IN HB1468

Provides a 100% state income tax deduction for all military service income received by individuals and their surviving spouses, effective January 1, 2018.

Defines "military service income" as all income, including retirement or survivor's benefits, received for service in an active or reserve component of the armed forces of the United States, including the Army, Navy, Air Force, Coast Guard, Marine Corps, Merchant Marine, Indiana Army National Guard, or Indiana Air National Guard.

Repeals the previous $5,000 income cap on military service deductions and removes the age restriction (previously limited to those age 60 or older for retirement benefits).

Applies to taxable years beginning after December 31, 2017, and includes a sunset provision expiring July 1, 2021.

Amends Indiana Code sections IC 6-3-1-3.5 and IC 6-3-1-34 to implement the expanded deduction and consolidate military income definitions.