August 16, 2022
Several tax relief proposals under consideration during the 2022 General Assembly Special Session were not enacted into law. These include provisions in Senate Bill #3, such as a six-month sales tax holiday on residential utility and telecom bills and a reduction in the gasoline excise tax rate and special fuel excise tax rate.
The following measures were among those included in Senate Enrolled Act #2, which was signed into law by Governor Holcomb.
- The additional Automatic Taxpayer Refund (ATR) passed and was set at $200 per eligible taxpayer.
- There is no affidavit to claim the $200 Automatic Taxpayer Refund.
- Some taxpayers who were not eligible for the initial $125 Automatic Taxpayer Refund will qualify for the $200 Automatic Taxpayer Refund.
- To qualify for the $200 Automatic Taxpayer Refund, the taxpayer:
- must have received Social Security benefits in calendar year 2022, and
- must not be claimed as a dependent on a 2022 Indiana income tax return.
These taxpayers must file a 2022 Indiana resident tax return to claim the $200 Automatic Taxpayer Refund before January 1, 2024. Instead of a direct payment, they will receive a $200 tax credit toward any additional taxes owed or refund due.
Note: Tax returns for 2022 will not be accepted until mid-to late-January 2023. Additional information will be available early next year.
Qualifying Hoosiers who are waiting on a paper check for their first ATR will receive a single, combined check in the coming months for both amounts - $125 and $200 - totaling $325 (or $650 for joint filers). By sending one check, AOS is able to save the state roughly $1 million in printing and postage costs. AOS began printing checks this week and is expecting to be complete by early October.
- The sales tax exemption for children’s diapers becomes effective on September 1, 2022.
- The gasoline use tax rate is capped at $0.295 per gallon through June 30, 2023. If the gasoline use tax rate is less than $0.295 per gallon, the lesser tax rate applies.
In addition, the Use of Excess Reserves law was updated. For calendar year 2023 only, if the amount of excess reserves meets the threshold as defined in Indiana’s “Excess Use of Reserves” law (IC 4-10-22), the first $1 billion of excess reserves goes to the pension stabilization fund before DOR issues the remaining excess reserves as a refund to Hoosier taxpayers.
DOR is working on updating relevant Tax Library documents to reflect these changes. To keep up with DOR news, subscribe to Information Bulletins & Departmental Notices and Tax Library Updates through GovDelivery.
For more information on enrolled legislation affecting other state agencies, visit the Indiana General Assembly’s website to read the 2022 Digest of Enactments.