Kentucky Veteran Tax Exemptions 2026

Kentucky does not tax your VA disability compensation. The state keeps that income off your taxable return entirely, so what you earn from your rating is what you keep. On the property side, Kentucky offers a homestead exemption for qualifying disabled veterans that reduces the assessed value of your primary home. Between the two, there are real dollars worth claiming if you know where to look. This page walks through both and shows you how to apply.

Does Kentucky tax VA disability income?

No. Kentucky does not tax VA disability compensation. The state treats it the same way the federal government does, which means it is left off your taxable income entirely. Whether you are rated 10 percent or 100 percent, your VA disability pay is not taxed by Kentucky.

Kentucky property tax exemption for disabled veterans

$46,350 homestead exemption. $46,350 homestead exemption for 100% rated vets.

The homestead exemption in Kentucky reduces the assessed value of your home directly, which lowers your property tax bill every year you own and occupy the property as your primary residence.

What rating do you need in Kentucky?

The size of your break depends on your combined VA rating. In Kentucky, the break is tiered, so even a partial rating can lower your property tax bill, and the amount climbs as your rating climbs. Not sure what your combined rating works out to? Run it through our VA disability calculator first, and if you are aiming for the top tier, check whether you qualify for Permanent and Total status.

How to claim your Kentucky exemption

1. Confirm your current combined rating and whether it is Permanent and Total. Your VA award letter shows both.
2. Gather your DD-214 and your VA disability award letter. Most Kentucky offices ask for both.
3. Contact your county tax assessor for the property tax exemption, and the your state tax agency or Department of Veterans Affairs for the income side.
4. File before your county deadline. Many counties require you to apply once, then renew only if your rating changes.

Always confirm the current figures and deadlines with your county assessor and the Kentucky Department of Veterans Affairs before you rely on them. Rules and dollar amounts change year to year.