AN ACT relating to income taxation of military pensions.
Amend KRS 141.019 to exclude all distributions from military pension plans received by retired members of the United States military and National Guard and their surviving spouse or former spouse under a survivor benefit plan from income taxation for taxable years beginning on or after January 1, 2026, but before January 1, 2030; require reporting by the Department of Revenue; amend KRS 131.190 to conform.
This bill, HB192, seeks to change how military pensions are taxed in the state. Specifically, it would exclude military pensions from state income taxes for four years, starting on January 1, 2026, and ending on January 1, 2030. This change applies to both retired military personnel and their surviving spouses who receive these pensions. The bill also includes a requirement for the Department of Revenue to report on this change.
The people who would be affected are retired members of the United States military and National Guard, as well as their surviving spouses. By exempting their pensions from state income tax for these four years, the bill aims to provide some financial relief to those who have served or are still serving their country.
As of January 9, 2025, the bill was introduced and referred to the Committee on Committees and later to the Appropriations & Revenue committee in the House. The bill is currently in the early stages of the legislative process.