Indiana Tax Form IT-40 - Full-Year Resident Individual Income Tax Return Instructions

General Instructions

Which Indiana Tax Form Should I File?

Indiana has four different individual income tax returns. Read the following to find the right one for you.

Indiana Full-Year Residents

 Use Form IT-40EZ: If you (and your spouse, if filing jointly) were a full-year Indiana resident and all of the following are true:

  • You filed a federal Form 1040EZ,
  • You are claiming only the renter’s deduction and/or unemployment compensation deduction, and
  • You have only Indiana state and county tax withholding credits and/ or an Indiana earned income credit.

Use Form IT-40: If you (and your spouse, if filing jointly) were a full-year Indiana resident and you do not qualify to file Form IT-40EZ.

All Other Individuals

Use Form IT-40RNR: If you (and your spouse, if filing jointly) were:

  • A full-year resident of Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin, and
  • Your only type of income from Indiana was from wage, tip, salary or other compensation.

*If you have any other kind of Indiana-source income, you are required to file Form IT-40PNR (see below).

Use Form IT-40PNR: If you (and/or your spouse, if filing jointly) were an Indiana resident for less than a full year (or not at all) and you do not qualify to file Form IT-40RNR.

Note: If you have income that is being taxed by both Indiana and another state, you may have to file a tax return with the other state. A listing of other states’ tax forms can be found at www.taxadmin.org/fta/link/forms.html

Military Personnel

See the instructions on page 7 to determine which form to file. Military personnel stationed in a combat zone should see the instructions on page 8 for extensions of time to file procedures.

2008 Changes

Important county tax rate information This year Indiana counties were allowed to adopt or increase their local income tax rates through Dec. 31, 2008. This publication was printed before that date. This means your county tax rate on page 40 may not be correct. We encourage you to contact us in one of the following ways to get an updated list of the rates before filing. To get the updated list you may

  • Log on to the Department’s Web site at www.in.gov/dor/3980.htm
  • Call the form order request line at (317) 615-2581 to have one mailed to you.
  • Visit or call a district office. See page 39 for these locations.
  • Call our main tax line at (317) 232-2240 Monday – Friday, 8 a.m. to 4:30 p.m., and a representative will assist you.

Tax returns filed using the wrong rates will be adjusted. This may result in a reduced refund, or an increase in the amount you owe.

Lake County and county tax When this publication was printed, Lake County had not adopted a county income tax. However, if Lake County did adopt a county income tax before the end of the year, you may owe tax to Lake County if you lived there on Jan. 1, 2008. See Special Instructions for Lake County Residents on page 27 for more information.

Renter’s Deduction The maximum amount of renter’s deduction you can claim has been raised from $2,500 to $3,000. See instructions on page 17 for more information.

Homeowner’s Property Tax Deduction Some property tax statements due in 2007 did not get issued until sometime in 2008. If you got one of these, see the instructions on page 18 to see if you are eligible for an extra deduction.

 Military Service Deduction The maximum amount of active, reserve or retirement pay (if at least 60 years old) one may deduct has been increased to $5,000 per qualified person. See page 20 for more information.

 National Guard and Reserve Component Members Deduction Certain members of the National Guard or a reserve component of the armed forces may be eligible for a new deduction. See instructions on page 23 for more information.

Qualified Patents Income Exemption (deduction) Income received from a utility or plant patent may be eligible for a deduction. See page 24 for more information.

 Estimated Tax and any carryover credit 

  • You may carryover some or part of your overpayment (refund) to next year’s estimated tax account. Beginning in 2008 you may no longer increase that amount by enclosing a payment. See page 13 for more information.
  • Use line 38 to give the breakdown of how you want your carryover applied. See page 13 for more information.

 Media Production Expenditure Credit A credit may be allowed for the production of movies, TV series, videos, etc. in Indiana. See page 13 for more information.

 Returned checks and other types of payments penalty If you make a tax payment with a check, credit card, debit card, or electronic funds transfer, and the department is unable to obtain payment for its full amount when it is presented for payment, a penalty is due. See page 16 for more information.

 Federal Economic Stimulus Payment The federal economic stimulus payment you may have received is not taxable by Indiana. See Line 6 - Other on page 9 for more information.

Enclosures Do not staple or paper clip enclosures. See page 6 for more information.

Schedules 3, 3A You are no longer required to file Schedules 3, 3A: Partnership and S Corporation Disclosure.

1-D barcode This year we’ve added a 1-D barcode to the bottom of our forms and schedules. This is done so we can automatically identify information about the form/schedule.

Need Tax Forms or Information Bulletins?

Use your personal computer Visit our Web site and download the forms you need. Our address is www.in.gov/dor/ 

Use your telephone Call the Forms Order Request Line (317) 615-2581 to have forms mailed to you. Have the following information ready to leave on the voice mail system:

  • Name of form or form number needed
  • Number of copies needed
  • Contact person’s name
  • Daytime phone number
  • A complete mailing address (including city, state and zip code)

Visit a district office, post office or library Tax forms are available at district offices listed on page 39. These offices are open Monday -Friday, 8 a.m. to 4:30 p.m. Also, contact your library or post office to find out if they stock any tax forms.

Get large print forms The Department has large print IT-40 booklets available for sight impaired Hoosier taxpayers. Call the Forms Order Request Line (317) 615-2581 to get a large print IT-40 booklet.

Need Help With Your Return?

 Local help For help, visit any of the district offices listed on page 39 or take advantage of the IRS Volunteer Return Preparation Program (VRPP). This program offers free tax return help to low income, elderly and special needs individuals. Volunteers will fill out federal and state forms for those who qualify. Call the IRS at 1-800-829-1040 to find the nearest VRPP location. Be sure to take your W-2s and any 1099s. If you are going to a district office, also take a copy of your completed federal tax return.

Automated information line Call the automated information line at (317) 233-4018 to get the status of your refund, billing information, and prerecorded tax topics. These topics include collection procedures, business registration requirements, payment-plan procedures, estimated tax procedures, underpayment of estimated tax penalty, use tax, county tax, and 2008 tax-year highlights. If you wish to check billing information, be sure to have a copy of your tax notice. The system will ask you to enter the tax identification number shown on the notice.

If you have a rotary phone, please call (317) 232-2240, 8 a.m. to 4:30 p.m., Monday -Friday, and a representative will help you.

Internet If you need help deciding which form to file, or need to get information bulletins or policy directives on specific topics, visit our Web site at www.in.gov/dor 

Telephone Call us at (317) 232-2240 Monday -Friday, 8 a.m. to 4:30 p.m., for help with basic tax questions.

