Legislation that would establish a tax exemption for Kentucky veterans following their retirement from the Armed Forces has been prefiled for the 2022 General Assembly.
BR 971 would create a deduction of the first year’s income for retired veterans who remain in or immediately move to Kentucky upon retirement.
The bill would require permanent residency within the state for at least three consecutive years following to remain eligible.
Of the 41 states that tax personal income, there are currently 23 that do not tax military retirement pay. Kentucky is among the remaining states that include partial exemptions, only exempting veterans who retired before 1997 and whose retirement pay does not exceed $31,110. This measure would give exemption to all veterans who retire in or move to Kentucky, regardless of income.
