Indiana Home
Indiana Deductions (Scroll Down to see Credits)
• Rent
An individual who pays rent on his or her principal place of residence may deduct the actual amount, or the first $3,000 of rent paid during the taxable year, whichever is less
• Residential Property Tax
An individual who pays property taxes on his or her principal place of residence may deduct the first $2,500 paid during the taxable year
• State Tax Refund
A taxpayer who was required to include any state tax refunds as income on the federal income tax return may deduct this amount
• Interest on U.S. Government Obligations
A taxpayer who included any interest from U.S. government obligations (e.g. U.S. Savings Bonds, Treasury Bills, & Government Certificates) on the federal income tax return may deduct this amount
• Social Security & Railroad Retirement Benefits
Indiana does not tax social security and railroad retirement benefits. Therefore, any amounts attributable to social security and/or railroad retirement benefits that were included in a taxpayer's federal adjusted gross income may be subtracted
• Military Service & National Guard and Reserve Component
Indiana provides deductions for non-combat military income, military income received by members of the reserves, and National Guard, and military retirement or spousal survivor benefits. The Military Service deduction is equal to the first $5,000 ($10,000 for joint filers where both individuals qualify) of pay or retirement income. The National Guard and Reserve Component deduction is equal to the amount of income received as a result of service on involuntary orders during the period the members were deployed or mobilized for full-time service, or during the period the unit was federalized
• Non-Indiana Locality Earnings
A deduction from federal adjusted gross income is allowed for the amount of income taxed by a political subdivision of another state, up to a maximum of $2,000 ($4,000 for joint filers if both individuals qualify)
• Insulation and Solar Power Roof Vent or Fan
A deduction from adjusted gross income is available to a resident individual who has installed in his or her residence, during the taxable year, insulation, weather stripping, double-pane windows, storm doors, storm windows, or a solar powered roof vent or fan. The amount of the deduction is up to $1,000 of the cost for labor and materials
• Unemployment Compensation
An individual who received unemployment compensation during the taxable year is entitled to a deduction from adjusted gross income
• Airport Development & Enterprise Zone Employees
Employees who live and work in areas designated as enterprise zones or qualified airport development zones may be eligible to claim a deduction from their adjusted gross income for a portion of their income earned in the zone. The allowable deduction is the lesser of one-half of the adjusted gross income earned in an enterprise/airport development zone or $7,500
• Civil Service Annuity
An individual resident of Indiana who is at least 62 years old before the end of the taxable year and who receives a federal civil service annuity is allowed an adjusted gross income tax deduction equal to $2,000 of the annuity payments received during the taxable year
• Disability Retirement
Persons retired on disability who are permanently and totally disabled by the end of the taxable year are entitled to a deduction from their adjusted gross income of up to $5,200 ($10,400 for joint filers if both individuals qualify). Proof of disability signed by the taxpayer’s doctor must be attached to the return
• Indiana Lottery Winnings
An individual who receives prize money from an instant game, appearing on the Hoosier Millionaire show, or an on-line game (i.e. Hoosier Lotto, Powerball, Lucky 5, etc.) from the Indiana Hoosier Lottery Commission can subtract those winnings from adjusted gross income
• Indiana Partnership Long-Term Care Policy Premiums
Taxpayers may claim a deduction for premiums paid by an individual under an Indiana Partnership long-term care policy. The deduction may be claimed if the premiums are paid for the benefit of the taxpayer or the taxpayer's spouse, or both.
• Law Enforcement Reward
– An individual, who included this reward on his or her federal tax return, can subtract the first $1,000 of a reward received for providing information to law enforcement that lead to the arrest, indictment, or the filing of charges against a person
• Railroad Unemployment and Sickness Benefits
An individual can subtract from adjusted gross income the amount received as unemployment benefits or sick pay from the Railroad Retirement Board
• Recovery of Itemized Deductions
An individual who claimed an itemized deduction for an expense in a prior tax year that was later reimbursed for that expense in the current tax year must report this as income on his or her federal tax return as “other income.” Indiana allows an individual to subtract this “other income” on his or her state tax return
Indiana Credits
• Refundable Credits
Unified Tax Credit for the Elderly
A credit ranging from $40 to $140 for taxpayers who are age 65 or older, file a joint return if married, and have a federal adjusted gross income of less than $10,000. The person must not have been in prison for 180 day or more during the year. It can be claimed on the state tax return or separately if the person does not have to file a tax return
Earned Income Credit
A taxpayer is eligible for an Indiana earned income credit if they qualify for the federal earned income credit that is 9% of the federal amount claimed
Lake County Residential Income Tax Credit
An income tax credit is allowed for property taxes paid on homesteads by Lake County taxpayers whose earned income for the tax year is less than $18,600
• Nonrefundable Credits
Credit for Local Taxes Paid Outside of Indiana
An individual can claim a credit for local income taxes paid to localities (i.e. city, county, or other political subdivisions) outside of Indiana County
Credit for the Elderly or Permanently Disabled
A taxpayer is eligible for an Indiana elderly or disabled credit if they qualify for the federal credit where the credit amount depends on the county tax rate
College Credit
An individual who donates money or property to an Indiana college or university can take a credit of up to $100 ($200 for joint filers)
Credit for Taxes Paid to Other States
An individual who is or was a resident of Indiana but had income from another state and paid taxes on that income to that state is eligible to claim this credit. The amount of the credit depends on the state
Indiana’s CollegeChoice 529 Education Savings Plan
An individual who contributes to a Indiana CollegeChoice 529 account can claim a credit of up to $1,000
Individual Development Account
An individual who contributes to an Individual Development Account program can claim a credit that is equal to 50% of the contribution
|
