Active Duty Military Pay Income Tax Exclusion
All active duty military pay is 100% exempt from Kentucky state income tax.
State BenefitKentuckyTax Benefits
Verified September 30, 2026 against revenue.ky.gov
At a glance
- Benefit type
- Tax Benefits — Kentucky
- Who it's for
- Active Duty, National Guard, Reservists
- VA rating needed
- No rating requirement
- Where it applies
- Kentucky
- Last verified
- September 30, 2026
What is Active Duty Military Pay Income Tax Exclusion?
Active Duty Military Pay Income Tax Exclusion is a Kentucky tax benefits benefit for active duty, national guard, reservists. All active duty military pay is 100% exempt from Kentucky state income tax.
Who qualifies
- Active Duty
- National Guard
- Reservists
- Through veteran sponsor (any rating)
- Kentucky residency
Who is eligible
Eligibility
All active duty service members earning military pay. No disability or discharge requirement.
What Active Duty Military Pay Income Tax Exclusion covers
Covers
100% of active duty military pay is exempt from Kentucky state income tax. Value depends on pay grade.
How to apply for Active Duty Military Pay Income Tax Exclusion
How to apply
Claimed when filing Kentucky income tax return (Schedule M).
Verified information & sources
- Last verified
- September 30, 2026
- Official source
- revenue.ky.gov
Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.
How VetUnlock verifies benefitsFrequently asked questions about Active Duty Military Pay Income Tax Exclusion
Who qualifies for Active Duty Military Pay Income Tax Exclusion?
Active Duty Military Pay Income Tax Exclusion is for Active Duty, National Guard, Reservists; Through veteran sponsor (any rating); kentucky residency. See the eligibility details on this page and confirm with the official source before applying.
How do I apply for Active Duty Military Pay Income Tax Exclusion?
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Active Duty Military Pay Income Tax Exclusion?
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.
Other Kentucky Tax Benefits
- Military Retirement Pay Income Tax ExclusionUp to $31,110 income exclusion (general pension exclusion; more available via Schedule P)Up to $31,110 per year of pension/retirement income (including military retirement pay) excluded from Kentucky state income tax; military retirees with pensions exceeding $31,110 may exclude additional amounts via Schedule P based on pre/post-1998 service.
- VA Disability and Military Disability Retirement Pay Tax ExclusionVA disability compensation, DIC, and military disability retirement pay are fully excluded from Kentucky income tax.
- Homestead Property Tax Exemption (100% Disabled)$490-$590/year in property tax savings$49,100 deducted from assessed home value for 100% disabled veterans, saving approximately $490-$590/year.
- Motor Vehicle Property Tax Exemption (100% Disabled) - PROPOSED, NOT ENACTEDNot currently available (proposed legislation did not pass)Proposed exemption from state property tax on up to two motor vehicles for 100% disabled veterans. NOT currently law — the 2023 bill (HB25) died in committee.