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Indiana lawmaker, governor want to stop taxing military retirement benefits

INDIANAPOLIS (WISH) – Veterans groups say Indiana is losing retired military members at an alarming rate, and some veterans won’t even consider retiring in Indiana.

They blame the fact that Indiana taxes military retirement benefits. A state lawmaker wants to stop the practice.

Ron Martin, chairman of The Military/Veterans Coalition of Indiana, has been out of the military for 21 years. The 68-year-old said Thursday, “I spent 25 years in the United States Army. I was an ROTC graduate back during the Vietnam War.”

He and his family love Indiana so much that they decided to retire here, but he said Indiana taxes his military retirement benefits.

“That we are going to tax them and other states won’t,” Martin said. “Thirty-eight states in our union do not tax military income. When you look at that from a veteran’s standpoint, why aren’t I living in these other states? That’s what hurts. We’ve sacrificed a lot.”

Martin said that’s why roughly 3,500 military veterans who are 40 or younger leave Indiana for another state every year.

“We’ve got many of our young veterans, it does hurt them a great deal. Those are the one’s I’m concerned about, to try to keep them here.”

State Rep. Karlee Macer said she plans on introducing a bill that would stop veterans benefits from being taxed. The Indianapolis Democrat said, “I think in the long run not only is it the right thing to do for our veterans, but if we’re very serious about gaining and adding to our workforce, these are the simple cut-and-dry things we can do on the most basic level to lure people to our state.”

Martin said he believes 2019 will be the year this law change happens and will keep pushing. “We need to do more for these young men and women who put their name, their life on the line for this country. We owe them a little bit.”

“It’s about time we step up to the plate and do that.”

A representative of Gov. Eric Holcomb’s office said Thursday he is fighting for a military pension state income tax exemption, too. It’s part of his 2019 legislative agenda

The legislature will convene Jan. 3. 

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Indiana Veterans Benefits