Veterans transitioning to civilian life often consider relocation for a number of reasons, one of the most impactful being a state’s economic benefits for veterans. That’s part of what makes Indiana a strong candidate for both local and incoming veterans; in terms of tax benefits, Indiana has a wide array of different deductions that can provide significant financial assistance to qualifying veterans.
There are several sources of military pay that entitle veterans to significant deductions. Previously, military retired pay was taxed with a deduction of 75%. As of 2022, military retired pay is not taxed at all! This means that no part of a veteran’s retirement counts as taxable income!
Indiana is increasing tax exemptions and deductions for veterans with disabilities and military survivor benefits. Starting this year, all survivor annuity payments are fully tax exempt. Disabled veterans over 62 may claim a $14,000 deduction in property taxes and disabled veterans who served during World War II, the Korean War, the Vietnam War, or the Gulf War are entitled to an additional $24,960 deduction. These deductions significantly increase the affordability of home ownership for qualifying veterans. Refer to this page for more specific information regarding qualifications for these property tax deductions. Notably, those who have a “total disability” rating from the VA qualify even without their disability being related to their service.
There are even some tax incentives that impact a veteran’s spouse in addition to personal benefits. For example, military spouses who are not residents do not have to pay income tax in Indiana, even including pay earned while working in Indiana. There are several benefits that can be claimed by a spouse after their veteran partner passes.
There are a huge variety of veteran tax benefits in Indiana. However, these are not the only economic incentives for choosing Indiana for civilian life. There are numerous education benefits that not only apply to the veteran, but their children as well. There is also relocation assistance that helps break down difficult aspects of relocation and make it a manageable process for every veteran. Further assistance can be offered by non-profits, like INVets, operating in Indiana. INVets can help you simplify the process of relocation by offering connections to career opportunities and helping veterans understand how to fully take advantage of the benefits they are offered both federally and at the state level here in Indiana. Get started with us today to find out how we can help you best.