Form It-40 - Indiana Full-Year Resident Individual Income Tax Booklet - 2013 Page 24
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60federal Schedule C (Profit or Loss from Business). He is eligible to
Or, a member of:
deduct the $3,140 difference ($4,500 - $1,360) on Indiana Schedule 2
•
the Indiana Army National Guard; or
under line 11.
•
the Indiana Air National Guard.
More information about this program is available at the following
What is eligible to be deducted?
website
If you are eligible (based on the above requirements), your deduction
is the qualified military income* received during the period you were
Important. Keep a copy of the premium statements as the department
deployed or mobilized for full time service, or during the period your
can require you to provide this information.
Indiana National Guard unit was federalized.
* Military income received due to service in a combat zone is not tax-
Enter code 608 on Schedule 2 under line 11 if claiming this deduction.
able on your federal or state income tax returns. Since Indiana is not
Law enforcement reward deduction
611
taxing this income, your combat zone income is not eligible for this
deduction.
You may be eligible for this deduction if you reported an amount you
received as a reward as “other income” on line 21 of your federal Form
What is qualified military income?
1040.
Qualified military income is military wages paid to a member of a
reserve component of the armed forces or the Indiana National Guard
You may be able to deduct the lesser of the amount received or $1,000
for the period during the member’s full-time service in a reserve
if:
component of the armed forces or the period when Indiana National
•
You received a reward for providing information to a law enforce-
Guard unit was federalized.
ment official or agency,
•
Your information assisted in the arrest, indictment or the filing of
Note. You cannot claim both this deduction and the Military service
charges against a person, and
deduction (see page 20) based on the same income. See the following
•
You are not compensated for investigating crimes, the person con-
example.
victed of the crime or the victim of the crime.
Example. Brandon is a member of the Indiana National Guard.
Enter code 611 on Schedule 2 under line 11 if claiming this deduction.
•
From January through Oct. 15, Brandon earned $6,000 from the
guard.
Medical savings account deduction
612
•
His unit was federalized on Oct. 16. He earned $7,000 from that
You may be eligible for a deduction if your employer deposited funds
point through Dec. 1.
in certain medical care savings accounts. If you received Form IN-
•
His unit was assigned to a combat zone on Dec. 2, and he earned
MSA from the account provider you should deduct any medical with-
$3,000 from then until the end of the year.
drawals and exempt interest income reported in Box 2 and/or Box 7.
•
Brandon’s military W-2 shows $13,000 in Box 1, Wages, tips, other
compensation (the combat zone income is not included in Box 1
Note. You are not eligible to claim this deduction if you also claimed a
because it is not taxable).
medical savings account deduction on the front page of federal Form
1040.
Brandon is eligible for both Indiana military deductions. First, he will
claim the $5,000 maximum military service deduction on Schedule 2,
Make sure you enclose Form IN-MSA or your claimed deduction will
line 7, based on the $6,000 income earned through Oct. 15. Then, he
be denied.
will claim the National Guard and reserve components deduction of
$7,000 (full amount of income earned after his unit was federalized)
Enter code 612 on Schedule 2 under line 11 if claiming this deduction.
under line 11. Note: He will not deduct the $3,000 income earned
while stationed in a combat zone because it was not taxed to begin
National Guard and reserve component members
with.
deduction
621
(also see the Military service deduction on page 20)
Military withholding statements must be attached to the tax return
There is a deduction available for certain members of the reserve com-
when claiming this deduction.
ponents of the armed forces and the Indiana National Guard.
Enter code 621 on Schedule 2 under line 11 if claiming this deduction.
Who is eligible?
You must be a member of the reserve components of:
Private school/homeschool deduction
626
•
the Army;
You may be eligible for a deduction based on education expenditures
•
the Navy;
paid for each dependent child who is enrolled in a private school or is
•
the Air Force;
homeschooled.
•
the Coast Guard;
•
the Marine Corps;
•
the Merchant Marine.
Page 24
IT-40 Booklet 2013
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