Indiana - Senate Enrolled Act 480 - Military Income
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Senate Enrolled Act 480 exempts active-duty military pay from Indiana's income tax and increases the maximum allowable state income-tax deduction on military pay, including retirement and survivors' benefits, from $2,000 to $5,000 ($10,000 for couples filing jointly).
If you cannot open the link above, alternatively you can click on the link for the Indiana IT-40 Booklet at the Indiana webpage for individual taxpayers for the following information:.
Line 7 - Military Service Deduction
The income on line 1 of Form IT-40 may include active or reserve military pay. If it does, you will be able to take a deduction (regardless of your age).
Also, if you are retired from the military or are the surviving spouse of a person who was in the military, you may be able to take this deduction. You will be eligible if:
You were at least 60 years of age by Dec. 31, 2014,
You were receiving military retirement or survivor's benefits in 2014, and
The benefits received as retirement income were reported on your federal return.
Your deduction will be the actual amount of military income received (i.e. military pay, retirement pay and/or survivor's benefits) or $5,000, whichever is less. If both you and your spouse received military income, you may each claim the deduction for a maximum of $10,000.
Important: If you served in the Indiana National Guard or the reserve component of the armed forces during 2014, see the National Guard and reserve component members deduction on page 22.
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