HB2740 Summary

• Individual Income Tax Rate Reduction: Changes the effective date for new individual income tax brackets from January 1, 2024 to January 1, 2026, with rates reduced to 0.25%-4.75% (down from higher previous rates) and eliminates the federal income tax deduction for individuals.

• Standard Deduction Adjustment: For tax year 2026 and beyond, establishes new standard deduction amounts: $13,550 for single/married filing separately, $27,100 for married filing jointly, and $20,325 for head of household.

• Corporate Tax Rate: Maintains the 4% corporate income tax rate for taxable years beginning after December 31, 2021.

• Various Exemptions and Deductions: Preserves numerous existing tax exemptions and deductions including retirement benefits, military compensation, adoption expenses, organ donations, and educational savings accounts.

• Effective Date: The bill becomes effective January 1, 2026.