Individual Income Tax FAQs
General Income Tax Questions
April 15th following the end of the tax year. (ie: April 15, 2018 for 2017 taxes)
If April 15 falls on a weekend or holiday, the due date for filing your tax return is the next business day.
Fiscal-year tax returns are due by the 15th day of the fourth month after the close of the fiscal year. (ie: Fiscal year end date July 1, returns are due November 15). You must complete the Fiscal Year date at the top of the income tax form you're filing.
You must file an Indiana individual income tax return if:
- You lived in Indiana and had an income higher than your exemptions, or
- You lived outside Indiana and received income from Indiana.
Indiana has several different individual income tax returns.
- If you file a single federal income tax return, you must file a single Indiana individual income tax return.
- If you file a joint federal income tax return, you must file a joint Indiana individual income tax return.
You should file for a federal and/or state extension of time to file.
Please note, this form only allows you to file your tax return after the original due date, April 15. Any payment made when you file your tax return is subject to interest, and penalty may be due, too.
When there are changes to your income, exemptions or credits. This may result in a refund or tax due.
No. Indiana does not have a deduction for gambling losses.
If the amount of tax due is more than $100, the Department can establish a payment plan. The request can be made once your return is processed and you received a bill for the tax due.
The Department now offers INtax Pay. This online program allows eligible Hoosiers to pay and set up payments.
Intax Pay is available to anyone who owes individual income taxes, and businesses who conduct retail sales.
For more information, please contact us at (317) 232-2165.
Indiana's inheritance tax was repealed for individuals dying after Dec. 31, 2012.
To receive the worker's compensation exemption certificate you must meet several requirements.
You are most likely in a state collection for taxes.
Please allow a minimum of 3 weeks for electronically filed returns, and 12 weeks for paper filed returns.
College students may claim the renter’s deduction only if the residence is:
- Their principal place of residence; (the place where you have your true, fixed, permanent home and where you intend to return after being absent.)*
- The residence is subject to Indiana property tax.
Information Bulletin 38 contains more information.
No, this deduction is only available to the person who is living in the rented residence.
These deductions are based on paying rent or property tax on your principal residence. If you paid Indiana property tax on your home and also paid rent on your home (maybe you sold your house in May and rented the remainder of the year), you can take both deductions. The property tax deduction is up to $2,500 and the rental deduction is up to $3,000.
You can inquire about a tax bill by using the Department’s automated information line. You can find out your current balance due on any individual or business tax liability by calling (317) 233-4018.
You will need to have:
- Your tax identification number or Social Security number
- The liability number or warrant number
This information is located on the bill you received.
All Indiana taxpayers have certain rights and responsibilities that correspond to the Indiana tax laws.
- Quality customer service
- Taxpayer advocate to help customers in the preservation of their rights
- Taxpayer education and information
- A fair collection process
- Appointed hearing time and representation
- Demand notices
- Warrants for collection of tax
- Judgment liens against property
- Annual Public Hearing and Department Report
Your responsibilities are:
- To file your tax returns and pay any taxes due on time.
- To notify us in writing when you have an address change.
- To know the tax laws that relate to you as an individual or a business, and comply with those laws.
- To contact us if you have any questions or concerns.
Every customer has the right to a fair collection process.
You have the right to protest a liability. If you protest a liability, the Department is required to conduct a hearing on that case. You are entitled to be represented at your hearing when your case is presented. If a liability is not paid or protested within 60 days of the first notice, we will issue a "Demand Notice" for payment before issuing a tax warrant. If we do not receive a payment, a warrant for the collection of tax will be issued. When a tax warrant is filed with your county clerk, it becomes a judgment lien (levy) against all your property within the county. The department intends for you to have every opportunity to rectify your account balance whether it is paying it right away or protesting it.
Power of Attorney
Taxpayers wanting to authorize a representative to have Power of Attorney on their behalf for state tax matters needs to fill out a POA-1 form. Only when the Department has received the properly completed POA-1 form can a Department team member speak with the representative about specific tax types and periods indicated on the form.
