Per the IN IT-40 Booklet:
"Line 7 – Military Service Deduction (active duty armed forces members only)Note. National Guard and armed forces reserves members will not report the deduction for their income on this line. Please see the instructions for Line 11, National Guard and Reserve Component Members Deduction on page 22.
Important. The military service deduction and the military retirement income and/or survivor’s benefits deduction are reported in two different places.
You (and/or your
- spouse, if married filing jointly and both qualify) will report your active military service income deduction here.
- You (and/or your spouse, if married filing jointly and both qualify) will report your military retirement income and/or survivor’s benefits deduction on Schedule 2 under line 11, Other Deductions. See the instructions for Military Retirement Income and Survivor’s Benefits Deduction on page 22.
The income on line 1 of Form IT-40 may include military pay from active duty in the armed forces (reserve). If it does, you may be eligible to take this deduction.
Beginning in 2024, this deduction is for the full amount of military pay included in your federal adjusted gross income.
Military Retirement Income and/or Survivor’s Benefits Deduction 632
The income on line 1 of Form IT-40 may include military retirement income and/or survivor’s benefits. If it does, you (and/or your spouse, if married filing jointly and both qualify) may be eligible to take this deduction. For 2022 and later, the deduction is equal to the entire
amount of military retirement income and/or survivor’s benefits."
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.