Ready To File Your Return?

 Use an electronic filing program More than 1.7 million Hoosier taxpayers used an electronic filing program to file their 2007 state and federal individual income tax returns. Electronic filing provides Indiana taxpayers the opportunity to file their federal and state tax returns immediately, and receive their Indiana refunds in about half the time it takes to process a paper return. It takes even less time if you use direct deposit, which deposits your refund directly into your bank account. Even if there is an amount due on either return, Indiana taxpayers can still file electronically and feel comfortable knowing that the returns were received by the IRS and the Indiana Department of Revenue. Contact your tax preparer to see if he or she provides this service.

I-File This fast, friendly and free online program allows taxpayers to prepare and file state tax returns using the Internet. I-File features a question-and-answer format and help links to guide users through filing. For more information, and to take advantage of this free service, please visit our Web site at www.ifile.in.gov 

Our Web site Our Web site offers tax filing options, a Spanish version of the IT40 booklet with forms, downloadable blank forms and instructions, information bulletins, commissioner’s directives, an online helpdesk, helpful e-mail links and a calendar with filing due dates. Visit the Department’s Web site at www.in.gov/dor 

Where’s Your Refund?

There are several ways to check the status of your refund. You will need to know the exact whole-dollar amount of your refund, and a Social Security number entered on your tax return. Then, do one of the following:

  • Call (317) 233-4018 for automated refund information.
  • Go to www.in.gov/dor/3336.htm and click on the words “Look up the status of your refund online.”
  • Call (317) 232-2240 from 8 a.m. to 4:30 p.m. Monday - Friday, and a representative will help you.

A refund directly deposited to your bank account may be listed on your bank statement as a credit, deposit, etc. If you have received information from the Department that your refund has been issued, and you are not sure if it has been deposited in your bank account, call the ACH Section of your bank or financial institution for clarification.

Note: A refund deposited directly to your Hoosier MasterCard account will appear on your monthly statement.

Moving? You need to notify the Department if you move to a new address after filing your tax return, and you do not have a forwarding address on file with the post office. Change your address with us by doing one of the following:

  • Go to www.in.gov/dor/3336.htm and click on the words “Change your mailing address.”
  • Call the Department at (317) 232-2240.
  • Call or visit a district office near you (see list on page 39).

Public Hearing - June 2, 2009 The Department will hold a public hearing on June 2, 2009. Please come and share your ideas on how the Department of Revenue can better administer Indiana tax laws. The hearing will be held at 9 a.m. in Conference Room 32 of the Conference Center, Indiana Government Center South, 402 West Washington Street, Indianapolis, Ind. You may also submit your concerns in writing to: Indiana Department of Revenue, Commissioner’s Office, 100 North Senate Avenue, Indianapolis, IN, 46204.

Before You Begin

Important: Complete your federal tax return first.

Filling in the boxes

If you are filling out the form by hand, please use black or blue ink and print your letters and numbers neatly. If you do not have an entry for a particular line, leave it blank. Do not use dashes, zeros or other symbols to indicate that you have no entry for that line.

Social Security Numbe

r Be sure to enter your Social Security number in the boxes at the top of the form. If filing a joint return, enter your Social Security number in the first set of boxes and your spouse’s Social Security number in the second set of boxes. An incorrect or missing Social Security number can increase your tax due, reduce your refund or delay timely processing of your filing.

Individual Taxpayer Identification Number (ITIN)

If you already have an ITIN, enter it wherever your Social Security number is requested on your tax return. If you are in the process of applying for an ITIN, check the box located directly beneath the Social Security number area at the top of the form. For information on how to get an ITIN, contact the IRS at 1-800-829-3676 and request federal Form W-7, or find it online at www.irs.ustreas.gov/formspubs

Married Filing Separately

If you file your federal income tax return as married, filing separately, you must also file married, filing separately with Indiana. Enter both of your Social Security numbers in the boxes on the top of the form, then check the box directly to the right of those boxes. Enter the name of the person filing the return on the top line, but do not enter the spouse’s name on the second name line.

Married persons who live apart filing status

If you were not divorced or legally separated in 2008, you may have qualified for and filed as ‘head of household’ on your federal income tax return. If you did, don’t check the married filing separately box. Also, do not enter either your spouse’s name or Social Security number.

Name and address

The first Form IT-40 in this booklet may have your name(s) and address already filled in. If any of the information is incorrect, don’t use that form. Instead, print the correct information on the second Form IT-40 in the booklet and file it.

P.O. Box

Enter your P.O. Box number instead of your street address only if your post office does not deliver mail to your home.

School corporation number

Enter the four-digit school corporation number (found on pages 41 and 42) for where the primary taxpayer lived on Jan. 1, 2008. The primary taxpayer is the first name listed at the top of the tax return. If the primary taxpayer did not live in Indiana on Jan. 1, 2008, enter the code number “9999”. Contact a local school or your county auditor’s office if you’re not sure which school corporation you live in.

It is important that you enter the correct school corporation number. This information is used for statistical tracking purposes to determine possible school funding needs and changes.

Note: If the school corporation number is not entered, the processing of your return will be delayed.

Foreign or military addresses

The U.S. Post Office requires that the full foreign-country name appear in all addresses. Standard two-character abbreviations for Canadian provinces and territories should be entered in the “State” area on the tax return.

Overseas military addresses must contain the APO, FPO designation in the “city field” along with a two-character “state” abbreviation of AE, AP, or AA and the zip code. Place these two-and three-letter designations in the city name area.

County information

Enter the two-digit code numbers for the county(s) where you and your spouse, if filing joint, lived and worked on Jan. 1, 2008. You can find these code numbers on the chart on page 40 in the column titled County Code #. See the instructions beginning on page 24 for more information, including the definitions of the county where you live and work, details for military personnel, retired individuals, homemakers, unemployed individuals, out-of-state filers, etc.

Refund check address

Your refund check will be issued in the name(s), address and Social Security number(s) shown on your tax return. It is very important that this information is correct and legible. Any wrong information will delay your refund.

Rounding

Please round your amounts to the nearest whole dollar. To do this, drop amounts of less than $0.50. Example. $432.49 rounds down to $432.00. Increase amounts of $0.50 or more to the next higher dollar. Example. $432.50 rounds up to $433.00.

Losses or negative entries

Put brackets around any losses or negative entries. Example. (1.00).

Enclosing schedules, W-2s, etc.

