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Income tax changes coming in 2024 for Indiana citizens, military servicemembers

tax form

Indiana's individual income tax rate will go from 3.15 percent to 3.05 percent in 2024 as part of an acceleration of income tax cuts passed in 2022. (Lauren Chapman/IPB News)

Members of the military won’t have to pay income tax in Indiana, starting next year, while the rate goes down for all other Hoosiers.

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

The Hoosier State 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.

READ MORE: Indiana losing ground to average Midwesterners in real per capita personal income

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

For someone making $50,000 a year, that means a savings of $50.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

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