KY HB13

Establishes a two-tier individual income tax structure beginning January 1, 2027: 3.5% on net income up to $250,000, and 6% on income between $250,000 and $300,000, with a flat 6% rate applying to all income if total net income exceeds $300,000

Maintains the current flat tax rate of 3.5% for taxable year 2026 and 4% for taxable years 2024-2025

Eliminates the existing automatic income tax rate reduction mechanism that was tied to budget reserve trust fund balances and general fund revenue conditions

Removes the annual review process by the Office of State Budget Director that previously evaluated whether conditions were met for incremental tax rate reductions toward zero

Preserves existing tax credits for individuals, married couples, dependents, seniors (age 65+), blind taxpayers, and Kentucky National Guard members