You will find an enclosure sequence number in the upper right-hand corner of each schedule. Make sure to put your completed schedules in sequential order behind the IT-40 when assembling your tax return. Also, enclose all your W-2s, 1099s and check, if applicable. Do not staple or paper clip your enclosures. If you have a schedule on which you’ve made no entry, do not enclose it unless you have completed information on the back of it.

Who Should File?

You may need to file an Indiana income tax return if:

  • You lived in Indiana and received income, or
  • You lived outside Indiana and had any income from Indiana.

Note: If you and your spouse file a joint federal return, you must file a joint return with Indiana. If you and your spouse file separate federal returns, you must file separate returns with Indiana. There are four types of returns available. The type you need to file is generally based on your residency status. Read the following to decide if you are a full-year resident, part-year resident, or nonresident of Indiana, and which type of return you should file.

Full-year residents

Full-year residents must file Form IT-40, Indiana Full-Year Resident Individual Income Tax Return or Form IT-40EZ for Full-Year Indiana Resident Filers with No Dependents. If you filed a 2008 federal Form 1040EZ, were a full-year resident of Indiana, claim only the renter’s deduction and/or unemployment compensation deduction, and have only Indiana state and county tax withholding credits or an earned income credit, then you should file the simplified Form IT-40EZ. If you are not eligible to file Form IT-40EZ, or have any other deductions or credits, you must file Form IT-40.

You are a full-year Indiana resident if you maintain your legal residence in Indiana from Jan. 1 – Dec. 31 of the tax year. 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.

Retired persons spending the winter months in another state may still be full-year residents if:

  • They maintain their legal residence in Indiana and intend to return to Indiana during part of the taxable year,
  • They retain their Indiana driver’s license,
  • They retain their Indiana voting rights, and/or
  • They claim a homestead deduction on their Indiana home for property tax purposes.

Indiana allows $1,000 for each exemption claimed on your federal return, plus an additional $1,500 for certain dependent children (see instructions on page 9 for more information). If you did not have to file a federal return, you should complete a “sample” federal return to see how many exemptions you are eligible to claim.

If you were a full-year resident of Indiana and your gross income (the total of all your income before deductions) was greater than your total exemptions, you must file Indiana Form IT-40 or IT-40EZ.

If your gross income is less than your total exemptions, you are not required to file. However, you may want to file a return to get a refund of any state and/or county tax withheld by your employer, or other refundable credits, such as an earned income credit.

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 next paragraph) and had income from Indiana (except certain interest, dividends, or retirement income), you must file Form IT-40PNR.

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.

Deceased taxpayers

If an individual died during 2008, or died after Dec. 31, 2008, but before filing his/her tax return, the executor, administrator or surviving spouse must file a tax return for the individual if:

  • The deceased was under the age of 65 and had gross income over $1,000,
  • The deceased was age 65 or older and had gross income over $2,000, or
  • The deceased was a nonresident and had gross income from Indiana.

Be sure to enter the month and day of death for the taxpayer or spouse in the appropriate box located on the back of the IT-40. For example, a date of death of Jan. 9, 2008, would be entered as 01/09/2008. Note: The date of death should not be entered here if the individual died after Dec. 31, 2008, but before filing the tax return. The date of death information will be shown on the individual’s 2009 tax return.

Signing the deceased individual’s tax return

If a joint return is filed by the surviving spouse, the surviving spouse should sign his or her own name and after the signature write: “Filing as Surviving Spouse.”

An executor or administrator appointed to the deceased’s estate must file and sign the return (even if this isn’t the final return), indicating their relationship after their signature (e.g. administrator).

If there is no executor, or if an administrator has not been appointed, the person filing the return should sign and give their relationship to the deceased (e.g. “John Doe, nephew”). Only one tax return should be filed on behalf of the deceased.

Note: The Department may ask for a copy of the death certificate, so please keep a copy with your records.

A refund check for a deceased individual

If you (the surviving spouse, administrator, executor or other) have received a refund check and cannot cash it, contact the Department to get a widow’s affidavit (POA-30) or a distributee’s affidavit (POA-20) at www.in.gov/dor/3508.htm. Send the completed affidavit, the refund check and a copy of the death certificate to the State Auditor’s Office so a refund check can be issued to you.

Military personnel - residency

If you were an Indiana resident when you enlisted, you remain an Indiana resident no matter where you are stationed. You must report all your income to Indiana on Form IT-40.

If you changed your legal residence (military home of record) during 2008, you are a part-year resident and should file Form IT-40PNR. You must also enclose a copy of Military Form DD-2058 with the tax return. As an Indiana part-year resident you will be taxed on the income you earned while you were a resident of Indiana, plus any income from Indiana sources.

If you are stationed in Indiana and you are a resident of another state, you won’t need to file with Indiana unless you have non-military income from Indiana sources.

 Example. Annie, who is a Kansas resident, is stationed in Indiana. She earned $1,300 from her Indiana part-time job. She’ll need to report that income to Indiana on Form IT-40PNR.

If you are a full-year Indiana resident in the military, your spouse is a legal resident of another state and you filed a joint federal return, you will need to file Form IT-40PNR.

Important: Refer to the instructions on page 25 for an explanation of county of residence for military personnel.

When Should You File?

Your tax return is due April 15, 2009. If you file after this date, you may have to pay interest and penalty. See page 15 for more information. Fiscal year tax returns are due by the fifteenth (15) day of the fourth (4th) month after the close of the fiscal year. You must complete the fiscal year filing period information at the top of the form.

Penalty for late payment

If you do not file your tax return and pay the amount of tax owed by the due date, Indiana law requires you to pay penalty and interest on the late payment. See page 15 for instructions on penalty and interest.

What if you can’t file on time?

If you can’t file by the due date and you don’t think you will need to make a payment when you file your return, you are not required to file for an extension of time to file. However, if you are expecting a refund, you might need an extension of time to file if you are claiming the Unified Tax Credit for the Elderly. See page 11 for instructions on the Unified Tax Credit for the Elderly.

If you can’t file on time, and expect to owe when you file, you may need to apply for an extension of time to file. The extension allows additional time to complete and file your income tax return; however, the extension does not provide additional time to pay the amount of tax owed.

To make the extension valid, you will need to estimate 90 percent of your expected tax, subtract the credits you expect to have, and pay any remaining amount due by April 15, 2009.

