If you lived in Indiana anytime during the tax year or you have income from Indiana-based sources, you will probably need to file a state income tax return for Indiana. An Indiana state income tax return is separate from a federal income tax return as required by the Internal Revenue Service (IRS).
Following are answers to frequently asked questions about Indiana state income tax as defined by the Indiana Department of Revenue.
Who has to file an Indiana state income tax return?
Individuals must file an Indiana state income tax return if either of the following are true:
- You lived in Indiana for any part of the tax year and received income from any source that is greater than your exemptions
- You lived outside Indiana and received income from Indiana-based sources
Your exemptions for Indiana state income tax purposes are the total of the following:
- $1,000 for each exemption you can claim on your federal income tax return
- $1,000 for each individual who is 65 years old or older
- $1,000 for each individual who is legally blind
In calculating your exemptions, if you do not have to file a federal income tax return, you should still use the forms for a federal income tax return to determine your number of exemptions.
If your taxable income is greater than your total exemptions, then you must file an Indiana state income tax return. If your taxable income is less than your total exemptions, then you do not have to file an Indiana state income tax return but you may want to do so if you have tax withholdings that you want to have refunded.
What is the tax rate for Indiana state income tax?
The tax rate for Indiana state income tax varies depending on whether you were a resident or non-resident of Indiana and where you lived within Indiana, as each county is able to set a portion of the tax rate.
What credits and deductions are available to help reduce the amount of Indiana state income tax I owe?
Indiana allows for various credits and deductions for state income tax purposes.
- College credit, for money or property donated to a university, up to the lesser of half the value of the contribution or $100
- Credit for individual income taxes paid to other states
- Credit for amounts withheld by the state of Indiana or any county within Indiana
- Earned income credit for those who received this credit on their federal income tax return
- Unified tax credit for the elderly, for those 65 years old or older who qualify
- Civil service annuity deduction for those receiving a civil service pension
- Disability retirement deduction for those permanently disabled and receiving disability
- Deduction for living or working in an enterprise zone or an airport development zone
- Human services deduction for those receiving Medicaid and living in a care facility outside of their home
- Deduction related to Indiana’s Long Term Care Insurance Program
- Deduction for certain insulation-related home energy improvements
- Deduction for interest received from any United States Savings Bonds, Treasury Bills, and Government Certificates
- Deduction of a portion of any reward received from law enforcement
- Deduction of a portion of certain winnings from the Hoosier Lottery Commission
- Deduction related to certain military pay
- Recovery of itemized deductions
- Deduction on a portion of rent paid
- Deduction for residential property tax paid
- Deduction for Social Security and railroad retirement benefits
- Deduction for a portion of unemployment compensation
When do I need to file my Indiana state income tax? Can I file an extension if I need more time to file?
Indiana state income tax returns are due by April 15 of every tax year. If April 15 falls on a weekend or a holiday, then tax returns must be filed by the first non-holiday business day after April 15.
If you need additional time to file your state income tax return, you can request an automatic six-month extension of the filing date. However, even if you receive an extension, if you owe tax, you must still pay that tax owed (or an estimate of the tax owed) by the original filing date. Otherwise, you will be subject to interest and penalties on the unpaid tax liability.
How can I get help in preparing my Indiana state income tax return?
You can hire a tax attorney who is familiar with Indiana state income tax law and can help you prepare and file your tax return.
- Virginia State Income Tax Overview (taxlawhome.com)
Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.