*HB1280.1*
February 13, 2025
HOUSE BILL No. 1280
_____
DIGEST OF HB 1280 (Updated February 11, 2025 7:46 pm - DI 125)
Citations Affected: IC 6-3; noncode.
Synopsis: Taxation of military income. Exempts military pay for
members of the United States Space Force, the United States Public
Health Service Commissioned Corps, and the National Oceanic and
Atmospheric Administration Commissioned Officer Corps from the
individual income tax. Exempts military pay earned by members of an
active component of the United States Space Force, the United States
Public Health Service Commissioned Corps, and the National Oceanic
and Atmospheric Administration Commissioned Officer Corps from
the individual income tax. Adds members of the United States Space
Force, the United States Public Health Service Commissioned Corps,
and the National Oceanic and Atmospheric Administration
Commissioned Officer Corps for purposes of eligibility for the income
tax deduction for income from military retirement or survivor's
benefits.
Effective: January 1, 2025 (retroactive).
Gore, Bartels, Pack, Commons
January 13, 2025, read first time and referred to Committee on Ways and Means.
February 13, 2025, amended, reported — Do Pass.
HB 1280—LS 6692/DI 125 February 13, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
HOUSE BILL No. 1280
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-3-1-34, AS AMENDED BY P.L.121-2023,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 34. "Qualified military
4 income" means the following:
5 (1) Wages that are paid to a member of a reserve component of
6 the armed forces of the United States, including the United
7 States Space Force, or the National Guard for the member's
8 service in the reserve component or National Guard.
9 (2) For a member of an active component of the armed forces of
10 the United States, including the United States Space Force, one
11 hundred percent (100%) of wages that are paid to the member for
12 taxable years beginning in 2024 and thereafter for service in the
13 active component.
14 (3) Wages that are paid to a member of the United States
15 Public Health Service Commissioned Corps or the National
16 Oceanic and Atmospheric Administration Commissioned
17 Officer Corps for the member's service.
HB 1280—LS 6692/DI 125 2
1 SECTION 2. IC 6-3-2-4, AS AMENDED BY P.L.162-2019,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 4. (a) Each taxable year,
4 an individual, or the individual's surviving spouse, is entitled to the
5 following:
6 (1) An adjusted gross income tax deduction for the first five
7 thousand dollars ($5,000) of income, excluding adjusted gross
8 income described in subdivision (2), received during the taxable
9 year by the individual, or the individual's surviving spouse, for the
10 individual's service in an active or reserve component of the
11 armed forces of the United States, including the army, navy, air
12 force, space force, coast guard, marine corps, merchant marine,
13 Indiana army national guard, or Indiana air national guard, or the
14 United States Public Health Service Commissioned Corps or
15 the National Oceanic and Atmospheric Administration
16 Commissioned Officer Corps.
17 (2) An adjusted gross income tax deduction for income from
18 retirement or survivor's benefits received during the taxable year
19 by the individual, or the individual's surviving spouse, for the
20 individual's service in an active or reserve component of the
21 armed forces of the United States, including the army, navy, air
22 force, space force, coast guard, marine corps, merchant marine,
23 Indiana army national guard, or Indiana air national guard, or the
24 United States Public Health Service Commissioned Corps or
25 the National Oceanic and Atmospheric Administration
26 Commissioned Officer Corps. The amount of the deduction is
27 the lesser of:
28 (A) the benefits included in the adjusted gross income of the
29 individual or the individual's surviving spouse; or
30 (B) six thousand two hundred fifty dollars ($6,250) plus the
31 following:
32 (i) For taxable years beginning in 2019, twenty-five percent
33 (25%) of the amount of the benefits in excess of six
34 thousand two hundred fifty dollars ($6,250).
35 (ii) For taxable years beginning in 2020, fifty percent (50%)
36 of the amount of the benefits in excess of six thousand two
37 hundred fifty dollars ($6,250).
38 (iii) For taxable years beginning in 2021, seventy-five
39 percent (75%) of the amount of the benefits in excess of six
40 thousand two hundred fifty dollars ($6,250).
41 (iv) For taxable years beginning after 2021, one hundred
42 percent (100%) of the amount of the benefits in excess of six
HB 1280—LS 6692/DI 125 3
1 thousand two hundred fifty dollars ($6,250).
2 (b) An individual whose qualified military income is subtracted
3 from the individual's federal adjusted gross income under
4 IC 6-3-1-3.5(a)(18) for Indiana individual income tax purposes is not,
5 for that taxable year, entitled to a deduction under this section for the
6 same qualified military income that is deducted under
7 IC 6-3-1-3.5(a)(18).
8 SECTION 3. [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]
9 (a) IC 6-3-1-34 and IC 6-3-2-4, both as amended by this act, apply
10 to taxable years after December 31, 2024.
11 (b) This SECTION expires July 1, 2028.
12 SECTION 4. An emergency is declared for this act.
HB 1280—LS 6692/DI 125 4
COMMITTEE REPORT
Mr. Speaker: Your Committee on Ways and Means, to which was
referred House Bill 1280, has had the same under consideration and
begs leave to report the same back to the House with the
recommendation that said bill be amended as follows:
Page 1, line 6, after "States" insert ", including the United States
Space Force,".
Page 1, line 9, after "States" insert ", including the United States
Space Force,".
Page 2, line 10, after "force," insert "space force,".
Page 2, line 20, after "force," insert "space force,".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to HB 1280 as introduced.)
THOMPSON
Committee Vote: yeas 19, nays 0.
HB 1280—LS 6692/DI 125