The Kentucky House of Representatives remains committed to passing legislation to lower the state’s individual income tax to 3.5% as of January 2026.
If passed, economists estimate House Bill 1 will leave $718 million in the pockets of Kentucky taxpayers in the first fiscal year. On January 9, the measure cleared the House by a vote of 90-7.
Sponsor of the bill, Representative Jason Petrie, said the measure empowers Kentuckians to save, invest and spend in ways that benefit their communities.
In 2018, the General Assembly first acted to decrease the individual income tax rate from 6% to 5%. According to the release, it resulted in historic economic growth, record job creation and state revenue.
Lawmakers passed legislation (HB 8) in 2022 that lays the groundwork to eliminate the individual income tax entirely but includes preset triggers that must be met before the legislature can move to decrease the tax in half a percentage point increments. These triggers essentially hold funding for state programs and agencies harmless.
House Bill 1 now goes to the Senate for consideration.
Source: WBKO
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