STATEHOUSE – The Indiana House of Representatives recently advanced legislation co-authored by State Rep. Chris May (R-Bedford) that would phase in a complete state income-tax exemption for military pay earned by active duty members.
May 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, a 50% exemption in 2025, a 75% exemption in 2026, and end with a full exemption by 2027.
“Our region hosts one of the largest Navy installations worldwide in the Naval Surface Warfare Center, Crane Division,” May said. “With that kind of local impact, we should do everything we can to make Indiana a welcoming state for service members to call home.”
May 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.
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.
