Thank you for the response. I finally spoke with two senior supervisors at the Indiana Department of Revenue who provided concrete responses ( see below):
Q1: Does IB27 National Guard/Reserve exemption include Indiana Residents living in Indiana who are serving in other state's National Guard or Reserve units? (if not, then do we get any exemption?)
YES! All Indiana residents serving in National Guard and Reserve (including the NG units of other states) ARE ELIGIBLE for this deduction. **Note, if they are mobilized, then there is the Military Service Deduction, whihc has a different tax situation.
Q2: Does IB27 exemption include full time dual status pay?
YES! Dual Status, Title 32 Technicians and Title 10 Air Reserve Technicians ARE ELIGIBLE for this deduction.
Q3: If dual status tech pay is eligible, how should I code it in TurboTax to indicate military association? (we get separate W-2s from the Defense Pay Office, so do I just code both income sources as "active duty pay"?)
**I had to work with TurboTax to use the desktop version as the online version doesn't fully support marking the Technician W-2s correctly. This is true for 2023 and 2024. I just attempted to use the 2024 online version and it doesn't code the full time pay. If you only need to tag the part-time traditional Guard pay W-2 then the online version works fine. Customer Service will have to hook you up with a downloadable version.
Q4: Is there a cap on the exemption, or is it fully exempt? (some articles appear to say $5,000 but that appears to be either dated or related to active duty pay).
Prior to 2023, there was a cap. For Tax Year 2023 and 2024, military income is fully exempt from State income tax. HOWEVER, local city and counties may still impose an income tax, and ANY non-military income is still subject to state income tax.
This was almost verbatim from IN State Income Tax officials.... Hope this helps!
