Kentucky’s personal income tax rate to go down after Beshear signs GOP-sponsored cut
There’s no longer any doubt: Kentuckians’ personal income tax rate will drop from 4% to 3.5% come Jan. 1 of next year.
Democratic Gov. Andy Beshear signed House Bill 1, a bill that affirmed that drop, into law on Thursday morning.
The bill is part of a years-long effort begun in 2022 by Republican legislators to get the state’s income tax rate all the way down to 0%.
Democrats like Beshear have expressed hesitance at continued cuts — the personal income tax comprises roughly one third of the state’s General Fund revenue — but Beshear previously said that the drop from 4% to 3.5% would “be appropriate.”
The bill garnered unanimous support from Republicans in the state legislature while Democrats in both chambers were split.
While Beshear was on board to provide relief to Kentuckians in times of high prices, other Democrats bemoaned the fact that the across-the-board tax cut benefits wealthy Kentuckians much more than low-income, middle-income or retired Kentuckians.
Someone making $1 million a year will, if the cut goes into effect, save $15,000 each year compared to how they were being taxed three years ago. By contrast, a Kentuckian making $50,000 in annual income will save $750 each year.
Senate Appropriations & Revenue Chair Chris McDaniel, R-Ryland Heights, said on the Senate floor this week that the bill is representative of legislative Republicans’ keen desire to let Kentuckians keep more money in their pockets.
“The thing I’m very proud of this body for is in the last seven years, we’ve added another thing that’s fairly certain, which is the General Assembly is going to do everything in its power — and frequently with success — to lower your taxes. And that’s what House Bill 1 is all about,” McDaniel added.
This story was originally published February 6, 2025 at 10:44 AM.
