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2026 rules · verified against Indiana's primary source
Indiana fully exempts military retirement pay from state income tax.
Military retirement income and survivor benefits are 100% deductible (fully phased in for tax year 2022 and later). Indiana has a flat rate (2.95% for 2026).
Treatment
fully exempt
Top marginal rate
2.95%
Source: https://www.in.gov/dor/i-am-a/individual/deductions/ · verified July 2026
Estimated Indiana state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
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