Financial Benefits for Kentucky Veterans
Exemption from Kentucky Income Tax on Military Pay:
Military pay earned while serving in the U.S. Armed Forces is fully exempt from Kentucky state income tax.
Tax Rules on Military Retirement Pay in Kentucky:
Veterans who retired prior to January 1, 1998, are eligible for a full state tax exemption on their military retirement income. Those who retired on or after January 1, 1998, can exclude up to $31,110 of their retirement pay from Kentucky income tax.
For retirees with qualifying service prior to 1998 but who officially retired after December 31, 1997, the exempt amount may exceed the standard limit. These individuals should use Kentucky Schedule P to calculate the percentage of their retirement pay that qualifies for additional exclusion.
Taxation of Thrift Savings Plan (TSP):
The TSP does not automatically withhold state or local income taxes, though distributions are reported annually on IRS Form 1099-R. All withdrawals are generally taxable at the state level, and early withdrawals may face higher tax penalties.
Tax Exemption on Military Disability Retirement Pay in Kentucky:
Disability retirement pay received due to injury or illness from military service is not subject to Kentucky income tax. Qualifying payments include:
- VA disability compensation or pension for Veterans and dependents
- Housing grants for specially adapted homes
- Vehicle grants for Veterans with qualifying impairments
- Dependent-care assistance benefits
Tax Status of VA Dependency and Indemnity Compensation (DIC):
DIC, provided to eligible survivors of fallen Service members or Veterans who died from service-connected causes, is tax-free in Kentucky.
Survivor Benefit Annuities and State Tax Exemptions:
Kentucky allows up to $31,110 of survivor annuity income from SBP, RCSBP, and RSFPP to be excluded from taxable income.
Homestead Exemption for Disabled or Senior Veterans:
Kentucky residents aged 65 or older or those classified as totally disabled may qualify for a property tax homestead exemption. For the 2023–2024 assessment years, the exemption is valued at $46,350, deducted from the property’s assessed value before taxes are calculated. This amount adjusts biennially for inflation.
Military Spouses Residency Relief in Kentucky:
Under the MSRRA, the spouse of a nonresident active-duty Service member may be exempt from Kentucky state income tax on wages earned while residing in the state due to military orders.
Tax Filing Extension for Combat-Deployed Service Members:
Members of the Armed Forces deployed to combat zones receive an automatic 12-month extension after returning home to file Kentucky income tax returns and make payments.
Sales Tax in Kentucky:
- Statewide rate: 6.0%
- Local jurisdictions are not permitted to impose additional sales taxes
- Combined state and local sales tax rate remains at 6.0%
Recreation
Kentucky Outdoor and State Park Benefits for Veterans and Service Members
Disabled Veterans Sportsman’s License in Kentucky:
Kentucky residents who are Veterans with a VA-confirmed service-connected disability rating of 50% or more may obtain a special three-year Disabled Sportsman’s License for just $12. This license includes all-in-one privileges such as hunting and fishing licenses, deer permits, spring and fall turkey permits, a Kentucky Migratory Bird/Waterfowl Permit, and a trout permit.
To apply, Veterans must submit an official VA letter verifying their disability rating, along with their current address and Social Security Number.
Exemption from Hunting and Fishing Licenses for Kentucky Service Members on Leave:
Active-duty Kentucky residents returning home on leave for at least three days are not required to obtain hunting or fishing licenses during that period. While engaging in these activities, Service members must carry their military ID and approved leave papers.
Kentucky State Park Discounts and Perks for Military and Veterans:
Kentucky State Parks offer a variety of exclusive benefits for Veterans, active-duty personnel, and former POWs.
