Does Indiana tax military retirement pay?
Not taxed
No. For 2022 and later, Indiana's deduction equals the whole amount of military retirement income and survivor's benefits.
In the state's own words
Copied word for word from the official document linked below each quote:
“For 2022 and later, the deduction is equal to the entire amount of military retirement income and/or survivor’s benefits.”
Other retirement income in Indiana
Yes, generally. Indiana's deductions for retirement income are narrow: up to $16,000 of a federal civil service annuity at 62 or older, and all military retirement income. We found no general exclusion for other pensions or IRA withdrawals in the department's list of deductions. The Indiana pension page has the details, and the Indiana Social Security page covers Social Security. No. Indiana does not tax Social Security; any amount taxed on your federal return is deducted on the Indiana return.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the Indiana Department of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- DeductionsIndiana Department of Revenue. Read on November 13, 2026.