Kentucky State Pension has an exclusion of $31100. Does Turbotax handle that properly?

Yes, TurboTax handles the Kentucky pension exclusion.  To enter information that would be included on Kentucky Schedule P, Pension Income Exclusion in TurboTax Online:

1. Select Tax Home in the left pane
2. On the  Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the State Taxes box, then select Start, Continue, Pick up where you left off, or Review/Edit
3. If you land on a Kentucky interview page, select Let's get started, Continue or other similar prompt.  Otherwise, in the left pane, select Prepare State, then proceed through the Kentucky screens
4. Proceed through the state interview until you get to the Government Pension Income screen.
5. Select  Yes as appropriate if you and/or your spouse received pension income from the federal government, Kentucky state and local government or supplemental U.S. Railroad Retirement Board Benefits, then select Continue
6. Answer as appropriate on the Government Pension Income (Retired Before 1998) and Government Pension Income (Retired After 1997) screens
7. Enter information as appropriate on the subsequent Government Pension Income (Retired Before 1998) or Government Pension Income (Retired After 1997) screen(s), then select Continue
8. On the  Exempt Amount or Percentage screen, answer as appropriate:  The retirement system provided:
   • The Exempt Amount
   • The Exempt Percentage
   • Neither
9. Select  Continue
10. If you selected The Exempt Percentage on the previous screen, the Enter Exempt Percentage screen will generate.  There, you'll be able to enter the Exempt Percentage as Computed by Your Retirement System.  Select Continue
11. Your exempt income will display on the Exempt Government Pension Income screen.  Select Done

This computation is made on Part I of Schedule P, Kentucky Pension Income Exclusion.