AN ACT relating to the home installation credit.
HB364 creates a new refundable individual income tax credit called the “home installation credit” for Kentucky residents who are either age 65 or older or who have a qualifying physical or mental impairment. The credit applies to qualifying home installations made to the taxpayer’s primary residence in Kentucky for taxable years beginning on or after January 1, 2026, and before January 1, 2030. A qualifying installation is an upgrade or modification that improves habitability, efficiency, or accessibility, including products that are energy efficient or made from sustainable materials. The credit equals the actual cost of the qualifying expenses, capped at $7,500 per year, and is refundable against the individual income tax.
The bill also requires the Department of Revenue to report annual data to the Interim Joint Committee on Appropriations and Revenue beginning December 1, 2027, including the number of returns claiming the credit, the total amount claimed, and income-range breakdowns of claimants. In addition, HB364 amends Kentucky’s tax credit ordering statute to place the new home installation credit within the list of refundable credits applied after other specified credits. It also updates the state tax confidentiality statute to allow the Department of Revenue to share information with the Legislative Research Commission for oversight of the new credit.
The bill’s impact is to create a new state tax expenditure targeted at older adults and individuals with disabilities, while also encouraging home modifications that improve accessibility, energy efficiency, and sustainability. It would affect individual taxpayers who incur qualifying home improvement costs, and it would add administrative duties for the Department of Revenue related to reporting and credit tracking. Because the credit is refundable, it could reduce tax liability below zero and result in a payment to eligible claimants.
No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available materials. Based on the bill text alone, the measure appears designed as a consumer assistance and housing accessibility policy with an energy-efficiency component, which may attract support from advocates for seniors, disability access, and home energy upgrades. Potential concerns would likely center on fiscal cost, the refundable nature of the credit, and whether the reporting requirements are sufficient to evaluate effectiveness.
HB364 would add a new refundable individual income tax credit to KRS Chapter 141 for qualifying home installations made by eligible Kentucky residents, and it would amend the state’s credit-priority rules in KRS 141.0205 to place the new credit among refundable credits. It also amends KRS 131.190 to permit confidential tax information sharing with the Legislative Research Commission for oversight of the new credit. The bill affects older adults, individuals with disabilities, homeowners making accessibility or efficiency upgrades, and the Department of Revenue’s administration and reporting responsibilities.
No committee discussion or vote history was provided, so the record does not show formal legislative sentiment. From the bill’s structure and purpose, the measure appears generally favorable to seniors, people with disabilities, and homeowners seeking accessibility or energy-efficiency improvements. The refundable tax credit and reporting requirements suggest an effort to provide direct relief while maintaining oversight.
The main likely point of contention is fiscal impact: because the credit is refundable and can reach up to $7,500 per year, lawmakers may question revenue loss and budget exposure. Another possible issue is eligibility and administration, including how the Department of Revenue will verify qualifying installations, sustainable materials, and disability status. Support would likely come from advocates for aging-in-place, disability access, and energy efficiency, while skepticism may come from fiscal conservatives concerned about creating a new tax expenditure.