It depends. One significant change last year was the pension exemption. Instead of $41,110 of all pension income being tax-exempt, now the amount is $31,110. The exemption amount for Federal Employees have been maintained; however, it is much more likely that you will have to fill out the information in Schedule P in order to receive the correct deduction. To do this:
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Click Yes on the screen asking about Government Pension Income in the Kentucky state interview.
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Answer the question if you retired before January 1, 1998 (If you did, your pension will be exempted once you enter the information in the next screen providing the retirement date and pension amount).
- If you answered no on that screen, answer yes on the next screen if you retired after 1997 and had service credits from before 1998. You will need to answer questions in the following screens that will allow additional amounts of your pension to be exempted from income. Schedule P adjusts how much of the pension could be taxable before the Pension exemption of $31,110 is applied.
Please feel free to add a comment if you have additional questions. But here is a link that discusses this and other KY Income tax Law Changes
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