You may qualify for the Indiana Disability Income deduction if you meet ALL of the following requirements:
• you were under age 65 on December 31 of the tax year for
which you are claiming the deduction;
• you retired on disability before December 31 of that year;
and
• you were permanently and totally disabled when you
retired.
If you qualify for the Indiana disability retirement deduction,
you may be eligible to subtract up to $5,200 a year of your
disability payments from your gross income. The amount
you subtract is limited to the amount of disability pay you actually received or $100 a week, whichever is less, and may
have to be reduced by part of your Federal Adjusted Gross
Income.
Your spouse may also be eligible to subtract up to $5,200 of
disability payments if you file a joint return and your spouse
meets all the above requirements.
Note: In no case may the total deduction be more than
$10,400 on a joint return.
In TurboTax, on the page titled Here's how Indiana handles income differently, scroll down to Disability retirement income (or some such wording)
