Indiana allows you to claim the Disability Retirement Deduction if you meet all the following:
- You were permanently and totally disabled at the time you retired
- Retired on disability before the end of the tax year, AND
- Received disability retirement income during the tax year.
This deduction is limited to a maximum of $5,200 per qualifying individual. Social Security benefits do not qualify for this deduction as Indiana does not tax it at all.
To make this manual entry, go to:
- State Section
- Edit (three dots) Indiana state return
- Subtractions from Income
- Disability Retirement Deduction