INDIANA — New for this year’s Indiana Individual income tax return is a deduction for military pay earned by Hoosiers who are active or reserve members of the Armed Forces of the United States or the National Guard.
Retired military service members, or their surviving spouse, may also be eligible for this deduction.
This deduction is equal to 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 a service member and their spouse received military income, they may each claim the deduction for a maximum of $10,000.