Get Indiana’s extension Form IT-9, and mail it (including your payment) by April 15, 2009. This extends the filing date to June 15, 2009. Form IT-9 is located with the forms in the middle of the booklet. You may also file for an extension and make an extension payment online at www.in.gov/dor/epay

Indiana also recognizes valid federal extension dates, plus 30 days. If you have a federal extension, enclose a copy of Form 4868 with your Indiana return when filing. Make sure you file no later than Nov. 16, 2009. Note: Remember, 90 percent of the tax due to Indiana must still be paid by April 15, 2009, to avoid a penalty charge. Interest will be due on any tax that remains unpaid during the extension period.

Military personnel on duty outside of the United States and Puerto Rico on the filing due date are allowed an automatic 60 day extension of time to file. A statement must be enclosed with the return verifying that you were outside of the United States or Puerto Rico on April 15, 2009.

Military personnel in a presidentially declared combat zone have an automatic extension of 180 days after they leave the combat zone. Also, if they are hospitalized outside the United States as a result of such service, the 180 day extension period begins after being released from the hospital. The spouse of such service member must use the same method of filing for both federal and Indiana (e.g. single or joint). When filing the return, write “Combat Zone” across the top of the form (above your Social Security number).

Note: Valid extensions are only for filing purposes. Interest will be due on any tax that remains unpaid during the extension period.

Income and Indiana Additions: Line-by-line instructions

You must complete your federal income tax return (Form 1040, 1040A or 1040EZ) before starting your Indiana income tax return. Line numbers from your federal income tax return are referenced in many of the following instructions. While every effort has been made to make the instructions as clear as possible, sometimes the line numbers change on the federal income tax return after the Indiana forms are printed. Please contact us if you are unsure as to whether or not you are looking at the correct line on your federal income tax return (see page 4 of this booklet for contact information).

When not to fill in a line

If you do not have an entry for a particular line, leave it blank. Do not use dashes, zeros or other symbols to indicate that you have no entry for that line.

Example. Steve does not have income taxed on federal Form 4972. Steve will leave line 4 blank.

Line 1 - Federal adjusted gross income

Enter the adjusted gross income from your federal Form 1040 (line 37), 1040A (line 21), or 1040EZ (line 4). If you were not required to file a federal return, complete a “sample” federal return and report the amount you would have shown on your federal return if you had been required to file.

If the amount is a loss, or negative entry, place it in a (bracket).

Line 2 - Tax add-back

If you did not complete Federal Schedules C, C-EZ, E, or F, which include sole proprietorship income, farm income, rental, partnership, S corporation, and trust and estate income (or loss), then do not complete this line.

On those schedules you are allowed to claim a deduction for taxes paid which are:

  • based on, or
  • measured by income, and
  • levied at a state level by any state in the United States.

If you claimed this kind of deduction on any of these schedules, then you must add it back to your Indiana income.

 Do not add back property taxes on this line.

 Note: Income, losses and/or expenses from other schedules and forms may flow through to federal Schedules C, E and F. For example, partnership income from federal Schedule K-1 (Form 1065) may be included on federal Schedule E, while expenses from federal Form 8829 may be included on federal Schedule C. Make sure to check these schedules and forms for any deduction that needs to be added back.

Line 3 - Net operating loss add-back

Any net operating loss (NOL) deduction taken on line 21 of your federal Form 1040 must be added back on this line. Write the amount of the net operating loss as a positive figure. (You will claim an Indiana net operating loss deduction on Schedule 1, under line 11.)

Note: If your federal adjusted gross income this year is a loss, and you have not included a net operating loss as a deduction on line 21 of your 2008 federal Form 1040, then leave this line blank.

Line 4 - Lump sum distribution

If you completed federal Form 4972, add any capital gains reported on Part II and any ordinary income reported on Part III of federal Form 4972. Enter the total here as a positive amount.

Line 5 - Domestic production activities add-back

If you claimed a domestic production activities deduction on your federal Form 1040, line 35, enter that amount here.

Line 6 - Other

Bonus depreciation -You must make an exception for any bonus depreciation deduction used for property placed in service after Sept. 11, 2001. Bonus depreciation is the additional first-year special depreciation deduction allowed under Section 168(k) of the Internal Revenue Code (IRC).

Figure the net income (or loss) which would have been included in federal adjusted gross income had the bonus depreciation method not been used. Then, enter the difference, which may be a positive or negative amount, on line 6.

 Example. Mack used the bonus depreciation method for federal income tax purposes. After refiguring the depreciation without using the bonus method, he has to add back $1,500 on his Indiana tax return.

Note: After making an initial adjustment for bonus depreciation you’ll need to refigure the amount of depreciation available for state tax purposes for subsequent years.

Example. Ann made an initial adjustment for bonus depreciation on last year’s Indiana tax return. This year she figures she is entitled to a $150 additional depreciation amount for state tax purposes. She should enter that amount as a negative entry, or ($150), on line 6.

For additional information see Commissioner’s Directive #19 at www.in.gov/dor/3617.htm

Federal economic stimulus payment -If you received an economic stimulus payment, do not include it here. Indiana will not tax it.

Section 179 expense -You may have figured IRC Section 179 expense using up to a $100,000 ceiling for federal tax purposes. Indiana allows you to figure IRC Section 179 expense using a ceiling of no more than $25,000. If you figured IRC Section 179 expense using a ceiling amount of more than $25,000, you’ll need to add back the difference between it and $25,000 on line 6.

Line 8 – Indiana deductions

Use Schedule 1 to figure your Indiana deductions. Instructions for Schedule 1 begin on page 17.

Indiana Exemptions: Lines 10 - 13

 Important: Keep detailed information about the exemption(s) you are claiming, such as full name(s), age(s), Social Security number(s), etc. The Department can require you to provide this information at a later date.

Line 10 - Exemptions

You are allowed $1,000 for each exemption claimed on your federal return. Enter in the box on line 10 the total number of exemptions claimed on your federal return. Multiply $1,000 by that number, and enter the answer here.

Example. John and Lisa have a 12-year-old daughter. On John and Lisa’s joint federal return they claim themselves and their daughter as exemptions. They’ll enter 3 in the box on line 10 for a total of $3,000 exemptions.

If you do not have to file a federal return, you will need to complete a “sample” federal return to see how many federal exemptions you are allowed to claim.

Important: If no exemption is claimed on your federal return, you can still claim yourself (even if you are claimed on a parent’s or guardian’s return).

Line 11 - Additional exemption for dependent child

An additional $1,500 exemption is allowed for certain dependent children. Carefully read the following Dependent Child Definition to see if you are eligible for this additional exemption(s).

