2012 Tax Filing Changes
County Tax
The current local county tax rate is printed on the back of Schedule CT-40, Schedule CT-40EZ, and Schedule CT-40PNR. Additionally, tax rates can be determined by:
- Going to the department’s website at www.in.gov/dor/4658.htm
- Calling the form order request line at (317) 615-2581 to have one mailed to you
- Visiting or calling a district office
Tax returns filed using the wrong rates will be adjusted. This may result in a reduced refund or an increase in the amount owed.
New OOS Municipal Obligation Interest Add-back
OOS municipal obligation interest add-back; 137 is the 3-digit code (must be a positive amount).
Any interest earned from a direct obligation of the State of Indiana or a political subdivision of the State of Indiana is not taxable for Indiana income tax purposes.
Interest earned from a direct obligation of a state or political subdivision other than Indiana is subject to the adjusted gross income tax if the obligation is acquired after Dec. 31, 2011. An obligation will be considered to be acquired on the trade date. Interest earned from obligations held or acquired prior to Dec. 31, 2011, is not subject to Indiana income tax.
Interest earned from obligations of Puerto Rico, Guam, Virgin Islands, American Samoa, or Northern Mariana is not included in federal gross income and is exempt under federal law. There is no add-back for interest earned on these obligations.
Example. Martha, an Indiana resident, owns bonds issued by the city of Washington, Indiana. The $247 interest income received from these bonds is exempt from tax by Indiana. She also owns bonds issued by the city of San Antonio, Texas. She received $421 interest from these bonds, which were purchased after Dec. 31, 2011. She will have to add back the $421 received from the OOS municipal bonds.
New Automatic Taxpayer Refund Credit
The Indiana General Assembly passed Governor Daniels’ proposed legislation providing an Automatic Taxpayer Refund credit for eligible Indiana taxpayers when the state budget surplus exceeds the amount needed to protect against a downturn in the economy.
Most taxpayers are eligible for the credit, but there are three qualifications that must be met. An eligible taxpayer must have a
- 2011 timely filed full-year resident return
- 2012 timely filed full-year resident return
- 2012 modified state tax liability*
*A modified state tax liability is the:
- State tax due (state taxable income X .034)
- Minus all credits except for
- withholding (state and county)
- estimated tax/extension payment
- Schedule 6/Schedule G lines 1 - 3
(local offset credits)
The remaining balance (the modified state tax liability) must be $1 or more.
The refundable credit that has been authorized for 2012 is $111 per eligible taxpayer ($222 for an eligible married couple filing a joint return).
Special Circumstances
- Cannot separate income if married filing jointly (MFJ)
- Example:
- Tom has $100,000 farm loss
- Jill has $60,000 wages
- Net taxable income = $0
- No tax liability = no credit
- Jill cannot claim the ATR credit based on her wage income.
- Example:
- IT-40PNR filers
- Examples:
- IN full-year resident marries part- or
full-year nonresident, files joint 1040 (MFJ) - IN servicemember marries nonresident,
files joint 1040 (MFJ)
- IN full-year resident marries part- or
- Only one can be eligible
- Maximum ATR credit on IT-40PNR is $111
- Examples:
- This credit may be claimed on Forms IT-40, IT-40EZ, and IT-40PNR. This credit is not available for SC-40 and IT-40RNR filers as there is no modified state tax liability on these forms.
Student Loan Interest Add-Back
The department has created a Student Loan Interest Add-Back Worksheet for IT-40 filers and a Modified Student Loan Interest Deduction Worksheet for IT-40 PNR filers. These worksheets are located within the IT-40 and IT-40PNR instruction booklets:
- Use the worksheet in the IT-40 booklet to figure the student loan interest deduction add-back, if necessary.
- Use the worksheet in the IT-40PNR booklet to figure the modified student loan interest deduction (if any) eligible to be claimed on Indiana’s Schedule A. Note: There is no corresponding add-back for IT-40PNR filers. Instead, any allowable deduction is figured using the worksheet.
Stay Connected
- Find Indiana tax forms.
- Know when I will receive my tax refund.
- File my taxes as an Indiana resident while I am in the military, but my spouse is not an Indiana resident.
- Take the renter's deduction.
- Pay my tax bill in installments.
- Claim a gambling loss on my Indiana return.
- Have more time to file my taxes and I think I will owe the Department.
