STATEHOUSE (Feb. 13, 2023) – The Indiana House of Representatives recently advanced legislation co-authored by State Reps. David Abbott (R-Rome City) and Chris Judy (R-Fort Wayne) that would phase in a complete state income-tax exemption for military pay earned by active-duty members.
Abbott said unlike active duty National Guard and reserve members who are exempt from the individual income tax, other active duty members can qualify for a maximum $5,000 exemption. House Bill 1034, which now moves to the Indiana Senate for consideration, would start with a 25% exemption on military pay in 2024, 50% exemption in 2025, 75% exemption in 2026, and end with a full exemption by 2027.
"We value our service members and we want them to call Indiana home," Abbott said. "This would be a great step to show our support for their service and boost our workforce pipeline."
Judy said Indiana is already facing a skilled labor shortage, with more than 85,000 open job opportunities. He said veterans, with the necessary leadership and technical skills, could help fill these positions and help drive the workforce.
"Military members make tremendous sacrifices to protect our great nation," said Judy, an Indiana National Guard and Iraq War veteran. "Exempting their income taxes would be one more way to show them our support, and serve as a reminder that Indiana is a welcoming state for our men and women in uniform."
Neighboring states including Michigan and Kentucky offer a complete military income tax exemption for residents.
For more information and to follow legislative proceedings, visit iga.in.gov.
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State Rep. David Abbott (R-Rome City) represents House District 18, which
includes portions of Elkhart, Kosciusko, Noble and Whitley counties.
Click here to download a high-resolution photo.
State Rep. Chris Judy (R-Fort Wayne) represents House District 83,
which includes portions of Allen and Whitley counties.
Click here to download a high-resolution photo.
