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Income tax changes for 2024

Posted on January 12, 2024

Beginning this tax season, Indiana’s more than 12,000 National Guardsmen will no longer pay state taxes for their service-related income beginning with their 2023 tax returns.

House Bill 1034 — a new Indiana State law, is now in effect and, according to a news release from the Indiana National Guard, the tax exemption applies to:

  • Traditional weekend Hoosier Guardsmen
  • Dual-status Guardsmen and
  • All active National Guard members.

This new tax change in Indiana comes on the heels of the law that took effect in 2022, which phased out state taxes on military veterans’ retirement.

Another bill passed last year exempts servicemembers from the individual income tax, beginning in 2024, for their military pay. This new measure is meant to help encourage those on active duty to make Indiana their residence.

Indiana is also in the middle of a multi-year reduction of the individual income tax for all taxpayers. That cut, passed in 2022, was originally supposed to happen every other year, triggered by increases in state revenues.

However, a change in the 2023 state budget sped up the timeline for the reductions and got rid of the triggers. That means that the next cut happens Jan. 1, 2024, with the rate going from 3.15 to 3.05 percent.

That reduction is small, but worth mentioning. Teipen CPAs offer this example:  For a taxpayer making $50,000 a year, that means a savings of $50.

Our CPAs happily work with all those involved in the U.S. Military, and can help families of those serving to take advantage of all tax breaks legally possible.