Exemptions and Deductions

General Exemption

This tax does not apply to the first $1,250 of income reported on each individual return or the first $2,500 of joint income reported on a jointly filed return.

Age 65 or Older with Limited Income

Any person 65 years of age or older having a total annual income below specific limits is completely exempt from the tax. Total annual income means income from any and all sources, including social security. All income should be included, regardless of whether it is taxable for federal purposes. The income also should not be adjusted for any losses.

Total annual income limits are as follows:

Age 100 or Older

For tax years beginning January 1, 2018 and after, individuals 100 years of age or older, or any person who files a joint return and either spouse is 100 years of age or older, are exempt from the tax.

Legal Blindness

Single Filers: A legally blind person is exempt from the Hall income tax. He or she does not need to file a tax return. Single filers should send the Department a written statement from their physician that certifies their blindness. The doctor's statement should only be submitted once. It is not an annual requirement.

Joint Filers: When taxable income is received by a blind person and a spouse who can see, only the taxable income of the sighted person should be reported in Schedule A. The income of the blind person is exempt, and it should be reported on Schedule B. If the taxable dividend/interest income is received jointly by a blind person and a sighted spouse, only one-half of the jointly received income is exempt from tax. The sighted person may only claim a deduction of $1,250. A physician's statement for the blind spouse must be submitted to the Department.

Quadriplegic

Single Filers: Only the interest/dividend income that is directly related to the circumstances that caused an individual to become quadriplegic is exempt. That income should be listed on Schedule B. A medical doctor must certify that a person is quadriplegic. When taxable income is received by a person who is quadriplegic but the taxable income did not come from circumstances that caused that person to become quadriplegic, that income is not exempt and should be reported on Schedule A.

Joint Filers: When taxable interest and dividend income is received jointly by a quadriplegic and a spouse who is not a quadriplegic, only one-half of the jointly received income will be exempt from the tax. If the quadriplegic person receives taxable interest and dividend income and files jointly with a spouse, a deduction of $2,500 may be claimed. If only the non-quadriplegic spouse receives taxable interest and dividend income, the non-exempt spouse may only claim a deduction of $1,250.