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2026 rules · verified against Kentucky's primary source
Kentucky partially exempts military retirement pay (up to about $31,110); the rest is taxable.
Military retirement is treated as pension income: up to $31,110 excluded per taxpayer (Schedule P). Retirement attributable to service before Jan 1, 1998 can be fully excluded via Schedule P. Kentucky flat rate drops to 3.5% for 2026.
Treatment
partially exempt
Exemption up to
$31,110
Top marginal rate
3.50%
Source: https://codes.findlaw.com/ky/title-xi-revenue-and-taxation/ky-rev-st-sect-141-019.html · verified July 2026
Estimated Kentucky state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
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