Customers or their POA representatives can mail the POA-1 form to the following address:
Indiana Department of Revenue
P.O. Box 7230
Indianapolis, IN 46207-7230
Customers or their POA representatives can fax the POA-1 form to the following number: (317) 615-2605.
Yes, CPAs can submit the POA-1 form for their clients as long as the document is signed by the taxpayer.
Regardless of whom taxpayers designate as their POAs, the POA-1 form does not need to be notarized.
No, a POA-1 form must be on file. The Department will speak to a family member only if he or she has been declared a POA representative on the taxpayer’s POA-1 form. However, if a married couple filed a joint return, the Department can speak to either spouse without a POA-1 form.
The military family member can print the POA-1 form from the Department’s website. Then he or she can complete the POA-1 form, sign it, and submit it. He or she can submit it via mail or fax.
Taxpayers can designate anyone, including family members, CPAs or attorneys, to be their POA representative.
Yes, the POA representative may speak with any Department team member after the POA-1 form has been processed in the Department’s system. However, depending on how the form was received, there may be a delay before the POA-1 is visible statewide.
A company cannot be represented on the POA-1 form. By law, the Department can accept only an individual’s name as a POA representative. The Department will not accept a POA-1 form that does not have a designated POA representative from a company.
Yes, please check the box on page 2 to indicate that you want to grant authority for all periods and tax types.
There is no cost to the taxpayer or POA representative to file a POA-1 form.
If you are listed as an authorized personal representative on the tax return, a POA-1 is not required to discuss that specific return with you. However, if you have additional questions outside of the tax return itself, other tax years, or other submitted forms, the POA-1 will be required.
Your POA will expire after five years.
You will need to file using Form IT-40PNR. Indiana will tax all of your income, plus any income your spouse may have received from Indiana sources.
Since this question has a variety of different scenarios, it would be best to refer to page 6 of the Form IT-40PNR tax booklet. Then you would need to see what the guidelines are for the other state(s).
If you live or worked in Indiana on Jan. 1, you will need to figure county tax.
Generally, any type of business entity (individual, partnership, corporation, etc) that makes purchases of tangible personal property are subject to use tax unless you previously paid at least a seven percent sales tax on the purchase to the vendor. Use tax can be thought of as a mirror of the sales tax. Both our sales tax and use tax rates are seven percent.
Use tax is due on property brought into Indiana for use, storage or consumption, unless the Indiana Code (IC 6-2.5-5) contains an applicable exemption for your purchase. If you paid at least seven percent sales tax at the time of purchase you do not owe a use tax. However, if you did not pay at least a seven percent sales tax you may owe use tax.
- Catalog purchases by phone or mail from out-of-state vendors
- Internet purchases from out-of-state vendors
- Items withdrawn from your inventory for personal use or to give away
- Any purchase for which a statutory exemption is not available per the Indiana Code (IC 6-2.5-5)
- A dentist operates his/her business as a sole proprietorship. The dentist buys toothbrushes from an out-of-state supply house to give away to their patients during their annual exam. The vendor did not collect any sales tax on this sale. The dentist owes seven percent use tax on these purchases as there is not an existing statutory exemption for this type item given away. The dentist should report the use tax on form ST-115.
- An auto repair shop purchases shop rags and other cleaning materials from an-out-of-state vendor. The vendor did not collect sales tax on the invoice. The auto repair shop should report these purchases on their next sales tax return, form ST-103, as being subject to use tax and remit the seven percent use tax due.
- A manufacturer purchases new office furniture for their corporate office use from an out-of-state distributor. The distributor collects their state's six percent sales tax on the selling price. The manufacturer owes an additional 1 percent Indiana use tax on this purchase since the property is being used, stored or consumed within Indiana. The manufacturer should report this use tax liability on their ST-103 sales tax return.
- A law firm maintains an extensive legal library. Many of their legal books, manuals and publications are from out-of-state publishers who do not collect sales tax on items shipped into Indiana. The law firm owes seven percent Indiana use tax on these type of purchases and can remit these on their ST-103 return, if they are a registered retail merchant, or they can use the form ST-115.
