IN HB1071

Amends Indiana Code section IC 6-3-2-3.7 to modify the state income tax deduction for federal civil service annuity income, effective January 1, 2015.

Sets the maximum deduction equal to the lesser of: (1) the amount of 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.

Reduces the deduction by the total amount of Social Security benefits and railroad retirement benefits received during the taxable year.

Extends deduction eligibility to surviving spouses, removing the age 62 requirement that applies only to individual recipients.

The department must publish notice in the Indiana Register annually setting forth the applicable deduction amount for each taxable year.