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Individual Income Tax Overview

General Tax Information

Who files a tax return - An Indiana individual income tax return may need to be filed if you lived in Indiana and received income greater than your exemptions or you lived outside Indiana and received income from Indiana.

Residency status - The type of return filed often depends on your residency status.

Choosing the correct tax form to file - There are several forms available; be sure to choose the correct form.

When to file your tax return - The due date for filing your individual income tax return is April 15 following the close of the tax year. If April 15 falls on a weekend or holiday, the due date for filing your tax return is the next business day.

Tax credits - There are many credits available.

Tax deductions - Indiana deductions are used to reduce the amount of income Indiana will tax. If eligible to claim these deductions, you can claim them when you file your annual Indiana income tax return - Form IT-40 or Form IT-40PNR.

Filing requirements for deceased individuals - Find out the filing requirements for individuals who die during the tax year, how a return is signed if the individual is deceased and how to cash a refund check.

Tax Deduction VS. Tax Credit?

A tax credit and a tax deduction both work to reduce the total amount of tax you pay.

Deductions reduce the amount of your income that is taxable. For example, the renter’s deduction in Indiana reduces the taxable income of a person who pays rent for his home by a maximum of $3,000. The renter would subtract the amount he paid for rent, or $3,000 (whichever is less) from his income. For more information on the renter’s deduction, read Information Bulletin 38.

Once you have determined the taxable income you received for the year, you may be able to apply tax credits. Tax credits reduce the amount of the tax you must pay. For example, if you made a charitable contribution to an Indiana college or university (tuition is not a charitable contribution), you can subtract one-half of the contribution, or $100 (whichever is less) from the amount of the Indiana adjusted gross income tax that you owe for the year. For more information on the Indiana College Credit, visit Schedule CC-40.

Residency status

There are several types of Indiana income tax returns available for individuals to file. The type you need to file is generally based on your residency status. You can determine your residency status by definitions listed on this page.

NOTE: If you and your spouse file a joint federal income tax return, you must file a joint tax return for Indiana. If you and your spouse file separate federal income tax returns, you must file separate tax returns for Indiana.

Full-Year Residents

You are a full-year Indiana resident if you maintain your legal residence in Indiana from Jan. 1 through Dec. 31. You do not have to be physically present in Indiana the entire year to be considered a full-year resident. Residents, including military personnel, who leave Indiana for a temporary stay are considered residents during their absence. For example, visiting your out-of-state relatives for a couple of weeks each year won't impact your Indiana residency status; you're still a full-year resident.

Full-year residents must file Form IT-40, Indiana Full-Year Resident Individual Income Tax Return.

If you are retired and spend the winter months in another state you may still be a full-year Indiana resident if:

  • You maintain your legal residence in Indiana and intend to return to Indiana during part of the taxable year;
  • You keep your Indiana driver's license; and/or
  • You keep your Indiana voting rights.

For example, Tom and Jane stay at their Florida condominium from Nov. 1 through March 1 each winter, and return to their Indiana home the rest of the year. Since they didn't take steps to become Florida residents (such as registering to vote in Florida, getting a Florida driver's license, etc.), they are full-year Indiana residents for income tax purposes.

Check out the IT-40 instruction booklet for more information.

Part-Year Residents and Full-Year Nonresidents

If you were a part-year resident and received income while you lived in Indiana, you must file Indiana Form IT-40PNR, Part-Year Resident or Nonresident Individual Income Tax Return.

If you were a legal resident of another state (exception: see Full-Year Residents of Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin below) and had income from Indiana (except certain interest, dividends, or pension income), you must file Form IT-40PNR.

Check out the IT-40PNR instruction booklet for more information.

Full-Year Residents of Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin

If you were a full-year resident of Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin, and your only income from Indiana was from wages, salaries, tips or commissions then you need to file Form IT-40RNR, Indiana Reciprocal Nonresident Individual Income Tax Return. Note: If you had any other type of income from Indiana, such as farm income, rental income, sole proprietor income, etc., you can't file Form IT-40RNR - you'll have to file the Form IT-40PNR.

Tax Terms Defined

Adjusted Gross Income (AGI) – The amount of income to be taxed.

Deduction – Lowers the amount of income to be taxed. Few students qualify for deductions. See individual deductions.

Dependent – In general, you are a dependent of your parent(s) or guardian(s) if they:

  • Financially supported you for more than six months and;
  • You are under the age of 19 at the end of the tax year or;
  • You are under the age of 24 at the end of the tax year and are a full-time student.

Filing due date – Your Indiana individual income taxes must be filed by April 15.

Filing status – The state of Indiana recognizes three filing statuses:

  • Full-year resident – You maintained a legal place of residence in Indiana from Jan. 1 through Dec. 31. You do not have to be physically present in Indiana the entire year to be considered a full-year resident.
    Example: Brittany is a student at Illinois State University. During the school year Brittany lives in Illinois. When school is out she lives with her parents in Fort Wayne, Ind. Brittany is a full-year Indiana resident.
    Use Form IT-40.
  • Part-year resident – You established Indiana residency during the year.
    Example: During the year Logan moved to Indiana from Minnesota. He registered his car in Indiana, got an Indiana driver’s license and registered to vote in Indiana. Therefore, Logan is a part-year Indiana resident.
    Use Form IT-40 PNR.
  • Full-year nonresident – You are a full-year resident of a state (or country) other than Indiana.
    Example: Sean, who is from Missouri, attends college in Indiana (and pays nonresident tuition). Sean is a full-year nonresident, even though he lives in Indiana for nine months of the year.
    Use Forms IT-40 PNR or IT-40 RNR.

Refund – A return of overpaid taxes.

Residency – Your legal place of residence from Jan. 1 through Dec. 31. See filing status to determine the form you need to use when filing your state income tax return.

W-2 – A form supplied by employer(s) no later than Jan. 31 stating the wages earned and taxes paid.

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