ARI | 1-27-25 AM: Indiana’s Planning to Phase Out Retirement Income Tax

Today’s Story

Indiana Governor Mike Braun has unveiled a budget proposal aiming to phase out the state's tax on retirement income over the next four years. Currently, retirees in Indiana pay a 3% state income tax, in addition to applicable county taxes, on their retirement earnings. 

The proposed plan seeks to alleviate this financial burden, potentially allowing retirees to allocate more funds toward essential expenses such as medication and food. Advocates for the proposal, like Ralanda Smallfelt of Seniors Helping Seniors, emphasize that the tax relief could significantly improve the quality of life for many retirees.

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Fun Fact

As of 2023, nine U.S. states do not tax retirement income, providing a more favorable tax environment for retirees.