STATEHOUSE (Feb. 15, 2023) – The Indiana House of Representatives advanced legislation supported by Henry County lawmakers that would phase-in a complete state income-tax exemption for military pay earned by active-duty members.
State Rep. Cory Criswell (R-Middletown), co-author of the bill, 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.
"Henry County is home to many skilled veterans, and it's important we continue to encourage more active-duty military to locate to our communities when they transition out of service," Criswell said. "This tax cut would help attract more service members to our state and boost our workforce pipeline."
State Rep. Brad Barrett (R-Richmond), who also co-authored the bill, 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.
"Many states already offer these benefits to active-duty military, and that means Indiana is losing out on service members locating here," Barrett said. "We want to them to know that our doors are open. We want our nation's service members to choose our state and hopefully join our workforce or start a business, and raise their families here."
Neighboring states including Michigan and Kentucky offer a complete military income tax exemption for residents.
"Removing income-taxes for active-duty Hoosiers will benefit the state in many ways," said State Rep. J.D. Prescott (R-Union City), who serves on the House Ways and Means Committee. "Filling job openings, bolstering our local economy and recognizing Hoosiers in the service are all great by-products of this bill."
For more information and to follow legislative proceedings, visit iga.in.gov.
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State Rep. Brad Barrett (R-Richmond) represents House District 56,
which includes all of Wayne County and a portion of Henry County.
Click here to download a high-resolution photo.
State Rep. Cory Criswell (R-Middletown) represents House District 54,
which includes portions of Hancock, Henry, Rush and Shelby counties.
Click here to download a high-resolution photo.
State Rep. J.D. Prescott (R-Union City) represents House District 33,
which includes all of Randolph and Blackford counties, and portions of Jay, Delaware and Henry counties.
Click here to download a high-resolution photo.
