Spouses are liable for the information on tax returns filed jointly and any taxes owed. In limited cases, a spouse may have no or only partial responsibility and can request their part of any tax refund due is not used to pay the other spouse’s Indiana tax liability or toward other liabilities where the tax refund may be diverted or offset.
Making a claim as an injured spouse does not guarantee DOR will not divert part of your tax refund. DOR will investigate the matter and allocate any tax refund due accordingly.
What is an Offset?
In some cases, a tax return may be used to pay for a past-due Indiana tax liability. Typically, non-responsible spouse cases are specific to DOR liabilities. In addition, other government agencies or organizations may request DOR to divert, or offset, a tax refund to pay for outstanding debt. Injured spouse cases mainly center around debt owed to other government agencies.
Common offsets include, but are not limited to:
- DOR, for unpaid Indiana taxes
- Unpaid child support
- Repayment of Department of Workforce Development benefits
- Repayment of benefits obtained through the Family Social Services Administration
- Unpaid tuition and other expenses at Indiana post-secondary educational institutions (colleges, universities)
Are You an Injured Spouse?
You may be an Injured Spouse if:
- Your share of the overpayment shown on your joint return (tax refund) is expected to be applied (offset) against your spouse’s past-due taxes, or other liabilities;
- You are a spouse who claims to not be liable for all or part of a tax liability because:
- You have a tax liability reported on a joint return for which you are not responsible or were unaware of the tax return;
- One spouse intentionally underreported income or erroneously claimed deductions or credits on the return without the other spouse’s knowledge;
- You have a tax liability reported on a joint return, but you are responsible only for a portion of the liability; or
- You have received an assessment from DOR and you are not liable for all or part of the assessment because the assessment arises from the tax attributable to your spouse.
What You Need to Do
Taxpayers who believe they are eligible for injured spouse relief can request that DOR not apply the full amount of a tax refund to their spouse’s existing tax liability or a pending offset when married filing jointly by checking the applicable box on Line 5, Schedule 7. If you are filing electronically, your tax software will ask a question about applying the refund to a spouse’s liability.
Note: It is important to read the instruction book for your specific tax form or additional information provided by your tax software vendor so that you understand how to answer the question.
If you request injured spouse relief by checking the applicable box on Line 5 Schedule 7, DOR will stop processing your return and send you information on next steps. The tax return and any refund due will be held until the claim is processed to allow DOR to allocate refunds accordingly.
Information on any pending offsets will come from the requesting agency or organization. The injured spouse must contact the requesting agency or organization directly to let them know they are requesting injured spouse relief. DOR will honor the requesting agency’s decision in processing your tax return and any refund due. To finalize the process, DOR will mail Schedule IN-40SA to the taxpayer to complete and return to DOR.
I already filed a tax return or received my tax refund, can I still claim injured spouse?
Yes, you can file form Schedule IN-40PA, which requires you to provide the following information:
- Your federal income tax return, Form 1040 or 1040-SR, for the applicable tax year(s);
- All W-2 Forms, 1099 Forms and any other income statements or forms showing the amount of state and county income tax withheld for both spouses;
- A detailed letter explaining the sources of your and your spouse’s income, deductions, credits and any additional information relevant to computing your and your spouse’s individual tax liabilities; and
- A copy of the Indiana income tax return and all schedules for the applicable year(s).
Complete the form and mail or fax to:
Indiana Department of Revenue
Returns Processing and Operations/Injured Spouse
P.O. Box 7207
Indianapolis, IN 46207
Remember that submitting a claim as an injured spouse does not guarantee that DOR will restore part of your tax refund. DOR will investigate the matter and reallocate any tax refund due accordingly.