maximum late-filing penalty is 20% of the surcharge due.
The minimum penalty is $10.
Late-Payment Penalty
The penalty for paying after the due date is also 2% of the unpaid surcharge for each 30-day period, or part of a 30-day period, that the payment remains overdue.
The maximum late-payment penalty is 20%.
The minimum penalty is $10.
More than one type of penalty may apply when both the report and payment are late. Enter the amount applicable to the filing circumstances.
Line 6: Interest
Enter interest on any surcharge liability not paid by the original due date.
Interest is calculated using Kentucky’s applicable tax interest rate.
The calculation period begins on the original due date and continues through the payment date.
Interest may apply even when the insurer later files an amended report or receives extra time to provide information.
Line 7: Amount Due
Add the surcharge, penalty, and interest.
Use this formula:
Line 4 + Line 5 + Line 6 = Line 7
When no penalty or interest applies, Line 7 will equal Line 4.
Line 8: Adjustments
Enter any supported adjustment that increases or decreases the amount due.
An adjustment may relate to:
- A previously reported overpayment
- A prior-period correction
- A Department-approved credit
- A payment application issue
- Another documented surcharge adjustment
Attach supporting documentation explaining:
- The reason for the adjustment
- The reporting period involved
- How the amount was calculated
- Whether the adjustment is positive or negative
- Any related correspondence or approval
Do not use Line 8 to claim an unsupported refund or credit.
Line 9: Total Amount Due
Apply Line 8 to Line 7.
Use one of these formulas:
Line 7 + Positive Adjustment = Line 9
or
Line 7 − Approved Credit Adjustment = Line 9
Line 9 is the final amount payable with the report.
Make sure the payment agrees with this amount.
Online Payment Information
Paid Online Checkbox
Check this box when the amount on Line 9 was paid electronically.
Do not check it when a paper check is enclosed.
Confirmation Number
Enter the confirmation number issued for the electronic payment.
Copy it exactly from the payment record.
Do not enter the FEIN, NAIC number, bank-account number, or Department account number in this field.
Payment Schedule Confirmation Page
Attach the Payment Schedule Confirmation page when paying online.
Submit the report and confirmation page even though the payment itself was made electronically.
Principal Officer Certification
The principal officer must certify that the report has been examined and is true, correct, and complete to the best of the officer’s knowledge and belief.
Before signing, the officer should review:
- The reporting month
- Company identification
- Premium totals
- Exemptions
- Returned premiums
- Surcharge calculation
- Penalty and interest
- Adjustments
- Payment information
- Supporting documents
Principal Officer’s Signature
A principal officer of the company must sign the report.
The signer should have authority to certify the insurer’s tax filing.
Principal Officer’s Title
Enter the officer’s official position.
Examples may include:
- President
- Chief financial officer
- Treasurer
- Controller
- Vice president
- Chief accounting officer
Printed Name
Print or type the principal officer’s full name.
The name should clearly identify the person who signed.
Date
Enter the date the officer signed the report.
Email Address
Enter an active email address for the principal officer or authorized company contact.
Telephone Number
Enter a current telephone number, including the area code.
Preparer Information
Complete this section for the person who prepared the report.
Preparer’s Signature
The preparer should sign the report.
The preparer may be a company employee or an outside tax professional.
Preparer’s Title
Enter the preparer’s job title or professional role.
Examples include:
- Tax manager
- Accountant
- Controller
- Insurance tax specialist
- External tax preparer
Printed Name
Print or type the preparer’s full name.
Date
Enter the date the preparer signed the report.
Email Address
Provide an email address where the preparer can receive questions about the filing.
Telephone Number
Enter the preparer’s current telephone number with area code.
Important Surcharge Rules
How The Surcharge Must Be Collected
The insurer must collect the surcharge from the policyholder when it collects the related premium, assessment, or other insurance charge.
The surcharge should be collected in the same manner as the underlying insurance payment.
Returning Surcharge On Terminated Policies
When a premium is returned because a policy is terminated, the related surcharge must also be returned to the policyholder before the returned premium is claimed as a deduction.
No Collection Commission
An insurer or agent cannot retain part of the surcharge as a fee, service charge, or commission for collecting it.
The entire collected surcharge must be reported and remitted, subject to valid deductions and adjustments.
Municipal Premium Taxes
Municipal premium taxes are excluded from Line 1a and are not included in the surcharge base.
Life And Health Insurers
Premiums received by life and health insurers are exempt from this surcharge under the rule identified in the instructions.
However, insurers using this form should still classify each type of premium carefully rather than assuming that every product associated with health or life coverage is reported in the same manner.
Surety And Public Works Bonds
Premiums collected for surety coverage and bonds on public works projects are subject to the surcharge when the contractor is the policyholder.
The fact that a government entity is named as the obligee does not make the premium exempt.
The identity of the policyholder, rather than only the obligee, controls the treatment in this situation.
Where To Get Help
For assistance with the insurance surcharge report, exemptions, calculations, or filing requirements, contact the Kentucky Department of Revenue at:
Telephone: (502) 564-4810