Introduced Version






SENATE BILL No. 298

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-3-2-4.

Synopsis: Taxation of military pensions. Allows a deduction from adjusted gross income for military retirement benefits converted to federal civil service retirement benefits.

Effective: January 1, 2008.





Merritt




    January 11, 2007, read first time and referred to Committee on Tax and Fiscal Policy.







Introduced

First Regular Session 115th General Assembly (2007)


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SENATE BILL No. 298



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-3-2-4; (07)IN0298.1.1. -->     SECTION 1. IC 6-3-2-4 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2008]: Sec. 4. (a) Each taxable year, an individual, or the individual's surviving spouse, is entitled to an adjusted gross income tax deduction for the first two thousand dollars ($2,000) of income, including retirement or survivor's benefits, received during the taxable year by the individual, or the individual's surviving spouse, for the individual's service in an active or reserve component of the armed forces of the United States, including the army, navy, air force, coast guard, marine corps, merchant marine, Indiana army national guard, or Indiana air national guard. However, a person who is less than sixty (60) years of age on the last day of the person's taxable year, is not, for that taxable year, entitled to a deduction under this section for retirement or survivor's benefits.
     (b) If an individual:
        (1) is entitled to retirement benefits for the individual's service in an active or reserve component of the armed forces of the United States; and
        (2) converts the benefits to which the individual is entitled from the armed forces retirement system to the federal civil service retirement system;
the individual is entitled to a deduction equal to the amount determined under subsection (c).
    (c) A deduction allowed under subsection (b) is equal to the lesser of:
        (1) the amount of the individual's retirement benefit converted from the armed forces retirement system to the federal civil service retirement system for the taxable year; or
        (2) two thousand dollars ($2,000).
    (d) To claim a deduction under subsection (b), an individual must submit a certified statement on a form prescribed by the department of state revenue that states the amount of the individual's retirement benefits that were received:
        (1) during the individual's taxable year; and
        (2) for the individual's service in an active or reserve component of the armed forces of the United States.

SOURCE: ; (07)IN0298.1.2. -->     SECTION 2. [EFFECTIVE JANUARY 1, 2008] IC 6-3-2-4, as amended by this act, applies only to taxable years beginning after December 31, 2007.