- An individual orders magazines, clothing and novelty items from various out-of-state catalog companies. Sometimes the individual orders the items via mail, sometimes via the telephone and sometimes online over the Internet. This individual should report these purchases to Indiana as being subject to our use tax of seven percent. The individual can report these purchases on their Individual Income Tax Returns (IT-40 or IT-40EZ) or they may use a Form ST-115.
Items sold at garage sales are generally exempted under Indiana's casual sale statute. A casual sale exemption is applicable when the seller is not in the "business" of selling merchandise and the seller has already paid an original sales or use tax on the item. (Information Bulletin 20)
Items purchased at auctions are slightly more complex. Naturally, if the auctioneer collects the seven percent sales tax you will not owe any additional use tax. Also, if the auction takes place on the premises of the owner of the tangible personal property the items are considered to be "casual sales," and therefore, exempt from sales and/or use tax. However, if the merchandise to be sold is moved to a location not owned by the owner of the merchandise, the sales become subject to sales and/or use tax. All sales at auction "houses" are subject to the sales or use tax. (Information Bulletin 20)
The Indiana use tax rate is seven percent, same as our sales tax rate.
Depending on the tax rate of another state you may or may not owe use tax:
- If paid sales tax of seven percent or more to the other state you do not owe use tax to Indiana
- If paid sales tax of less than seven percent to the other state, your Indiana use tax will be the difference between the Indiana seven percent use tax and the amount you paid to the other state.
If you self-report the use tax due you will only owe the tax. If you wait until the Department of Revenue issues you a bill for the use tax due you will have to pay a ten percent penalty, plus interest. The Indiana Code requires use tax to be paid unless at least an equal amount of sales tax was paid on your taxable purchases. IC 6-2.5-3-2
The Form 1099G is a report of income you received from the Department during 2016. The Internal Revenue Service (IRS) requires government agencies to report certain payments made during the year, because these payments are considered taxable income for the recipients. The Department must report any refund, credit or offset of state and/or county income tax made during 2017 to individuals who claimed itemized deductions on their federal income tax returns for the year in Box 3. We must also include any interest paid on those refunds, credits or offsets.
The Form 1099G is a report of income you received from the Department during 2017. It is not a bill, and you should not send any type of payment in response to the statement. If a professional preparer handles your taxes, you should give this statement to the preparer, along with your other tax information, such as W-2s. If you prepare your own taxes, you should review the federal return instructions for reporting state tax refunds, or visit the IRS web site at www.irs.gov/ for more information.
The Department's records show that we issued you a refund or overpayment credit during 2016 for the taxable year shown in Box 3. You may be required to report the refund or credit as income on your 2016 federal income tax return.
You may have to report a state refund received in 2016 as income if you claimed itemized deductions on your 2015 federal income tax return.
In computing itemized deductions on your federal income tax return, you are allowed to deduct all of the state and county income taxes paid during the year. Most people deduct the amount of state and county income tax withheld, as shown on Form W-2, plus any Indiana estimated tax payments made during the year. Since this deduction reduces federal taxable income, if any part of the state and/or county tax deducted on the federal return is later refunded (as a result of filing your Indiana state income tax return), then that amount has to be reported as taxable income for the year in which the refund is issued.
Example: Sally Smith's 2015 W-2 showed $1,000 Indiana state withholding and $200 Indiana county withholding. She deducted the total $1,200 state and county withholding as an itemized deduction on her 2015 federal tax return. When she filed her 2015 Indiana state tax return, she got a $300 refund, which was issued June 1, 2016. This means that she only paid $900 in state and county taxes altogether for 2015, rather than the $1,200 she claimed. Therefore, Sally will be required to report the $300 difference on her 2016 federal tax return. (Note: Sally will also claim the $300 as a deduction on her Indiana tax return on Schedule 2, line 3. See the 2016 IT-40 instruction booklet for more information.)
You may need to report both amounts as income. If so, the interest would be included with the other interest income you report on your federal return. For information on federal reporting requirements, visit the IRS web site at www.irs.gov/.
Please contact us at (317) 232-2118, or write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207, to request a letter of correction. Be sure to include your Social Security number, and explain why you believe the Form 1099G is incorrect.
