Is my military income taxable to Kentucky?

According to the Kentucky filing Instructions, all active duty military pay is exempt from Kentucky income tax.  

If you are a resident of Kentucky, enter the subtraction by performing the following steps in the program:

1. State Section
2. Kentucky Resident Return
3. Subtractions From Income
4. Enter Active Duty Military Pay
5. Save 

If you are a nonresident of Kentucky, your active duty pay is not taxable on the Kentucky return.  

To exempt the nonresident military income from the nonresident return, perform the following steps in the program:

1. State Section 
2. Kentucky Nonresident Return
3. Adjustments to Income
4. Nonresident Military Income
5. Nonresistant Military Income included in Federal AGI
6. Enter the amount of military income
7. Nonresident Military income included in Kentucky AGI
8. Save

What if my spouse and I have different residency? 

If one spouse is a resident of Kentucky and the other is a nonresident, you can choose to file Married Filing Separate on this Combined return, Married Filing Joint return, or Married Filing Separate on Separate Returns.

Additional Information

• Kentucky Income Tax Instructions
• Military Spouse Relief Act