Individuals
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Indiana Credits
There are many credits available to claim on your Indiana income tax return.
Information Bulletin #59 lists all the credits available to Indiana taxpayers. Also, the IT-40 instruction booklet (IT-40PNR instruction booklet) has more detailed information about the credits available to be claimed on the income tax return.
Below is a list and a brief discussion of the more commonly claimed credits.
- College credit
- Credit for taxes paid to other states
- Indiana state and county tax withholding credits
- Indiana's earned income credit
- Unified tax credit for the elderly
College Credit
If you donated money or property to an Indiana college or university, you may be able to take a credit.
- For an individual filing a single return, the credit is the lesser of ½ of the amount contributed or $100.
- For individuals filing a joint return, the credit is the lesser of ½ of the amount contributed or $200.
Note: Tuition paid to a college or university is not a contribution, and does not qualify for this credit.
Get Schedule CC-40 for complete details.
Credit for Taxes Paid to Other States
Indiana residents must report all income that is reported for federal income tax purposes on their Indiana individual income tax return. This includes income from sources outside Indiana. Likewise, nonresidents who receive income from Indiana generally will owe tax to Indiana on the part of their income that is from or connected with Indiana sources.
When this happens, individuals may be subject to individual income tax by both their state of residence and the state where the income comes from. Indiana has entered into agreements with several states to eliminate the requirement of paying tax to two states on the same income. Tax treatment of out-of-state income depends upon the types of income and the state from which the income is derived.
Note: Indiana only allows credits for individual income tax paid to other states or localities. Other taxes such as property taxes, corporate income taxes, and unincorporated business taxes are not allowed as a basis for claiming such credits.
See Information Bulletin #28 and the IT-40 instruction booklet (IT-40PNR instruction booklet) for details on how to figure and claim this credit.
Indiana State and County Tax Withholding Credits
Claim the Indiana state and Indiana county tax withholding amounts as credits when you file your Indiana income tax return (Forms IT-40, IT-40PNR, IT-40EZ, IT-40RNR or IT-40X).
Indiana withholding amounts may be found on any of the following forms:
- W-2 Wage and Tax Statement
- W-2G Certain Gambling Winnings
- 1099-R Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, etc.
- 1099-MISC Miscellaneous Income
- WH-18 Miscellaneous Withholding Tax Statement for Nonresidents (Indiana form)
- WH-4852 Indiana Substitute for Form W-2 or Form 1099-R (Indiana form)
Do not claim other state's or nonIndiana locality withholding amounts on your Indiana income tax return. You'll need to contact those states/localities for instructions on how to claim those credits.
Indiana's Earned Income Credit
The Indiana earned income credit is 6% of the earned income credit you claimed on your federal income tax return.
Get Schedule IN-EIC for details on how to figure and claim your credit.
Unified Tax Credit for the Elderly
You may be able to claim the unified tax credit for the elderly if you or your spouse meet all the following requirements:
- You and/or your spouse must have been age 65 or older by the end of the tax year;
- You must file a joint return if you were married and living together at any time during the year;
- Your federal adjusted gross income must be less than $10,000;
- You must have been a resident of Indiana for six months or more during the tax year; and
- You must not have been in prison for 180 days or more during the tax year.
The credit ranges from $40 up to $140, depending on your age, marital status and income, and must be claimed no later than June 30 following the close of the tax year.
Check out Section VI: Credits Available to the Elderly in Information Bulletin #26 for more information.