Dependent child definition: According to state statute, a dependent child must be a son, stepson, daughter, stepdaughter and/or foster child (and/or your spouse’s child, if filing a joint return). He/she must be either under the age of 19 by Dec. 31, 2008, or be a full-time student who is under the age of 24 by Dec. 31, 2008.

If any dependent(s) you are eligible to claim on your federal return also meets the Dependent Child Definition above, enter that number in the box on line 11.

Example. John and Lisa claimed their 12-year-old daughter as an exemption on their federal return. Since their daughter is under the age of 19, John and Lisa will claim one exemption on line 11 for a total of $1,500.

Example. Jessie’s elderly father and her nine-year-old daughter lived with her the entire year. She claimed both as dependents on her federal return. Jessie will claim her daughter for the additional exemption on line 11. She is not allowed to claim the additional exemption for her father.

Note: Not all dependent children are eligible for this additional exemption. For instance, if you claimed a grandson or nephew as an exemption on your federal return, you should also claim an exemption for him on line 10. However, since he doesn’t qualify under the Dependent Child Definition above, you will not be able to claim the additional exemption for him on line 11.

Line 12 - Age 65 or older or blind

If you and/or your spouse (if filing a joint return) are age 65 or older, you and /or your spouse can take an additional $1,000 exemption. If you and/or your spouse (if filing a joint return) are legally blind, you and/or your spouse can take an additional $1,000 exemption. Mark the boxes that apply to you and/or your spouse. Enter the total number of boxes marked on this line and multiply by $1,000.

Line 13 - Additional exemption for age 65 or older

An additional $500 exemption is available for you and/or your spouse (if filing a joint return) if you are age 65 or older and the amount on line 1 is less than $40,000. Mark the boxes that apply to you and/or your spouse. Enter the total number of boxes marked on this line and multiply by $500.

Line 17 – County tax

To figure your county tax, complete Schedule CT-40. Instructions for Schedule CT-40 begin on page 24.

Line 18 - Use tax on out-of-state purchases

If you have purchased items while you were outside Indiana, through the mail (for instance, by catalog or offer through the mail), through radio or television advertising and/or over the Internet, these purchases may be subject to Indiana sales and use tax, if sales tax was not paid at the time of purchase. This tax, called “use” tax, is figured at 6 percent for purchases made from Jan. 1, 2008 through March 31, 2008, and 7 percent for purchases made from April 1, 2008 through Dec. 31, 2008.

When you make purchases from a company in Indiana, that company is responsible for collecting the Indiana sales tax from you.When you make purchases from an out-of-state company, you are responsible for making sure the use tax is paid. Either the out-of-state company collects the tax from you, or you must pay the tax directly to the State of Indiana.

Complete the worksheet above to figure your tax. If you paid sales tax to the state where the item was originally purchased, you are allowed a credit against your Indiana use tax for an amount up to 6 percent for purchases made from Jan. 1, 2008 through March 31, 2008, and 7 percent for purchases made from April 1, 2008 through Dec. 31, 2008.

Line 19 - Household Employment Taxes

If you paid cash wages during 2008 to an individual who is not

  • Your spouse,
  • Your child under age 21,
  • Your parent,
  • An employee under age 18;

And the individual worked in and around your home as a baby-sitter, nanny, health aide, private nurse, maid, caretaker, yard worker or someone who does similar domestic duties, then that individual may be defined as your employee.

For more information on defining an employee see Federal Publication 926, Household Employer’s Tax Guide. Visit www.irs.gov/formspubs or call the IRS at 1-800-829-1040.

If you paid cash wages over $1,600 to a household worker who is your employee, or total cash wages of $1,000 or more in any calendar quarter of 2007 or 2008 to all household employees, you should have withheld state and county income taxes. To pay these taxes on your Indiana income tax return, contact the Department for Schedule IN-H, or download one from www.in.gov/dor/3910.htm

Line 20 - Indiana Advance Earned Income Credit Payment (from W-2s)

Enter the total amount of Indiana advance earned income credit payments you received. This amount is shown on your W-2 form in the box directly beneath box 19 (‘INADV’ should be in the box directly beneath box 20).

Line 21 – Recapture of Indiana’s CollegeChoice 529 Education Savings Plan Credit

You may be eligible for a credit if you made a contribution(s) to Indiana’s CollegeChoice 529 Education Savings Plan (see instructions on page 33 for credit details). However, if you made a non-qualified withdrawal(s) from this plan, you will probably have to repay some or all of any credits previously claimed.

Withdrawals made for higher education expenses tend to be qualified withdrawals. Other withdrawals may fall under the category of ‘nonqualified’. For more information about withdrawals, contact the Department for Income Tax Information Bulletin #98 at www.in.gov/dor/3650.htm See Schedule IN-529R at www.in.gov/dor/3910.htm to figure any amount to be recaptured.

Indiana Credits

Lines 23 and 24 - Indiana state and county tax withheld

The amount of state tax withheld is usually shown in box 17 and the amount of county tax withheld is usually shown in box 19 of the W-2s. You must enclose your W-2s, and/or Form 1099s with your tax return to verify the amount withheld.

 Note: Do not claim credit for taxes withheld for states other than Indiana or for localities outside Indiana.

If you had more than one job, enclose a W-2 from each job so you can get credit for all Indiana state and county tax withheld.

If you had Indiana state and/or county tax withheld on any other federal form, such as a W-2G or 1099R, you must enclose them with the tax return to get credit for the amount withheld.

If you are filing a joint return, be sure to include your spouse’s W2s and/or Form 1099s, if they show Indiana state and/or county tax withholding amounts.

Use of substitute W-2s will delay the processing of your return and/or refund.

Line 25 - 2008 Estimated tax paid

If you made estimated tax payments, enter the total paid for 2008 on this line. Also, include any extension payment made with Form IT-9 “Extension of Time to File” for tax year 2008.

Note: Do not include on this line any estimated tax paid for tax year 2009.

Line 26 - Unified Tax Credit for the Elderly

You may be able to claim a credit if you or your spouse meet all the following requirements:

  • You and/or your spouse must have been age 65 or older by Dec. 31, 2008,
  • If married and living together at any time during the year, you must file a joint return,
  • The amount on line 1 of Form IT-40 must be less than $10,000,
  • You must have been a resident of Indiana for six months or more during 2008, and
  • You must not have been in prison for 180 days or more in 2008.

Note: Disabled persons under age 65 do not qualify for this credit.

