SB81 creates a new refundable Kentucky child credit for tax years beginning on or after January 1, 2027, and before January 1, 2031. The credit is limited to qualifying children under age 6 and is structured as a per-child credit of up to $1,000. Taxpayers with modified gross income below specified thresholds would receive the full amount, while taxpayers above those thresholds would receive a reduced credit that phases down by $10 for every $1 above the income cap. Part-year residents would receive a prorated credit based on Kentucky-source income.
The bill also requires the Department of Revenue to report annual, nonconfidential data on the credit to the Legislative Research Commission, including county location, amounts claimed, cumulative totals, and income-range breakdowns. In addition, SB81 amends Kentucky’s tax credit ordering rules so the new child credit is applied after other refundable credits against individual income tax. It also adds the child credit to the list of items for which the Department of Revenue may disclose information to the Legislative Research Commission, and it expressly removes confidentiality protections for the reporting required by the bill.
Impact
SB81 would add a new refundable individual income tax credit to KRS Chapter 141 and make conforming changes to KRS 141.0205 and KRS 131.190. Its practical effect would be to reduce income tax liability, and potentially generate refunds, for eligible families with children under age 6 during the 2027-2030 tax years. The bill would also expand reporting obligations for the Department of Revenue and create a new statutory exception to taxpayer confidentiality for the data needed to administer and evaluate the credit.
Sentiment
Based on the bill text and available context, the measure appears to be presented as a targeted family tax relief proposal rather than a controversial structural tax overhaul. No committee transcript or recorded votes were provided, so there is no documented debate to indicate broad support or opposition. The bill’s design suggests a policy focus on assisting lower- and middle-income families with young children while also collecting data to assess the credit’s use and distribution.
Contention
The main potential points of contention are the fiscal cost of a refundable credit, the income phaseout structure, and the decision to limit eligibility to children under age 6. Some lawmakers or stakeholders may favor the targeted nature of the benefit, while others may question whether the credit is too narrow, too expensive, or too intrusive in its reporting requirements. The bill also raises privacy-related concerns because it makes otherwise confidential taxpayer information available for specified reporting purposes, though only in aggregate or nonconfidential form as described in the act.