You need to complete this schedule and file with Form 740 if:
1. Your taxable pension and retirement income from all sources is greater than $35,000; and (a) you are retired from the federal government, the Commonwealth of Kentucky or a Kentucky local government; or (b) you receive supplemental U.S. Railroad Retirement Board benefits.
2. you file Form 4972-K, Tax on Lump-Sum Distributions.
To generate Schedule P:
Open your State return.
Continue and Click Yes on the screen asking about Government Pension Income.
Answer the question if you retired before January 1, 1998. [If you did, your pension will be exempted once you enter the retirement date and pension amount on the next screen.]
If you answered NO you will need to answer questions in the following screens that will allow additional amounts of your pension to be exempted from income.
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