- Military Lodging Discounts:
Active and retired Service members can receive discounted rates on accommodations. From November through March, use promo code “USA” during online booking to access special deals. For bookings between April and October, select “Military Discount” from the available special rate options to get 15% off. Additionally, a 10% discount is available year-round by choosing the “Military” customer type. Proof of military service must be presented at check-in. - Complimentary Lodging for 100% Disabled Veterans:
Kentucky residents who are Veterans, National Guard, or Reserve members with a 100% service-connected disability can stay free at Kentucky State Parks. Eligible individuals may enjoy up to three overnight visits annually, with each stay lasting no more than three nights.
During the high season—Memorial Day to Labor Day and throughout October—reservations must fall between Sunday and Thursday. Outside of these periods, bookings may be made for any day based on availability. The complimentary stay applies solely to the disabled Veteran, and verification of the disability rating is required at check-in. - Free Camping for Former POWs:
Kentucky residents who are former Prisoners of War are entitled to free camping access at any Kentucky State Park. A valid VA-issued POW ID card must be shown at check-in to receive this benefit.
Education Programs
Kentucky Dependent Tuition Waiver:
Kentucky offers a tuition waiver for the Spouses and Children of qualifying Veterans. This benefit covers the cost of tuition at any two-year, four-year, or vocational-technical institution within the Kentucky Department of Education system. Please note, this waiver is not applicable to private or out-of-state colleges or universities.
Who Qualifies for the Kentucky Veteran and Dependent Tuition Waiver?
To qualify, the Veteran must either be a current Kentucky resident or have lived in Kentucky at the time of their passing—although dependents themselves do not need to be Kentucky residents. Eligible recipients include the Veteran’s Spouse, un-remarried Surviving Spouse, biological or adopted Children, and stepchildren, provided the Veteran meets one of the following criteria:
- Passed away while serving on active duty in the U.S. Armed Forces
- Died due to a service-connected condition as verified by the VA
- Rated 100% service-connected disabled
- Considered totally disabled (non-service-connected) with service during a wartime period
- Deceased and resided in Kentucky at the time of death after serving during wartime
Children remain eligible for this waiver until the age of 26, with no age restrictions for Surviving Spouses. Children of Veterans with a service-connected disability are also covered. Instructions and required documentation are detailed in the application form.
Kentucky National Guard Tuition Award Program:
Active members of the Kentucky National Guard can receive tuition assistance that covers in-state tuition costs for full- or part-time enrollment at Kentucky public or private educational institutions. This benefit is available until the Service member earns their first bachelor’s degree.
High School Diploma Program for WWII, Korean War, and Vietnam War Veterans:
Veterans who left high school early to serve in the military during World War II, the Korean War, or the Vietnam War can be awarded a high school diploma from their local school district in Kentucky.
Eligibility:
Kentucky residents who received an honorable discharge and left high school to serve during the following timeframes are eligible:
- World War II: December 7, 1941 – December 31, 1946
- Korean War: June 25, 1950 – January 27, 1955
- Vietnam War: August 5, 1964 – May 7, 1975
(Service in Vietnam before August 5, 1964, starts eligibility from February 28, 1961)
Kentucky Interstate Compact on Educational Opportunity for Military Children (MIC3):
This compact aims to ease the educational transitions for Children of military Families affected by relocations and deployments. Key goals include:
- Ensuring smooth and timely school enrollment despite transfer delays or age requirement differences
- Promoting fair student placement, avoiding setbacks due to attendance rules, course sequencing, or grading systems
- Helping with access to academic and extracurricular programs
- Supporting on-time graduation
- Establishing consistent administrative guidelines across member states
- Streamlining information sharing among schools, families, and states
- Encouraging cooperation among educational systems, parents, and students to support student success
Kentucky Purple Star Award for Military-Friendly Schools:
This award honors schools that go above and beyond in supporting students from military Families.
To earn the Purple Star designation, schools must:
- Designate a trained school liaison to address military Family needs
- Ensure staff awareness of the unique challenges faced by military-connected students
- Maintain a dedicated section on their school’s website offering helpful resources for military Families
Housing Benefits: Locations of Veterans Homes in Kentucky
The Commonwealth of Kentucky operates four dedicated long-term care facilities designed to serve its Veteran population. These Kentucky Veterans Centers are staffed by skilled professionals who are committed to delivering compassionate and high-quality care.
