HB 1294 Summary

• Modifies the state income tax deduction for federal civil service annuity income to equal the lesser of: (1) the actual federal civil service annuity income received during the taxable year, or (2) the average annual federal Social Security retirement benefit paid to Indiana retired workers during the preceding calendar year.

• Retains the requirement to reduce the deduction by any federal Social Security and railroad retirement benefits received by the taxpayer during the taxable year.

• Extends the deduction eligibility to include a surviving spouse of a federal civil service annuitant, removing the age 62 requirement for surviving spouses.

• Requires the Department of Revenue to publish the applicable average Social Security benefit amount in the Indiana Register annually for each taxable year.

• Effective January 1, 2013 (retroactive) and applies to taxable years beginning after December 31, 2012.