AN ACT relating to the taxation of retirement distributions.

HB 146 increases Kentucky's exclusion for retirement distributions from $31,110 to $41,110 for taxable years beginning on or after January 1, 2026. This change directly affects Kentucky taxpayers receiving distributions from pension plans, annuities, or retirement accounts. The bill modifies KRS 141.019 to raise the amount of retirement income excluded from state taxable income. The adjustment applies to distributions from qualified retirement plans, including 401(k)s and pensions, for tax years starting in 2026. The current $31,110 exclusion remains in effect for 2025 and earlier years.