Auditor of State Announces Budget Surplus, Refundable Tax Credit

Under Indiana’s “Use of Excess Reserves” law (IC 4-10-22), the state must use excess budget reserves in specific ways, including refundable tax credits to Hoosier taxpayers. On July 14, Auditor of State Tera Klutz announced a $3.9 billion state budget surplus and that Indiana would divide $1.1 billion of that surplus equally between the state’s teachers’ retirement fund and a refundable tax credit for Hoosier taxpayers.

There is no immediate impact to Hoosier taxpayers. DOR is not issuing additional tax refund checks or automated deposits as a result of this announcement.

Currently, DOR is reviewing eligibility requirements and other details as defined by law. DOR will coordinate with the Office of Management and Budget (OMB), Auditor of State and the State Budget Agency (SBA) to announce additional information in late fall and will widely communicate the process for claiming this tax credit, along with amounts and eligibility requirements.

School Scholarship Tax Credit Update

A School Scholarship Tax Credit is available for individuals or corporations who donate to scholarship-granting organizations (SGOs).

The tax credit program can award up to $17.5 million in credits for fiscal year July 1, 2021 - June 30, 2022.

Visit the Scholarship page for information and to subscribe to email updates for the School Scholarship Tax Credit.

Notification to Gasoline Distributors

Effective July 1, 2021, the gasoline use tax rate in Indiana for the period from July 1, 2021, to July 31, 2021, is $0.168 per gallon.

See Departmental Notice #2 for more information

Foster Care Donation Tax Credit

During the 2021 legislative session the Indiana General Assembly adopted the Foster Care Donation Tax Credit. As a result, Indiana taxpayers will be able to claim the credit on their 2022 tax return for approved donations made after December 31, 2021.

Interested in Applying for the Foster Care Donation Tax Credit?

An application is required to be completed and submitted to the Indiana Department of Revenue (DOR). Prior to December 31, 2021, DOR will post the application online.  After you receive approval of your application from DOR, proof of donation must be provided to DOR within 30 days of approval.

Find out more

Increase in Gasoline License Tax and Special Fuel License Tax

P.L. 218-2017 requires the department to publish the new rates effective July 1, 2021, for the gasoline license tax (IC 6-6-1.1-201) and special fuel license tax (IC 6-6-2.5-28) on the department’s Internet website no later than June 1, 2021. For the period July 1, 2021, to June 30, 2022, the following rates shall be in effect:

• Gasoline license tax: $0.32/gallon
• Special fuel license tax: $0.53/gallon

See Departmental Notice # 43 for more information