Sec. 4. (a) Each taxable year, an individual, or the individual’s surviving spouse, is entitled to the following:

(1) An adjusted gross income tax deduction for the first five thousand dollars ($5,000) of income, excluding adjusted gross income described in subdivision (2), received during the taxable year by the individual, or the individual’s surviving spouse, for the individual’s service in an active or reserve component of the armed forces of the United States, including the army, navy, air force, coast guard, marine corps, merchant marine, Indiana army national guard, or Indiana air national guard.

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Terms Used In Indiana Code 6-3-2-4

  • adjusted gross income: shall mean the following:

         (a) In the case of all individuals, "adjusted gross income" (as defined in Section 62 of the Internal Revenue Code), modified as follows:

    Indiana Code 6-3-1-3.5

  • United States: includes the District of Columbia and the commonwealths, possessions, states in free association with the United States, and the territories. See Indiana Code 1-1-4-5
  • Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(2) An adjusted gross income tax deduction for income from retirement or survivor’s benefits received during the taxable year by the individual, or the individual’s surviving spouse, for the individual’s service in an active or reserve component of the armed forces of the United States, including the army, navy, air force, coast guard, marine corps, merchant marine, Indiana army national guard, or Indiana air national guard. The amount of the deduction is the lesser of:

(A) the benefits included in the adjusted gross income of the individual or the individual’s surviving spouse; or

(B) six thousand two hundred fifty dollars ($6,250) plus the following:

(i) For taxable years beginning in 2019, twenty-five percent (25%) of the amount of the benefits in excess of six thousand two hundred fifty dollars ($6,250).

(ii) For taxable years beginning in 2020, fifty percent (50%) of the amount of the benefits in excess of six thousand two hundred fifty dollars ($6,250).

(iii) For taxable years beginning in 2021, seventy-five percent (75%) of the amount of the benefits in excess of six thousand two hundred fifty dollars ($6,250).

(iv) For taxable years beginning after 2021, one hundred percent (100%) of the amount of the benefits in excess of six thousand two hundred fifty dollars ($6,250).

     (b) An individual whose qualified military income is subtracted from the individual’s federal adjusted gross income under IC 6-3-1-3.5(a)(18) for Indiana individual income tax purposes is not, for that taxable year, entitled to a deduction under this section for the same qualified military income that is deducted under IC 6-3-1-3.5(a)(18).

As added by Acts 1977, P.L.78, SEC.3. Amended by P.L.76-1985, SEC.2; P.L.144-2007, SEC.5; P.L.6-2012, SEC.49; P.L.250-2015, SEC.16; P.L.217-2017, SEC.64; P.L.214-2018(ss), SEC.7; P.L.162-2019, SEC.1.

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