How does Indiana process electronically-filed returns?

March 16, 2015

More than three million Hoosiers file individual income tax returns each year, and two-thirds of those taxpayers will receive a refund. But what happens from the time you file your return to the time you receive your refund?

If you choose to file your tax return electronically, you’re not alone. In fact, over 80 percent of Hoosier taxpayers file their individual income tax returns electronically, and nearly two million Hoosiers may qualify to file their federal and state tax returns for free with INfreefile.

Once you file a return using an electronic software vendor, the return is transmitted to the Modernized E-File (MEF) system. MEF is an IRS system that analyzes the return to ensure its validity. Once the electronic return is approved by MEF, it is sent to the Indiana Department of Revenue.

The department receives thousands of returns via MEF each day. Once the department receives the return, a third party vendor further examines it for fraud.

Unfortunately, fraud and identity theft are growing concerns, not just in Indiana, but all over the world. To combat this issue, many Hoosier taxpayers can expect to receive a letter from the department asking them to complete an Identity Confirmation Quiz. This quiz, administered online or over the phone, helps the department confirm your identity and keep your tax refund out of the hands of fraudsters. Click here to learn more about the Identity Protection Program.

After your return passes the identity confirmation and fraud checkpoints, it is entered into the Returns Processing System (RPS). Through a set of business rules, RPS further reviews the return for math errors and analyzes return information, such as requested credits and deductions. Sometimes, RPS determines that more information and documentation is required before a refund can be issued. In that case, a taxpayer receives a letter requesting the necessary additional documentation.

Once the return is reviewed and approved by RPS, a refund can be issued. When you file your tax return electronically, you can expect this process to take about two weeks. To further speed up this process, be sure to have your refund direct deposited into your bank account.

If you have questions about your tax return, contact the department at 317-232-2240 or email individualtaxassistance@dor.in.gov.