Bill > HB192

This bill proposes to exclude all distributions from military pension plans from state income taxation for retired members of the United States military and National Guard, as well as their surviving or former spouses, for taxable years beginning on or after January 1, 2026, but before January 1, 2030. The purpose of this military pension tax exclusion is to encourage military personnel and their families to remain residents of Kentucky after retirement. The bill requires the Department of Revenue to report detailed information about the tax exclusion to the Legislative Research Commission and the Interim Joint Committee on Appropriations and Revenue, including the number of tax returns claiming the exclusion, the total amount of exclusions claimed, the reduced tax liability by county, and the reduced tax liability across different income ranges. Additionally, the bill makes a conforming amendment to KRS 131.190 to allow reporting of this specific tax exclusion information to the legislative body. This targeted tax relief aims to make Kentucky more attractive to military retirees by providing a significant financial incentive for them to continue living in the state after their military service.

Budget and Finance

https://apps.legislature.ky.gov/record/25RS/hb192.html