STATEHOUSE (Feb. 15, 2023) – The Indiana House of Representatives recently advanced legislation co-authored by State Rep. Lorissa Sweet (R-Wabash) that would phase-in a complete state income-tax exemption for military pay earned by active duty members.
Sweet 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.
"Indiana continues to be a welcoming state for our active duty service members," Sweet said. "This bill is a reflection of our strong support for them and another way to encourage service members to choose Indiana when transitioning to civilian life."
Sweet said Indiana is already facing a skilled labor shortage, with more than 85,000 open job opportunities. She said veterans, with the necessary leadership and technical skills, could help fill these positions and help drive the workforce.
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. Lorissa Sweet (R-Wabash) represents House District 50,
which includes all of Huntington County, and portions of Miami, Wabash and Wells counties.
Click here to download a high-resolution photo.