Important:

  • If your spouse died after Jan. 1, 2008, you can claim this credit by filing a joint return.
  • If a person dies and does not have a surviving spouse, then no one can claim the credit on behalf of the deceased person.
  • If your income is low enough that you are not required to file a Form IT-40, and you meet the requirements for claiming the Unified Tax Credit for the Elderly, do not file Form IT-40. Instead, file the simplified Form SC-40 to claim this credit.

Note: You must file the Form IT-40 if you are eligible for the Lake County residential income tax credit. See line 28 instructions on page 12 for more information.

Form SC-40 can be found at www.in.gov/dor/3910.htm Or call (317) 615-2581. You can claim the credit on either Form IT-40 or Form SC40, but file only one of these forms, and only file once.

The deadline for claiming this credit is June 30, 2009.

The only exception to this rule is if you have a valid federal extension of time to file your tax return. See What if you can’t file on time? on page 8 for information about extensions of time to file.

To figure your Unified Tax Credit for the Elderly:

 Use Table A if: You meet all the requirements listed above, and:

  • You are filing a joint return, lived with your spouse during 2008, both were Indiana residents for at least six months and both were age 65 or older by Dec. 31, 2008, or
  • Both you and your spouse met all the above-requirements and your spouse died after Jan. 1, 2008.

Table A Joint Filers Both Age 65 or Older

If the income on Line 1 of Form IT-40 is: Your Allowable Credit* is:
less than $1,000 $140
between $1,000 and $2,999 $90
between $3,000 and $9,999 $80

Use Table B if: You meet all the requirements listed above, and:

  • You are age 65 or older and are single or widowed,
  • You are filing a joint return and only one is age 65 or older,
  • You are filing a joint return and only one was an Indiana resident for at least six months, or
  • You are married but did not live with your spouse during 2008, are age 65 or older and are married filing separately.

Table B Only One Person Age 65 or Older

If the income on Line 1 of Form IT-40 is: Your Allowable Credit* is:
less than $1,000 $100
between $1,000 and $2,999 $50
between $3,000 and $9,999 $40

* Once you have located your credit on Table A or Table B, enter that amount on line 26.

Line 27 Indiana’s Earned Income Credit: Schedule IN-EIC

Indiana’s earned income credit is based on your federal earned income credit. If your federal earned income credit is $9 or more, you may be eligible for Indiana’s earned income credit. The earned income credit will lower the tax you owe and may give you a refund even if you don’t owe any tax.

To claim the credit you must complete and enclose Schedule IN-EIC. For additional information see Income Tax Information Bulletin #92 at www.in.gov/dor/3650.htm, and Schedule IN-EIC at www.in.gov/dor/3910.htm

Line 28 - Lake County (Indiana) Residential Income Tax Credit

You may be eligible to claim a Lake County (Indiana) residential income tax credit if you meet all three of the following requirements.

  •  You paid property tax to Lake County (Indiana) during 2008 on your residence. Your “residence” is your principal dwelling. You must either own or be buying the residence under contract, and must pay property tax to Lake County (Indiana) on that residence.
  •  Your earned income must be less than $18,600. Earned income is the combination of your (and your spouse’s, if filing a joint return) wages, salaries, tips and other compensation, plus net earnings from self-employment (income on which you are required to pay self-employment tax on federal Schedule SE).

NOTE: Income from pensions, interest, dividends, Social Security, etc., is not classified as earned income.

Example. Sue has $17,000 wage income, $300 interest income and $7,000 pension income. Even though her total income is $24,300, Sue will qualify for the credit because her earned income is less than $18,600 (it is $17,000).

Important: You are not required to have earned income to be eligible for this credit.

Example. Dale receives $17,000 pension income, $3,000 Social Security income and $100 interest income. He meets the income eligibility requirement because his earned income is less than $18,600 (it is zero).

  • You are not claiming the homeowner’s residential property tax deduction on Indiana Schedule 1, line 2, Box A.

How do I figure my credit?

Step 1 Did you pay property tax to Lake County (Indiana) on your residence for 2008?

Yes No

If yes, continue to Step 2.

If no, STOP. You do not qualify for this credit.

Step 2 Enter your earned income. This will include your (and your spouses, if filing a joint return) wage, salary, tip and other compensation, plus net earnings from self-employment.

$ ____

Step 3 If the amount in Step 2 is greater than $18,600, STOP. You do not qualify for this credit.

If the Step 2 amount is less than $18,000, skip to Worksheet A.

If the Step 2 amount is between $18,000 and $18,600, skip to Worksheet B.

Worksheet A: Complete if your earned income is less than $18,000.

A1 Enter the amount of Indiana property tax you paid on your Lake County residence $ ______
A2 Maximum credit. $ __300
A3 Enter the smaller of A1 or A2. This is your credit. Enter here and on IT-40, line 28 $ ______

Worksheet B: Earned Income Phaseout
Complete if your earned income is between $18,000 and $18,600.

B1 Allowable maximum earned income. $ 18,600
B2 Enter your earned income from Step 2 on page 12 $ ______
B3 Subtract B2 from B1 (if answer is zero or a (negative) amount, STOP. You do not qualify for this credit) $ ______
B4 Multiply the amount on B3 by .5 $ ______
B5 Enter the amount of Indiana property tax you paid on your Lake County residence $ ______
B6 Enter the smaller of B4 or B5. This is your credit. Enter here and on IT-40, line 28. $ ______

Important: Remember, you can claim either this credit OR the homeowner’s residential property tax deduction on Schedule 1, line 2, Box A, but not both.

Line 29 – Economic Development for a Growing Economy Credit (EDGE Credit)

If you have business income (including partnership or S corporation income) you may be eligible for the EDGE credit. This credit is available to businesses who conduct certain activities that are designed to foster job creation or job retention in Indiana.

This credit is available to pass-through entities, such as members of partnerships and S corporations.

Contact the Indiana Economic Development Corporation (IEDC), One North Capitol, Suite 700, Indpls., IN, 46204, for eligibility requirements, or visit www.in.gov/iedc for additional information.

 Note: The approved credit agreement letter from the IEDC must be enclosed, or this credit will not be allowed.

Line 30 – Media Production Expenditure Credit

This credit is for qualified media production expenditures. The minimum qualified production expenditure for a feature length film, including a short feature; an independent or studio production; a documentary; and a television series, program, or feature, must be at least $100,000 to qualify for the credit. The minimum qualified production expenditure for a digital media production, an audio recording, a music video, an advertising message broadcast on radio or television, or a media production concerning training or external marketing or communications is $50,000.

