Schedule IN-2058SP                    Indiana Department of Revenue                                                Enclosure 
 State Form 54259                                                                                                  Sequence No. 23
 (R15 / 9-24)                          Nonresident Military Spouse                            2024
                                       Earned Income Deduction
                                       Enclose this schedule with the filing of Form IT-40PNR.

                                                                                              Servicemember’s Spouse’s 
Military servicemember’s spouse’s name                                                        Social Security Number

                                                                                              Servicemember’s 
Military servicemember’s name                                                                 Social Security Number

Part 1: Figure Your Deduction

Military spouse’s earned income from Indiana sources                                                           Round all entries

1.  Servicemember’s spouse’s wages as reported on Line 1B or 2B of Indiana’s Schedule A _______             1                   .00

2.  a. Business income from line 7B of Indiana’s Schedule A ___ 2a                       .00 

b. 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    Line 2. Enter the amount of the military servicemember’s 
Act of 2009 (Public Law No. 111-97), a spouse of a nonresident     spouse’s Indiana-source sole proprietorship income reported on 
military servicemember may not owe tax to Indiana on earned        Schedule A, line 7B. DO NOT include any servicemember’s sole 
income from Indiana sources.                                       proprietorship income included on line 7B.

The spouse may claim Indiana-source earned income* as a            Example. The same set of circumstances as the example above, 
deduction if the spouse has elected the same state of residence    except Tom has $27,000 sole proprietorship income from Indiana 
as the military servicemember under federal law or:                sources, and no wage income. He reported the $27,000 income 
• Indiana is not the military servicemember’s state of domicile    on Schedule A, line 7B. Mary did not have any sole proprietor 
  as reported on the servicemember’s Form DD-2058;                 income. Tom should enter $27,000 on lines 2a and 2b.
• The military servicemember and spouse are domiciliaries of 
  the same state;                                                  Line 3. Add lines 1 and 2 and enter the total here. This is your 
• The military servicemember is in Indiana on military orders;     deduction. Enter this amount on Indiana Schedule C: Deductions, 
• Either:                                                          under line 11. Identify this deduction by using the 3-digit code 
  ο    The military servicemember’s spouse is in Indiana in        number 625.
       order to live with the servicemember, and resides at the 
       same address; or                                            Important. If any of the conditions above change, you will no 
  ο    The military servicemember and spouse live together         longer be eligible for the deduction of Indiana-source earned 
       in a state other than Indiana, but the servicemember’s      income. Only the income earned up to the time the condition 
       spouse works in Indiana; and                                changed will be exempt. 
• The Indiana-source income is included on Indiana Schedule 
  A on line 1B, 2B and/or 7B.                                      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 
*Earned income for purposes of this deduction includes:            total wage income was earned before October 1. His deduction is 
• Wages, salaries, tips and other compensation from Indiana        limited to $24,000.
  sources, and/or
• Income from a sole proprietorship (reported on federal           Part 2 – Additional Information
  Schedule C or C-EZ) from Indiana sources.                        Line 1. Enter the 2-letter code of the spouse’s state of domicile in 
                                                                   the box. 
Important. You must enclose a copy of the military 
servicemember’s W-2 when claiming this deduction.                  Example. Tom should enter KS for Kansas.

Part 1 – Figure Your Deduction                                     Line 2. Tell us if you are including the Indiana-source earned 
Line 1. Enter the amount of the military servicemember’s           income on your state of domicile’s tax return.
spouse’s Indiana-source earned wages, salaries, tips and other 
compensation reported on Schedule A, line 1B or line 2B. DO        Example. Tom and Mary are domiciliaries of Kansas. They filed a 
NOT include any servicemember’s income reported on these           tax return with Kansas, and included the Indiana-source income 
lines.                                                             on the tax return. Tom should check the Yes box.

Example. Mary is a military servicemember. She is stationed        Note. If you answered No or N/A to the question on line 2, include 
in Indiana, and her husband Tom resides with her in Indiana.       an explanation.
Her state of domicile on Form DD-2058 is Kansas. Tom’s state 
of domicile is also Kansas. Tom meets the requirements to be       Final Thoughts
eligible to claim this deduction. He earned $32,000 wage income    Remember, you must enclose a copy of the military 
while working in Indiana during the year, and included that income servicemember’s W-2 when claiming this deduction. Otherwise, 
on Schedule A, Line 1B. He should enter $32,000 on line 1.         the deduction will be denied.

                                                                   Get Income Tax Information Bulletin #27 at  
                                                                   https://www.in.gov/dor/files/ib27.pdf for additional information.

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