2015 Tax Filing Changes

Changes Effective Jan. 1, 2015:

  • Adoption Credit. Credit is the lesser of 10% of the federal adoption credit or $1,000 per qualifying child. Must use worksheet to figure credit.
  • Civil Service Annuity Deduction Increase. The deduction increases from $2,000 to $8,000 for the 2015 tax year, and further increases it to $16,000 for 2016 and beyond. Expands the deduction to include a surviving spouse.
  • Credit for Local Taxes Paid Outside Indiana. This credit may be used to offset the County Economic Development Income Tax.
  • Lake County Residential Income Tax Credit Calculation Change. The income limitation qualifier has changed from having earned income of less than $18,600 to having Indiana adjusted gross income of less than $18,600. Must use Indiana AGI Worksheet to figure IN AGI.
  • Public K-12 Education Fund Donation. Adds a tax refund check-off for funding public education for kindergarten through grade 12.
  • Public School Educator Expense Credit. An educator employed by an Indiana school corporation is entitled to a nonrefundable tax credit equal to the lesser of $100 or the total amount expended for certain classroom supplies during a tax year.
  • Repealed Credits:
    • Blended Biodiesel Credit. Carryforward of existing credit available.
    • Ethanol Production Credit. Carryforward of existing credit available.
    • New Employer Credit. Carryforward of existing credit available.
    • Riverboat Building Credit. Carryforward of existing credit available.
    • Prison Investment Credit. No carryforward provision.
    • Voluntary Remediation Credit. No carryforward provision.
  • Schedule IN-DONATE. Located at the bottom of IT-40 Schedule 5 (IT-40PNR Schedule F), this new schedule is to be used when making a donation to the Nongame Wildlife Fund and/or the new Public K-12 Education Fund.
  • Statute of limitations change. The statute of limitations for a refund claim of overpayment of withholding taxes has been extended from two to three years.
  • Tax rate reduction. The individual income tax rate has been reduced from .034 to .033 for 2015 and 2016.

Changes Effective Jan. 1, 2016:

  • Repealed Add-Backs
    • Discharge of debt of a principal residence
    • Lump sum distribution from federal Form 4972
    • Qualified disaster assistance property
    • Qualified refinery property
    • Qualified film or television production
    • Qualified preferred stock
    • Certain trade or business deductions based on employment of unauthorized alien.
  • Repealed Credits
    • County Credit for the Elderly
    • Historic Building Rehabilitation Credit. Carryforward of existing credit available.
  • Repealed Deductions
    • Insulation Deduction
    • Law Enforcement Reward Deduction
    • Lottery Winnings Deduction partially repealed. Repeals the deduction for the first $1,200 of winnings of each Indiana lottery winning event.
    • Medical Care Savings Account Deduction. Repeals the Indiana deduction for funds put in a medical care savings account by an employer for an employee that are not exempt from federal tax
    • Non-Indiana Locality Earnings Deduction 
    • Solar-powered Roof Vents or Fans Deduction
  • Miscellaneous
    • School Scholarship credit. Annual contribution ceiling increased from $8,500,000 to $9,500,000.

Same-sex Marriage Tax Filing Guidance
Same-sex marriages are legal in Indiana based on court rulings. Same-sex couples should file their state return using the same marital status as is used on their federal tax return.

Extension of Time to File
Effective Jan. 1, 2015, the state individual extension of time to file due date is extended from June 15 to Oct. 15 (plus 30 days, or until Nov. 14) of the tax year. Also, any penalty shall be based on the amount of tax not paid on or before the end of the extension period (Nov. 14).