Tax Reform Commission To Meet

{Frankfort, Kentucky}…Recommendations from changing the state income and sales tax rates to increasing the cigarette tax may be finalized Monday when Governor Steve Beshear’s tax reform commission meets. At its last meeting on November 8th, the commission supported cutting the amount of annual pension income that should be exempt from the income tax to $15,000 from $41,110. It also said Social Security benefits, now exempt from the state income tax, should be taxed on a scale, as the federal government does, and it recommended disallowing 75 percent of the total in itemized deductions to which a taxpayer is currently entitled for things like home mortgage interest and charitable contributions.

Governor Beshear has asked for a final report no later than December 15th. He also has said he will discuss the final recommendations with legislative leaders and decide what sort of reform to propose to the General Assembly, which writes state tax laws.

The federal government does not tax Social Security benefits if an individual’s total income is less than $25,000. Social Security benefits are taxed if an individual’s total income is $25,000 to $34,000. And up to 85 percent of benefits may be taxable for individual total incomes more than $34,000.