Kentucky residents will see their individual income tax rate go down at the start of 2026.State lawmakers passed a bipartisan bill, House Bill 1, to lower the tax to 3.5% from 4%.On Tuesday, Gov. Andy Beshear signed HB1 saying Kentucky is experiencing a booming economy but it’s time to help families who may be hurting financially.

Final passage came on a 34-3 Senate vote to lower the tax to 3.5% from 4% at the start of 2026. The bill goes to Democratic Gov. Andy Beshear, who has said he supports the tax cut. It continues a downward trend in the personal income tax rate since the GOP gained full control of the legislature in 2017.

Some Democrats voted with Republicans Tuesday to pass a half-a-percent cut to Kentuckians’ individual income tax rate.

Democratic Gov. Andy Beshear has signed off on a bill that will lower Kentucky’s individual income tax starting next year

Kentucky Governor, Andy Beshear signs a bill lowering the individual income tax rate. Gov. Beshear says despite seeing economic growth in the Commonwealth, some are still struggling to afford necessities like groceries.