Kentucky

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Summary of Kentucky Military and Veterans Benefits: The Commonwealth of Kentucky offers special benefits for its military Service members and Veterans including State Tax Exemptions, State Employment Preferences, Education and Tuition Assistance, Vehicle Tags, as well as Hunting and Fishing License privileges. Eligibility for some benefits may depend on residency, military component, and Veteran disability status. Kentucky Department of Veteran Affairs Regional Administrators and field benefit representatives are strategically located throughout the state. They assist Veterans and their dependents in proof and establishment of claims to benefits which they may be entitled under federal, state, or local laws. As accredited representatives by the U.S. Department of Veterans Affairs General Counsel, representation is also provided before the U.S. Department of Veterans Affairs in formal and informal hearings acting as attorneys-in-fact. The Field Benefits Representatives maintain regular, established and published office hours at a designated place in each county, which they visit once a month.

Kentucky State Military and Veterans Benefit Highlights and Eligibility

 What are my Kentucky Military and Veterans State Tax Benefits?

Kentucky Income Tax Exemption for Military Wages: Effective for taxable years beginning on or after January 1, 2010, all military pay received by active duty members of the Armed Forces of the United States, members of reserve components of the Armed Forces of the United States, and members of the National Guard are exempt from Kentucky income tax.

Learn more about Kentucky Income Tax Exemption for Military Wages

Kentucky Retired Military Pay Income Taxes : Kentucky allows a pension income exclusion of up to $31,110 * for all pension income that is reported as taxable and included in the federal adjusted gross income. You may be able to exclude more than $31,110. If you are retired military and receive pension income greater than $31,110, you will need to complete Kentucky Schedule P Kentucky Pension Income Exclusion.
Kentucky Pension Income Exclusion Schedule P

* ($41,110 for taxable year 2017 and earlier)

Learn more about Kentucky Retired Military Pay Income Taxes

Kentucky State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay: Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the armed forces should not be included in taxable income if any of the following conditions apply:

  • You were entitled to receive a disability payment before September 25, 1975;

  • You were a member of the military (active or reserves) or were under a binding written commitment to become a member on September 24, 1975;

  • You receive disability payments for a combat-related injury. This is a personal injury or sickness that:

  • Resulted directly from armed conflict,

    • Took place while you were engaged in extra-hazardous service,

    • Took place under conditions simulating, including training exercises such as maneuvers, o

    • Was caused by an instrumentality of war.

  • You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it (the exclusion under this condition equals the amount you would be entitled to from the VA).

Learn more about Kentucky State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay

Kentucky State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation: Dependency and Indemnity Compensation (DIC) is a tax-free monetary benefit paid to eligible survivors of military Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.

Learn more about Kentucky State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation

 Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Kentucky State Tax Benefits : Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Learn more about Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Kentucky State Tax Benefits

Kentucky Property Tax Exemption for Senior Citizens and the Disabled: In Kentucky, all real property is assessed by a locally elected official known as a property valuation administrator (PVA) ​

Homeowners who are least 65 years of age or who have been classified as totally disabled and meet other requirements are eligible to receive a homestead exemption. This exemption is applied against the assessed value of their home and their property tax liability is computed on the assessment remaining after deducting the exemption amount.

The homeowner must have been receiving payments pursuant to his or her disability for the entire assessment period.

The homeowner must apply annually to continue to receive the exemption based upon a total disability unless:

  • They are a Veteran of the United States Armed Forces and have a service connected disability;

  • They have been determined to be totally and permanently disabled under the rules of the Social Security Administration;

  • They have been determined to be totally and permanently disabled under the rules of the Kentucky Retirement Systems.

The adjustment for the 2018 assessment year will be $37,600. This amount is deducted from the assessed value of the applicant’s home and property taxes are computed based upon the remaining assessment. The amount of the homestead exemption is recalculated every two years to adjust for inflation.

To apply for a homestead exemption applicants must:

Kentucky Department of Revenue Property Value Administrator Directory

Learn more about the Kentucky Property Tax Exemption for Senior Citizens and the Disabled

Kentucky Military Spouses Residency Relief Act (MSRRA): (Public Law 111-97) was signed into law on Nov. 11, 2009. This new law is effective for taxable year 2009. The MSRRA allows the same residency benefits permitted to military personnel under the Service Members Civil Relief Act (SCRA) to also apply to a military A Spouse's nonmilitary service income, under certain circumstances.

The MSRRA prohibits a Service member's Spouse from either losing or acquiring a residence or domicile for purposes of taxation because he or she is absent or present in any U.S. tax jurisdiction solely to be with the Service member in compliance with the Service member's military orders, if the residence or domicile is the same for the Service member and the Spouse. The MSRRA also prohibits a Spouse's income from being considered income earned in a tax jurisdiction if the Spouse is not a resident or domiciliary of such jurisdiction when the Spouse is in that jurisdiction solely to be with a Service member serving under military orders.