For all taxpayers, Kentucky allows a pension income exclusion of up to $31,110 of pension income that was included as taxable income on the federal tax return. A retired military taxpayer may qualify for a greater deduction, and Schedule P is used to calculate the additional deduction amount, if any.
For the calculation on Schedule P, a taxpayer who retired after December 31, 1997 needs to determine their "exempt percentage". This percentage is calculated using the worksheet in the Schedule P instructions, and the Kentucky DOR has also made this worksheet into an Excel spreadsheet that you can download and use to help with the calculation.
To complete Schedule P in TaxSlayer Pro, from the Kentucky Tax Return Menu select:
- Total Subtractions to Federal AGI
- Excludable Retirement Income
-
Exempt Retirement Income (Before 1/1/98) or
Exempt Retirement Income (After 12/31/97) - Select either menu line, enter the taxpayer's date of retirement, then enter the remaining information including the exempt percentage for a taxpayer who retired after December 31, 1997.
Additional Information:
Kentucky DOR: Forms and Instructions
Kentucky DOR: Schedule P Calculator (downloadable Excel spreadsheet)
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