According to Information Bulletin #27, "The spouse of an armed forces member is exempt from Indiana income taxation on Indiana source earned income when:
- The spouse currently is domiciled in a state other than Indiana;
- The spouse resides in Indiana solely in order to live with the armed forces member;
- The armed forces member is present in Indiana in compliance with military orders; and
- The spouse and the armed forces member both are able to claim the same domicile."
To claim tax-exempt from Indiana withholdings:
Form WH-4MIL can be filed if you qualify to exempt your military spouse income from your Indiana return. Your state earnings are still taxable on your state resident return.
To claim a refund of taxes withheld from your Indiana income, follow these steps in the program:
- State Section
- Nonresident Indiana Return
- County Information, Select Out of State for both the taxpayer and Spouse for State where you lived and where you worked.
- Click Continue
- Subtractions From Income
- Other Deductions
- Select Nonresident Military Spouse from the drop-down menu. Enter the amount of wages on the W-2 for Indiana Box 16.
Form IN-2085SP and copies of the servicemember's W-2 must accompany the return to claim the refund. These are not included in the printed return and must be completed manually.
Military Spouse income may be taxable on your state return where you file as a resident.