Frye's Bill to Phase-In Complete Tax Exemption for Military Pay Signed into Law

Frye's plan will allow for full exemption by 2027.

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INDIANAPOLIS – A bill authored by State Rep. Randy Frye (R-Greensburg) was signed into law today.

Governor Eric Holcomb signed House Bill 1034, which would phase-in a complete state income tax exemption for military pay earned by active-duty members.

When introducing the bill earlier this year, Frye said, “We need and want skilled veterans to call Indiana home. With this tax cut, we can incentivize more military members to settle here in our state, and help honor their commitment to serving our great nation."

Under the legislation, the first phase would include a 25 percent exemption on military pay in 2024. The exemption would increase 25 percent each year until full exemption in 2027.

Neighboring states of Michigan and Kentucky already offer a complete military income tax exemption for residents.

See a full list of bills that have been signed into law this legislative session at https://www.in.gov/gov/newsroom/2023-bill-watch/.