fbpx

< Back to Thought Leadership

Kentucky Reduces Individual Income Tax Rate for 2024 – House Bill 1 Signed into Law

By Amy Sandlin, CPA, Tax Senior Manager at Blue & Co.

Kentucky House Bill 1 was signed into law by Governor Beshear on Friday, February 17th.

It reduces the individual income tax rate another 0.5 percent in 2024. This is a continuation of what we saw in 2022.

Last year’s legislation (HB 8) gave us a 0.5 percent annual rate cut, but the state had to reach certain budget goals before the cut went into effect. Kentucky met the budget goals for the first reduction, so the individual income tax rate decreased from 5 percent to 4.5 percent for 2023.

Reducing the income tax rate is part of a bigger political goal to shift Kentucky away from income taxes towards sales taxes.

Therefore, 2022 legislation also significantly expanded the list of services that are subject to Kentucky sales tax. For more information on the sales tax changes from 2022 legislation, see our article here.

HB1 is simpler than the 2022 legislation. It locks in the first rate cut to 4.5 percent for 2023, and it reduces the rate to 4 percent for 2024. The state does not have to meet budget goals to get the rate cut in 2024.

If you have questions about how Kentucky House Bill 1 law affects you, we encourage you to reach out to your local Blue and Co. advisor for more information and guidance.

How to Manage Clinical Validation Denials

In the past several years, hospitals have continued to feel the impact on revenue from Clinical Validation Denials (CVD). The need for a robust CDI team to capture support for clinical indicators while the patient is still in house is more imperative than ever. The other overwhelming piece for revenue cycle teams to manage is […]

Learn More

Margin Improvement: Optimizing Financial Performance

Ensuring the long-term financial viability of a health system requires constant attention to the operating statement. This involves assessing the current state of your healthcare organization and critically comparing the current condition to industry and/or internal benchmark standards. Ultimately, this assessment assists management implement an ongoing margin improvement process to increase the likelihood of achieving […]

Learn More

Blue Named One of Kentucky’s Best Places to Work

CARMEL, Ind. (May 3, 2023) – Blue & Co., LLC is honored to be named among the Best Places to Work in Kentucky by the Kentucky Chamber of Commerce, the Kentucky Society for Human Resource Management (KYSHRM) and ClearPath Mutual Insurance Company. This is the 12th year Blue & Co. has made the list as […]

Learn More