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Level 1

Could you please clarify if Military Retirement Income with a code of 632 is considered a valid deduction for Indiana state listed on Schedule 2, line 11 a?

Submitted State taxes through turbotax, received letter from Indiana dept of Revenue stating incorrect calculations made.  The state did not recognize the military retirement income as tax deductible as shown in the Schedule 2 form.

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Level 18

Could you please clarify if Military Retirement Income with a code of 632 is considered a valid deduction for Indiana state listed on Schedule 2, line 11 a?

Military retirement is still deductible in Indiana using code 632. Indiana instructions clearly state

Military Retirement Income and/or Survivor’s Benefits
Deduction 632
The income on line 1 of Form IT-40 may include military retirement income and/or survivor’s benefits. If it does, you (and/or your spouse, if married filing jointly and both qualify) may be eligible to take this deduction.
Beginning in 2018:
• There is no minimum age requirement to be eligible for the
military retirement income deduction, and
• The maximum amount to be deducted has increased from $5,000
to $6,250.

Your deduction will be the amount of military retirement income and/or survivor’s benefits included on line 1 of Form IT-40 or $6,250, whichever is less. If both you and your spouse received military retirement income and/or survivor’s benefits, you may each claim the deduction for a maximum of $12,500 (up to $6,250 each). Important. You must enclose your military retirement income statement and/or survivor’s benefit statement with the tax return if you are claiming this deduction.

For more information about this deduction see Income Tax Information Bulletins #6 at www.in.gov/dor/3650.htm. Enter code 632 on Schedule 2 under line 11 if claiming this deduction[emphasis mine].


See the Indiana individual income tax instructions on page 21 at forms.in.gov/Download.aspx?id=13952

Also see 2018 IND Form Revision Highlights published by the state at www.in.gov/dor/files/2018-ind-form-revision-highlights.pdf

 

Is it possible that this retirement is not from one of the regular branches of the Armed Forces?

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Level 18

Could you please clarify if Military Retirement Income with a code of 632 is considered a valid deduction for Indiana state listed on Schedule 2, line 11 a?

Military retirement is still deductible in Indiana using code 632. Indiana instructions clearly state

Military Retirement Income and/or Survivor’s Benefits
Deduction 632
The income on line 1 of Form IT-40 may include military retirement income and/or survivor’s benefits. If it does, you (and/or your spouse, if married filing jointly and both qualify) may be eligible to take this deduction.
Beginning in 2018:
• There is no minimum age requirement to be eligible for the
military retirement income deduction, and
• The maximum amount to be deducted has increased from $5,000
to $6,250.

Your deduction will be the amount of military retirement income and/or survivor’s benefits included on line 1 of Form IT-40 or $6,250, whichever is less. If both you and your spouse received military retirement income and/or survivor’s benefits, you may each claim the deduction for a maximum of $12,500 (up to $6,250 each). Important. You must enclose your military retirement income statement and/or survivor’s benefit statement with the tax return if you are claiming this deduction.

For more information about this deduction see Income Tax Information Bulletins #6 at www.in.gov/dor/3650.htm. Enter code 632 on Schedule 2 under line 11 if claiming this deduction[emphasis mine].


See the Indiana individual income tax instructions on page 21 at forms.in.gov/Download.aspx?id=13952

Also see 2018 IND Form Revision Highlights published by the state at www.in.gov/dor/files/2018-ind-form-revision-highlights.pdf

 

Is it possible that this retirement is not from one of the regular branches of the Armed Forces?