Active Duty Military Pay Income Tax Exclusion
All active duty military pay is 100% exempt from Kentucky state income tax.
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Apply directly through the official Kentucky agency.
About this benefit
Eligibility
All active duty service members earning military pay. No disability or discharge requirement.
Covers
100% of active duty military pay is exempt from Kentucky state income tax. Value depends on pay grade.
How to apply
Claimed when filing Kentucky income tax return (Schedule M).
Verified against official source
Last checked 2026-05-05 against revenue.ky.gov. Always confirm current rates and rules with the Kentucky state agency before applying.
Other Kentucky Tax Benefits
Military Retirement Pay Income Tax Exclusion
Up to $31,110 per year of military retirement pay excluded from Kentucky state income tax.
Up to $31,110 income exclusion
VA Disability and Military Disability Retirement Pay Tax Exclusion
VA disability compensation, DIC, and military disability retirement pay are fully excluded from Kentucky income tax.
Homestead Property Tax Exemption (100% Disabled)
$49,100 deducted from assessed home value for 100% disabled veterans, saving approximately $490-$590/year.
$490-$590/year in property tax savings
Motor Vehicle Property Tax Exemption (100% Disabled)
Exemption from state property tax on up to two motor vehicles for 100% disabled veterans.
Up to $225/year for two vehicles
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