topic A new Indiana law exempts from state income tax all the military pay of active-duty service members and members of reserve units, including the state's National Guard. in Tax help for military filers

A new Indiana law exempts from state income tax all the military pay of active-duty service members and members of reserve units, including the state's National Guard.

andrew-chrisrale — Tue, 10 Feb 2026 09:47:30 GMT

The up-to $5,000 deduction should be replaced with this exemption, so why is it not?

Re: A new Indiana law exempts from state income tax all the military pay of active-duty service members and members of reserve units, including the state's National Guard.

xmasbaby0 — Sun, 21 Jan 2024 01:30:40 GMT

Maybe you are waiting for some forms. Click Review to see if you are missing some forms needed in order to e-file.

Many federal and state forms are not yet available. Check here for form availability. The dates are subject to change.

No hurry to e-file since the IRS will not begin to accept/reject 2023 e-files until January 29. And….a state return cannot be accepted until after the IRS accepts your federal return.

Re: A new Indiana law exempts from state income tax all the military pay of active-duty service members and members of reserve units, including the state's National Guard.

S_Kelley — Tue, 27 Feb 2024 02:20:09 GMT

This doesn’t seem to be fixed yet. I still only get the $5000 deduction. Has there been a correction submitted?

Re: A new Indiana law exempts from state income tax all the military pay of active-duty service m...

DawnC — Tue, 27 Feb 2024 02:37:48 GMT

The full deduction is goes into effect next tax year. For 2023, it is still $5K. @S_Kelley

For 2023 and earlier, Indiana adjusted gross income tax applies to members of the active component of the armed forces of the U.S. Indiana resident regular members of the armed forces are subject to tax on all income, regardless of source.

For 2024 and later, Indiana resident regular members of an active component of the armed forces are exempt from income tax on their wages derived from their service in the armed forces. However, Indiana resident regular members of an active component of the armed forces are subject to tax on all other income, regardless of source. Source

For years before 2022, military personnel on active duty or in the active reserves may deduct up to $5,000 of their military pay if it was not already excluded or deducted from their adjusted gross income.

For 2023, this deduction is available only for members of the active components of the armed forces. Members of the reserve components and National Guard will claim a full deduction; see the “National Guard and Reserve Components Members Deduction” below.