How does the department process returns?

March 7, 2016

More than three million Hoosiers file individual income tax returns each year, and two-thirds of those taxpayers receive a refund.

Taxpayers have the option of paper or electronic filing. Electronic filing is recommended because it’s safer, more accurate and allows for faster refunds.

Electronic Returns

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

Once you electronically file a return, it 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, the identity information on the return is confirmed as part of the department’s Identity Protection Program.

After the identity information on your return is confirmed, the return is entered into the department’s Returns Processing System (RPS). The return is reviewed and analyzed. Sometimes, 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, a refund can be issued. When you file your tax return electronically, you can expect this process to take about ten to 14 days.

Paper Returns

For those who file paper returns, the processing time is longer but just as thorough.

Once the paper return is prepared, scanned, reviewed and approved, a refund can be issued. When you file a paper return, you can expect this process to take up to twelve weeks.

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