Inheritance Tax Refunds

To claim an inheritance tax refund with the Indiana Department of Revenue, taxpayers must do the following:

  1. File a Claim for Refund (Form IH-5) with the Indiana Department of Revenue, Inheritance Tax Division, 100 Senate Ave., Room N248, Mail Stop 101, Indianapolis, IN 46204-2253
  2. The department will issue an Order approving the refund, partially approving the refund, or denying the refund to the estate’s representative
  3. The department will issue vouchers to the estate’s representative to approve and return to department
  4. The state auditor will issue the refund check to the estate

Note that a Claim for a Refund must be filed with the Department of Revenue within the last of three years from the date the tax was paid or one year from the date the tax is finally determined.

Once the Inheritance Tax Section has issued an Order approving a claim for a refund, the refund check should be issued within 30 days (assumes vouchers are promptly returned by the estate’s representative).

If the Inheritance Tax Section denies the refund, the estate has 90 days from the date of the Order to file appeal with the probate court.

2013 Legislative Changes to Refund Statute

The 2013 legislature made the following changes to the inheritance tax refund statute:

  1. Requires the use of the Department’s Refund Form (Form IH-5)
    Under the new law, an individual or estate is required to file a refund claim on a Claim for Refund (Form IH-5) with the Indiana Department of Revenue. This new requirement applies to any claim for refund whether the individual died in 2013 or before.
  2. Defines “finally determined” in our statute. The inheritance is finally determined when:
    • An Indiana probate court issues an order determining tax (Form IH-9) under Ind. Code 6-4.1-5-10 for Indiana resident returns.
    • The Department of Revenue issues an order determining tax under Ind. Code 6-4.1-5-16 for non-resident returns.
  3. Clarifies as to when the department has to pay interest on a refund. The Department has to pay interest (6 percent) if an estate is entitled to a refund and the refund is not paid within 90 days after the later of the date of:
    • The refund claim is received by DOR or
    • The department receives the return and order (Form IH-9) for a resident decedent or receives the return (Form IH-12) for a non-resident decedent.