Kentucky Meets Fiscal Goals Needed to Cut Personal Income Tax to 4.5% in January 2023
During the 2022 session, the General Assembly took steps to begin phasing out Kentucky’s personal income tax. The legislation included targets for the state to meet in order to reduce the tax by 0.5% each year.
On Wednesday, the Kentucky Department of Revenue confirmed a budget surplus that meets those conditions.
With this news, Kentuckians will see their personal income tax drop from 5% to 4.5% effective January 1, 2023.
Through House Bill 8, this process will repeat itself until the Kentucky Personal Income Tax is completely eliminated.
Kentucky Chamber President and CEO Ashli Watts released the following statement in response to the news:
“Reducing personal income taxes is an important driver of growth and leaving more money in Kentuckians’ paychecks. The Kentucky House has strongly supported House Bill 8 to ensure Kentucky becomes more competitive and applauds this first tax cut. As our neighboring states continue to take steps to reform their tax codes to attract individuals and businesses, Kentucky must continue to focus on making continued progress in achieving a more tax-based tax system. the consumption.