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Automatic Taxpayer Refund

Indiana closed the 2021 fiscal year with $3.9 billion in reserves to create an excess reserve transfer of $1.1 billion to be split between retirement funding and an automatic income tax refund for Hoosier taxpayers. For more detailed information regarding how the Automatic Taxpayer Refund will be paid to taxpayers, visit the Indiana Department of Revenue.

How was the Automatic Taxpayer Refund triggered?

When state reserves exceed 12.5% of state budget general fund appropriations for the following year, according to IC 4-10-22-2, an excess reserve transfer is automatically generated. After performing this statutory calculation, the State of Indiana transferred $1.1 billion into it’s excess reserve account. Current Indiana law requires half, or $545 million, of the excess to be divided amongst Indiana taxpayers and to support teacher pensions.

How much will the Automatic Taxpayer Refund be?

Hoosier taxpayers will receive a one-time $125 taxpayer refund later this year. Keep in mind, the Automatic Taxpayer Refund is separate from any Indiana Individual Income Tax refund you may receive. There is nothing you need to do to receive this refund.

Am I eligible to receive the refund?

You will receive an Automatic Taxpayer Refund if you filed an Indiana resident tax return for the 2020 tax year with postmark date of Jan. 3, 2022, or earlier. An Indiana resident tax return means you filed your state taxes using one of the following:

  • Form IT-40, Indiana Full-Year Resident Individual Income Tax Return.
  • Form IT-40PNR, Indiana Part-Year or Full-Year Nonresident Individual Income Tax Return, if you were married and filed jointly AND you were an Indiana resident for the entire year (2020).
  • Form SC-40, Unified Tax Credit for the Elderly AND you resided in Indiana for more than six months in 2020.

How will I receive my Automatic Taxpayer Refund?

How you receive your Automatic Taxpayer Refund depends on information contained in your 2021 Indiana Individual Income Tax return. Your Automatic Taxpayer Refund is separate from other payments or refunds you may receive from the state.

You should receive your Automatic Taxpayer Refund by direct deposit if:

  • You filed an Indiana resident tax return for 2020 before Jan. 3, 2022; and
  • You filed a 2021 Indiana resident tax return by April 18, 2022; and
  • You listed direct deposit checking or savings account information for your 2021 Indiana Income Tax refund.

One-time direct deposits of $125 will arrive in bank accounts beginning in May and continue through mid-summer. The direct deposit memo will read “Taxpayer Refund (ATR)”. Whenever possible, one refund of $250 will be issued by direct deposit or check for married couples filing jointly when both spouses are eligible for the Automatic Taxpayer Refund.