We usually mail out the Form 1099G statements around Jan. 1. If it's after the end of January and you still haven't gotten your statement, contact us at (317) 232-2118, or write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207, to request this information. Be sure to include your Social Security number with your request.
Yes. Please contact us at (317) 232-2118, or write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207. Give us both the incorrect Social Security number from the statement and your correct number. We'll issue a corrected statement to you.
I claimed a refund from Indiana for 2015, but the Indiana Department of Revenue applied the money to a tax bill I owed for another year or to another state agency. Does this mean the statement is wrong? Do I still have to report this as income?
Indiana law requires refunds to be applied to outstanding billings or to other agency offsets. The application of funds doesn't change the fact that you claimed an overpayment for the year on your tax return. Even though you didn't actually receive a check, an overpayment transaction took place, and you are subject to the same federal reporting requirements as if you had received a refund check.
A refund and a credit are simply different types of overpayment transactions. We must include any overpayment allowed on your 2015 tax return, whether issued as a refund or as a credit, on our Form 1099G. As a result, you are subject to the same federal reporting requirements as if you had received a refund check.
We are required to report refund transactions in the year they actually occur. Since your 2013 refund was issued in 2016, we cannot issue a Form 1099G as if the transaction took place in 2014. You should contact the Internal Revenue Service, or visit their website at www.irs.gov/, to find out whether you should amend your 2015 federal return, or take some other action to correct the reporting error.
This statement shows a refund of $800 for 2014. I did get a refund for that amount, but I amended my state return a few months later, and had to pay $500 back. Shouldn't the statement say my net refund was $300?
Under federal law, the department is required to report the actual refund or credit amount. We cannot net the amount against other transactions. Therefore, your Form 1099G is correct as issued. For information on how to report the income and deduct your payment on your 2016 federal return, visit the IRS website at www.irs.gov/.
Our records apparently show that a refund for 2012 was issued on your account during 2016, and that you claimed itemized deductions for 2012. Since the transaction took place in 2016, the income would be reported on your 2016 federal return. If you don't have a record of filing an amended Indiana tax return for 2012, or of resolving a claim or dispute related to your 2011 return during 2016, please contact us for an explanation at: Indianapolis main office, (317) 232-2240; write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207; or call or visit one of our District Offices located throughout the state.
The Form 1099G issued by the Department of Workforce Development is a report of unemployment compensation issued to you.
For information about this statement, contact the Department of Workforce Development at:
Indiana Department of Workforce Development
Benefit Administration Section
10 N Senate Avenue
Indianapolis, IN 46204-2277
You may access their website at www.in.gov/dwd, or call them toll free at 800-891-6499.
You have special filing considerations if Indiana is your military home of record. Read the following to see which set of circumstances fits you.
- If you are single, file Form IT-40.
- If you are married and:
- Filed a separate federal income tax return, file a separate Indiana return on Form IT-40;
- Filed a joint federal income tax return, and your spouse is also a full-year Indiana resident, file Form IT-40; or
- Filed a joint federal income tax return, and your spouse is either a part-year Indiana resident or a full-year Indiana nonresident, file Form IT-40PNR This form will help you to separate the income to be taxed by Indiana.
If your spouse maintains his/her Indiana residency during your enlistment, all of his/her income will be taxed by Indiana, regardless of where you are stationed.
If your spouse is a part-year or full-year Indiana nonresident, income received during his/her Indiana residency, as well as income from Indiana sources, will be taxed by Indiana.
More examples can be found on our Information for Military Service members website.
Maybe. Indiana military personnel have special county tax filing considerations.
There is a deduction available for certain members of the reserve components of the Army, Navy, Air Force, Coast Guard, Marine Corps or the Merchant Marine, or a member of the Indiana Army National Guard or the Indiana Air National Guard.
A deduction is available for the income received as a result of service on involuntary orders during the period the above members were deployed and mobilized for full-time service, or during the period the above member's Indiana National Guard unit was federalized.
If you meet the above-requirements, see instructions in the IT-40 Instruction booklet for details on how to figure your deduction.