Kentucky Residents Military Pay To Become State Tax Exempt

Beginning 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 will be exempt from Kentucky income tax.

Service members will claim the exemption by excluding military pay when filing a Kentucky individual income tax return starting with the 2010 return, due on April 15, 2011. Provided the military member has no income other than military pay, he or she would not be required to file a Kentucky income tax return. The military pay exemption applies to all Kentucky military members regardless of where the member is stationed.

For Coast Guard personnel, PPC Topeka will discontinue withholding of Kentucky state income tax from members’ pay effective 1 Jan 2010.

Based in part on a PPC Topeka blog entry.

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