Veterans residing in these centers can access a range of supportive services, including:
- Around-the-clock skilled nursing care
- Comprehensive rehabilitation programs (including physical, occupational, and speech therapy)
- Secured units for those affected by Alzheimer’s or other forms of dementia
- Engaging therapeutic and recreational activities
- Transportation services for VA medical appointments
- On-site Nurse Practitioners available at most facilities
Eligible Veterans with a VA disability rating of 70% or more may qualify for full per diem coverage through the VA, eliminating any out-of-pocket expenses.
Kentucky State Veterans Home at Hazard
Kentucky State Veterans Home at Radcliff
Kentucky State Veterans Home at Wilmore
Kentucky State Veterans Home at Hanson
Eligibility Criteria for Admission
To qualify for admission to a Kentucky Veterans Center, applicants must meet the following conditions:
- Must be a Veteran of the U.S. Armed Forces with a discharge status that is not dishonorable
- Must be a resident of Kentucky at the time the application is submitted
- Must have a disability stemming from illness, injury, aging, or other factors requiring nursing care
- The Veteran’s healthcare needs must fall within the scope of services provided by the Veterans Center
Employment & Job Training Support for Kentucky Veterans
National Guard Service Leave Rights
Kentucky National Guard members called to active duty or training are entitled to a leave of absence from civilian employment. Once released, they must be reinstated to their original job with the same pay, seniority, and benefits. Employers are not required to offer paid leave during this time.
Paid Leave for Military Spouses (State Employees)
State employees in Kentucky who are spouses of Service members can receive one paid day off when their spouse deploys and another upon their return from federal active duty. This applies to both active and reserve component members.
Military Service Retirement Credit
Current or former Service members employed by Kentucky state or local government may be eligible to purchase military service credit for time served. This can boost retirement benefits. In some cases, such as active duty during emergencies, service credit may be granted at no cost.
Reserve component members may buy credit at a rate of 1 month for every 6 months of service. The cost depends on factors such as pay, years of service, and age.
Veterans’ Preference in Kentucky State Hiring
Veterans and eligible family members applying for initial classified positions in Kentucky government receive interview preference, provided they meet all qualifications and submit the proper documentation by the job posting deadline. Service during wartime is not required. National Guard and Reservists do not need to have been activated to qualify.
Reemployment Protection for Public Employees
Public employees in Kentucky who leave their job for military service and receive an honorable discharge are guaranteed reemployment in their previous or equivalent position. During wartime or emergency service, they must return within six months. For peacetime or recovery periods, they must return within 90 days.
Federal Hiring Preferences for Veterans
Veteran Points for Civil Service Hiring
Federal hiring preferences grant Veterans additional points on exams:
- 5-Point Preference: Granted for service during war, specific timeframes (e.g., Gulf War, Vietnam), or for campaign medal recipients.
- 10-Point CP (Compensable Disability): For those with a 10–29% service-connected disability.
- 10-Point CPS (30% or More Disability): For Veterans rated 30%+ disabled.
- 10-Point XP (Other Disabilities or Purple Heart): For those with a service-connected disability or Purple Heart recipients.
- 10-Point Derived Preference: Given to eligible spouses, surviving spouses, or mothers of qualified Veterans, particularly if the Veteran is unable to work or is deceased due to service.
Veterans must typically meet a 24-month continuous active duty requirement unless they were separated for hardship, disability, or certain other criteria.
USERRA: Federal Job Protections for Service Members
The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the job and benefit rights of individuals who leave employment for military service.
Key protections include:
- Job Reinstatement: Service members must be returned to their previous or a comparable job with the same seniority, status, and pay.
