IN SB0240

Provides a 100% income tax deduction for all military service income received by an individual or their surviving spouse, including retirement and survivor's benefits from active or reserve components of the U.S. armed forces.

Removes the previous $5,000 annual deduction cap and eliminates the minimum age requirement (previously 60 years old) for deducting military pension benefits.

Defines "military service income" to include all income from service in the Army, Navy, Air Force, Coast Guard, Marine Corps, Merchant Marine, Indiana Army National Guard, or Indiana Air National Guard.

Prevents double deduction by excluding military income that is already subtracted under IC 6-3-1-3.5(a)(21) from the deduction under this section.

Effective for taxable years beginning after December 31, 2013.