A new Indiana law exempts from state income tax all the military pay of active-duty service members and members of reserve units, including the state's National Guard.

The full deduction is goes into effect next tax year.   For 2023, it is still $5K.  @S_Kelley 

For 2023 and earlier, Indiana adjusted gross income tax applies to members of the active component of the armed forces of the U.S. Indiana resident regular members of the armed forces are subject to tax on all income, regardless of source. 

For 2024 and later, Indiana resident regular members of an active component of the armed forces are exempt from income tax on their wages derived from their service in the armed forces. However, Indiana resident regular members of an active component of the armed forces are subject to tax on all other income, regardless of source.   Source

For years before 2022, military personnel on active duty or in the active reserves may deduct up to $5,000 of their military pay if it was not already excluded or deducted from their adjusted gross income.  

For 2023, this deduction is available only for members of the active components of the armed forces. Members of the reserve components and National Guard will claim a full deduction; see the “National Guard and Reserve Components Members Deduction” below.