Pass-through entities (such as members of S corporations and partnerships) are eligible for this credit.

Contact the Indiana Economic Development Corporation, One North Capitol, Suite 700, Indianapolis, IN, 46204 for additional information about this credit. The approved credit agreement letter from the IEDC and a computation of the credit must be enclosed with the return. Otherwise, this credit will not be allowed.

Get Commissioner’s Directive #36 at www.in.gov/dor/3617.htm for additional information.

Line 31 – Indiana Credits

To figure your Indiana credits, complete Schedule 2. Instructions for Schedule 2 begin on page 28.

Line 32 – Overpayment

If the line 34 total credits are more than the line 33 total tax, you have an overpayment. Enter the difference between those two amounts here.

 A note about refund offsets Indiana law requires that money you owe to the state, its agencies and certain federal agencies be deducted from your refund or credit before a refund is issued. This includes money owed for past-due taxes, student loans, child support, food stamps or an IRS levy. If the Department applies your refund to any of these debts, you will receive a letter explaining the situation.

Line 36 - Contribution to Indiana Nongame Wildlife Fund

The Indiana Wildlife Diversity Section offers you the opportunity to play an active role in conserving Indiana’s nongame and endangered wildlife. This program is funded through public donations to Indiana’s Nongame Fund. The money you donate goes directly to the protection and management of more than 750 wildlife species in Indiana -from songbirds and salamanders to state-endangered Trumpeter swans and spotted turtles.

Enter the amount of your refund you wish to donate to the Nongame Wildlife Fund on line 36. You can donate all or a part of your refund. Donations must be a minimum of $1.

If you are not receiving a refund, but want to support the Wildlife Diversity Section, do not change your tax return. You can send a donation directly to the Nongame Fund by completing the form on the back of this booklet.

Read more about Indiana’s Wildlife Diversity Section and learn how donations have helped Indiana’s endangered wildlife at ww.in.gov/dnr/fishwild

 Note: The Department may examine your return and find that your actual overpayment or refund is less than you calculated. If you entered a donation to the Indiana Nongame Wildlife Fund and wish to apply some of your overpayment to your 2009 estimated tax account, the overpayment will be applied first to the wildlife fund and then to the estimated tax account. Any amount left will be refunded to you.

Line 38 - Amount to be applied as a 2009 estimated tax installment payment

If you expect to have income during the 2009 tax year that:

  • Will not have Indiana income taxes withheld, or
  • If you think the amount withheld will not be enough to pay your tax liability, and
  • You expect to owe more than $1,000 when you file your tax return, then you should pay estimated tax.

There are several ways you can make estimated tax payments. First, use the worksheet on Form ES-40 (located with the forms in the middle of the booklet) to see how much you will owe. Then, if you have an overpayment showing on line 37 of your tax return, you can have some or all of the overpayment applied to next year’s estimated tax account. To do so, enter any portion of the overpayment:

  • On line a, if you want to apply an amount to offset estimated county tax due (from Form ES-40, line K). Also, enter the 2-digit county code from line K; and/or
  • On line b, if your spouse lived in a different county than you did on January 1, 2009, and you want to apply an amount to offset your spouse’s estimated county tax due (from Form ES-40, line L). Also, enter the 2-digit county code from line L; and/or
  • On line c, if you want to apply an amount to offset your estimated state tax due (from Form ES-40, line J).

Example. Chris and Megan have a $420 overpayment, and want to apply some of it to their 2009 estimated tax account. Their worksheet from Form ES-40 has the following breakdown:

  • Line I (each installment payment) is $300;
  • Line J (portion that represents state tax due) is $270
  • Line K (portion that represents county tax due) is $30

They will enter $30 on line 38a (along with their 2-digit county code), $270 on line 38c, and the $300 total amount to be applied will be entered on line 38d. They will get a $120 refund ($420 overpayment -$300 applied to their 2009 estimated tax account).

Example. Stu wants to pay $500 in estimated tax for each installment period. He has a $30 overpayment on his tax return. He chooses to enter the full $30 overpayment on line 38c (Indiana adjusted gross income tax amount), and carries it over to line 38d. (He will pay the $470 additional amount by filing the Form ES-40.)

 Important: Estimated tax installment payments made for the 2009 tax year are due by April 15, 2009, June 15, 2009, Sept. 15, 2009 and Jan. 15, 2010. Any installment payment amount entered on line 38d will be considered to be paid on the day your tax return is filed (postmarked). For instance, an installment payment shown on a return filed on: April 15, 2009, will be considered to be a 2009 first installment payment; June 3, 2009, will be considered to be a 2009 second installment payment; and July 22, 2009, will be considered to be a 2009 third installment payment.

 Note: If you are filing this return after Jan. 15, 2010, you will not be able to make an installment payment on this line. Note: You may use Form ES-40 to make a payment by check or money order. Estimated tax payments may also be made online, via credit card or check, at www.in.gov/dor/epay See line 45 instructions on page 15 for details about payment options.

For additional information about estimated taxes see Income Tax Information Bulletin #3 at www.in.gov/dor/3650.htm

Line 39 - Penalty for underpayment of estimated tax

You might owe a penalty for the underpayment of estimated tax if you did not have taxes withheld from your income and/or you did not pay enough estimated tax throughout the year.

In fact, not properly paying estimated tax is one of the most common errors made in filing Indiana tax returns.

Generally, if you owe $1,000 or more in state and county tax for the year that’s not covered by withholding taxes, you need to be making estimated tax payments.

You might owe this penalty if:

  • The total of your credits, including timely estimated tax payments, is less than 90 percent of this year’s tax due or 100 percent* of last year’s tax due, ** or
  • You underpaid the minimum amount due for one or more of the installment periods.

If either of these cases apply to you, you must complete Schedule IT-2210 or IT-2210A to see if you owe a penalty or if you meet an exception. If you owe this penalty, enclose Schedule IT-2210 or IT2210A with your tax return and write the penalty amount on Form IT-40, line 39.

*You must have timely paid 100 percent of lines 16 and 17 of your 2007 IT-40. Note: If last year’s Indiana adjusted gross income was more than $150,000 ($75,000 for married filing separately), you must pay 110 percent of last year’s tax (instead of 100%).

**Farmers and fishermen should see the special instructions on page 16.

Important. If it looks like you owe a penalty for the underpayment of estimated tax, and:

  • You didn’t report a penalty amount on line 39, and
  • You didn’t enclose Schedule IT-2210 or Schedule IT-2210A showing you meet an exception to owing a penalty,

Then the Department will automatically figure a penalty for you.

