Indiana Nonresident Military Spouse Earned Income Deduction

Nonresident Military Spouse Earned Income Deduction
Form IN-2058SP
Schedule IN-2058SP
State Form 54259
(R14 / 9-23)

Nonresident Military Spouse
Earned Income Deduction

Enclose this schedule with the filing of Form IT-40PNR

	
Military servicemember’s spouse’s name	

Enclosure
Sequence No. 23

2023

Servicemember’s Spouse’s
Social Security Number

	Servicemember’s
Military servicemember’s name	
Social Security Number

Part 1: Figure your deduction
Round all entries

Military spouse’s earned income from Indiana sources

1.	Servicemember’s spouse’s wages as reported on Line 1B or 2B of Indiana’s Schedule A________ 	1	.00
2.	Business income from line 7B of Indiana’s Schedule A	_________

2a 	

.00

Servicemember’s spouse’s portion		 of line 2a__________________________________________ 	2b	.00
3.	Add lines 1 and 2b. This is the servicemember’s spouse’s earned income from Indiana
sources. Enter on Indiana’s Schedule C under line 11. Identify by using 3-digit code 625________	3	.00

Part 2: Additional information
1.	Enter 2-letter code for your state of domicile (e.g., IN for Indiana)
2.	Are you including the income from line 3 on your state of domicile’s tax return?	

Yes	

No	

N/A

If you answered No or N/A, explain ___________________________________________________________________________
	

________________________________________________________________________________________________________

Note: Pursuant to IC 6-8.1-7-1(b), information provided on this form may, upon request, be disclosed to the tax department in your state
of domicile. Any information disclosed will remain confidential and used solely for tax collection purposes.
You must enclose a copy of the servicemember’s military W-2 when claiming this deduction.

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Instructions for the Nonresident Military Spouse Earned Income Deduction
Based on provisions within the Military Spouse Residency Relief
Act of 2009 (Public Law No. 111-97), a spouse of a nonresident
military servicemember may not owe tax to Indiana on earned
income from Indiana sources.

Line 3 – Add lines 1 and 2 and enter the total here. This is your
deduction. Enter this amount on Indiana Schedule C: Deductions,
under line 11. Identify this deduction by using the 3-digit code
number 625.

The spouse may claim Indiana-source earned income* as a
deduction if the spouse has elected the same state of residence
as the military servicemember under federal law or:
•	 Indiana is not the military servicemember’s state of domicile
as reported on the servicemember’s Form DD-2058;
•	 The military servicemember and spouse are domiciliaries of
the same state;
•	 The military servicemember is in Indiana on military orders;

Important: If any of the conditions above change, you will no
longer be eligible for the deduction of Indiana-source earned
income. Only the income earned up to the time the condition
changed will be exempt.

•	

•	

Either:
ο	 The military servicemember’s spouse is in Indiana in
order to live with the servicemember, and resides at the
same address; or
ο	 The military servicemember and spouse live together
in a state other than Indiana, but the servicemember’s
spouse works in Indiana; and
The Indiana-source income is included on Indiana Schedule
A on line 1B, 2B and/or 7B.

*Earned income for purposes of this deduction includes:
•	 Wages, salaries, tips and other compensation from Indiana
sources, and/or
•	 Income from a sole proprietorship (reported on federal
Schedule C or C-EZ) from Indiana sources.
Important: You must enclose a copy of the military servicemember’s W-2 when claiming this deduction.

Part 1: Figure your deduction

Line 1 – Enter the amount of the military servicemember’s
spouse’s Indiana-source earned wages, salaries, tips and other
compensation reported on Schedule A, line 1B or line 2B. DO
NOT include any servicemember’s income reported on these
lines.

Example. Mary was assigned to a post overseas, and left Indiana
on October 1; Tom remained in Indiana. $24,000 of Tom’s $32,000
total wage income was earned before October 1. His deduction is
limited to $24,000.

Part 2: Additional Information

Line 1 – Enter the 2-letter code of the spouse’s state of domicile in
the box.
Example. Tom should enter KS for Kansas.
Line 2 – Tell us if you are including the Indiana-source earned
income on your state of domicile’s tax return.
Example. Tom and Mary are domiciliaries of Kansas. They filed a
tax return with Kansas, and included the Indiana-source income
on the tax return. Tom should check the Yes box.
Note: If you answered No or N/A to the question on line 2, include
an explanation.

Final thoughts

Remember, you must enclose a copy of the military servicemember’s W-2 when claiming this deduction. Otherwise, the deduction
will be denied.
Get Income Tax Information Bulletin #27 at www.in.gov/dor/files/
reference/ib27.pdf for additional information.

Example. Mary is a military servicemember. She is stationed
in Indiana, and her husband Tom resides with her in Indiana.
Her state of domicile on Form DD-2058 is Kansas. Tom’s state
of domicile is also Kansas. Tom meets the requirements to be
eligible to claim this deduction. He earned $32,000 wage income
while working in Indiana during the year, and included that income
on Schedule A, Line 1B. He should enter $32,000 on line 1.
Line 2 – Enter the amount of the military servicemember’s
spouse’s Indiana-source sole proprietorship income reported on
Schedule A, line 7B. DO NOT include any servicemember’s sole
proprietorship income included on line 7B.
Example. The same set of circumstances as the example above,
except Tom has $27,000 sole proprietorship income from Indiana
sources, and no wage income. He reported the $27,000 income
on Schedule A, line 7B. Mary did not have any sole proprietor
income. Tom should enter $27,000 on lines 2a and 2b.

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