- Leave Duration: Up to five years of military leave is protected, with exceptions for training, involuntary service, or emergencies.
- Disability Accommodation: Employers must make reasonable accommodations for disabled Veterans.
- Health & Pension Continuation: Military members can continue employer-sponsored health coverage for up to 24 months. Pension rights are also preserved.
Eligibility: Applies to Veterans and reserve component members who leave employment for service or training.
The Department of Labor (VETS) assists in handling USERRA-related claims, including for federal employees.
Burials and Memorials
Important Burial Information for Veterans:
It’s essential to record your wishes concerning interment in a national cemetery and the use of a VA-provided headstone. Be sure these preferences are stored securely alongside your medical and service documentation. National cemeteries offer several burial benefits at no cost to Veterans, including a gravesite or columbarium niche, the opening and closing of the grave, ongoing maintenance, a headstone or marker, and an optional concrete liner for casketed burials. Non-Veteran interments carry a $500 fee.
Basic Eligibility Guidelines:
- Separated from active duty in the U.S. Armed Forces under conditions other than dishonorable
- Passed away while on active duty
- Completed at least 20 years of service in the National Guard or Armed Forces Reserves and qualifies for military retirement pay (or would have qualified if not for a death before age 60)
- Reserve members who were federally activated (excludes active duty for training)
- Spouses and dependent children (unmarried children under 21, or under 23 if attending school full-time; children with permanent disabilities developed before age 21 may also qualify)
Kentucky Residency Criteria (at least one must apply):
- Born in Kentucky
- Stationed in Kentucky during military service
- Previously resided in Kentucky
- Listed Kentucky as the home of record
National Cemeteries include:
Danville: Danville National Cemetery
Lebanon: Lebanon National Cemetery
Lexington: Lexington National Cemetery
Louisville: Cave Hill National Cemetery
Louisville: Zachary Taylor National Cemetery
Nancy: Mill Springs National Cemetery
Nicholasville: Camp Nelson National Cemetery
Southgate: Evergreen Cemetery Soldiers’ Lot
Kentucky Veteran Benefit Resources
Veterans in Kentucky have access to support through a Regional VA Benefits Office and several VA Medical Centers across the state.
Kentucky VA Regional Benefits Office
- Louisville: Louisville Regional Office
Kentucky VA Medical Centers
- Ft. Thomas: Cincinnati VA Medical Center-Fort Thomas
- Lexington: Lexington VAMC: Cooper Division
- Lexington: Lexington VAMC: Leestown Division
- Louisville: Robley Rex VA Medical Center
Key Details About Kentucky Veteran Benefits
Veterans applying for VA benefits for the first time must include a copy of their DD Form 214 (Certificate of Release or Discharge from Active Duty). This document confirms your discharge status and includes critical information such as your full name, Social Security number, service branch, and service dates. In most cases, an honorable or general discharge qualifies you for VA benefits.
It’s essential to store your discharge documents and medical records in a secure, easily accessible location for both you and your family. Using a fireproof safe or similarly protected area is highly recommended to prevent damage or loss.
Eligibility for the majority of VA benefits depends on being discharged from active duty under conditions other than dishonorable. Active duty refers to full-time service in the Army, Navy, Air Force, Marine Corps, Coast Guard, or as a commissioned officer in the Public Health Service, NOAA, or the Environmental Science Services Administration.
Veterans who were dishonorably discharged as a result of a general court-martial may be disqualified from receiving VA benefits. However, incarcerated Veterans and those on parole may still qualify for limited VA assistance. Local VA regional offices can help determine eligibility for individuals with complex discharge histories or incarceration status.
Information current as of November 2023
Veteran Benefits in Kentucky
Disabled Veterans in Kentucky with a VA disability rating of 90% or lower may qualify for extra support and services. Reach out to Vital Veterans Consultants for a no-cost, no-obligation consultation. Our team can evaluate your claim to see if you’re eligible for additional benefits.
