My Indiana tax return shows taxable social security. Did I enter something wrong?

[lisakresnak]

How does Indiana tax social security?

[ThomasM125 · Accepted solution]

Indiana does not tax social security benefits. You will see them listed on Indiana Schedule 2, line 5, but that is just so they can be added to other items on that schedule, the total of which is listed on line 4 of Form IT-40. The amount on line 4 of Form IT-40 is them subtracted from the your federal adjusted gross income as a starting point to determine your Indiana taxable income. So, the social security benefits are listed on your Indiana tax return, but they are not included in your Indiana taxable income.