Should I use Schedule IT-2210 or IT-2210A?

Schedule IT-2210 should be used by individuals who receive income (not subject to withholding tax) on a fairly even basis throughout the year. This schedule will help determine whether a penalty is due, or whether an exception to the penalty has been met.

Example. Jim and Sarah together received $1,000 in pension income each month. Since their income is received on a fairly even basis, they’ll use Schedule IT-2210 to figure their penalty or exception to the penalty.

Schedule IT-2210A should be used by individuals who receive income (not subject to withholding tax) unevenly during the year. This schedule will help determine whether a penalty is due, or whether an exception to the penalty has been met.

Example. Bill’s income is from selling fireworks in June and July. He will want to figure any penalty due on Schedule IT-2210A, which may exempt him from having had to pay estimated tax on the April 15, 2008, first installment due date.

Example. Rachael received a sizeable lump sum distribution in Dec. of 2008. She figured how much estimated tax was due, and paid it by the Jan. 15, 2009, fourth period installment due date. By completing Schedule IT-2210A, she shows she owes no penalty for the first three installment periods, and that a proper payment was made for the fourth installment period. She will owe no penalty.

Visit our Web site at www.in.gov/dor/3910.htm to get Schedule IT-2210 or IT-2210A.

Line 40 Refund

You have a refund if line 37 is greater than the combined amounts entered on lines 38d and 39. No refund will be issued if the overpayment is less than one dollar.

 Note: If the combination of line 38d plus line 39 is greater than the line 37 amount, you must make an adjustment. The estimated tax carryover amount on line 38 is limited; it cannot be greater than the remainder of line 37 minus line 39. See the second example in the left-hand column on page 14 for clarification.

Please wait 12 weeks before you contact the Department about your refund.

Note: There is a statute of limitations on filing refund claims. When filing your 2008 tax return, a claim for refund of excess withholding credits must be made no later than April 15, 2011. A claim for refund of all other excess payments and refundable credits must be made by April 16, 2012. (The claim is considered to be made on the day your return is postmarked.) If you file your 2008 tax return after the statute of limitations has expired, no refund will be issued.

Line 41 - Direct deposit

You may choose to have your refund deposited in your checking, savings or Hoosier Works Master Card account. If you want your refund directed into your checking or savings account, complete lines 41a, b and c.

  • The routing number is nine digits, with the first two digits of the number beginning with 01 through 12 or 21 through 32. Do not use a deposit slip to verify the number because it may have internal codes as part of the actual routing number.
  • The account number can be up to 17 digits. Omit any hyphens, accents and special symbols. Enter the number from left to right and leave any unused boxes blank.
  • Check the appropriate box for the type of account you are making your deposit to: either a checking account or savings account.

Note: The routing and account numbers may appear in different places on your checks.

If you currently have a Hoosier Works MasterCard and wish to have your refund directly deposited in your account, enter your 12-digit account number on line 41b, where it says “Account Number” (do not write anything on line 40a “Routing Number”). You can find your 12digit account number in the upper right-hand corner of your account monthly statement.

Note: DO NOT use your MasterCard 16-digit number.

Make sure to check the “Hoosier Works MC” box on line 41c.

For more information on direct deposit, please see “Where’s Your Refund” on page 5.

Line 42 - Subtotal

If line 40 is less than zero, you have an amount due. Enter here as a positive number and skip to line 43.

OR

If line 33 is greater than line 34, complete the following steps:

A. Subtract line 34 from line 33 and enter the total here ______
B. Enter any amount from line 39 ______
C. Add lines A + B. Enter total here and on line 42 ______

Line 43 - Penalty

If your tax return is filed after the April 15, 2008, due date and you have an amount due, you will probably owe a penalty. Penalty is 10 percent of the amount due (line 42 minus line 39) or $5, whichever is greater. Exception: If you have an extension of time to file, are filing by the extended filing due date and have prepaid at least 90 percent of the amount due by April 15, 2009, then no penalty is due.

Line 44 - Interest

If your tax return is filed after the April 15, 2009, due date and you have an amount due, you will owe interest (even if you have a valid extension of time to file). Interest should be figured on the sum of line 42 minus line 39. Contact the Department at (317) 232-2240 or visit our Web site at www.in.gov/dor/3618.htm to get Departmental Notice 3 for the current interest rate.

Line 45 - Amount you owe - payment options

There are several ways to pay the amount you owe.

Make your check, money order or cashiers check payable to: Indiana Department of Revenue. Just include the payment loose in the envelope. Do not staple it to the return. Do not send cash.

You may also pay using the eCheck payment method. This service uses a paperless check and may be used to pay the tax due with your Indiana individual income tax return, as well as any billings issued by the Indiana Department of Revenue for any tax type. To pay, go to www.in.gov/dor/epay and follow the step-by-step instructions. You will receive a confirmation number and should keep this with your tax filing records. The fee for using this service is $1.

Note: All payments made to the Indiana Department of Revenue must be made with U.S. funds.

You may also pay by using your American Express. Card, Discover. Card, MasterCard. or VISA. by calling 1-800-2-PAY TAX (1-800272-9829). Or, log on to www.in.gov/dor/epay and use your Discover. Card, MasterCard. or VISA. to make a payment.

A convenience fee will be charged by the credit card processor based on the amount you are paying. You will be told what the fee is and you will have the option to either cancel or continue the credit card transaction.

Note: No payment is due if you owe less than $1.

Returned checks and other types of payments

If you make a tax payment with a check, credit card, debit card or electronic funds transfer, and the Department is unable to obtain payment for its full amount when it is presented for payment, a 10 percent penalty of the unpaid tax or the face value of the check, credit card, debit card, or electronic funds transfer, whichever is smaller, is due.

The assessed amount will be due immediately upon receipt of the tax due notice and must be paid by certified check, bank draft or money order. If payment is not received immediately, the penalty will be increased to the face value of the intended payment or 100 percent of the unpaid tax, whichever is smaller. Also, any permits and/or licenses issued by the Department may be revoked if the assessed amount is not paid immediately.

Additional Information

Out-of-state income information If you and/or your spouse worked in Illinois, Kentucky, Michigan, Ohio, Pennsylvania and/or Wisconsin you must enter your salary, wage, tip and/or commission income from those states in the appropriate boxes. Note: This entry is for information purposes only, and will not change your refund or the amount you may owe.

 Farmers and fishermen Farmers and fishermen have special filing considerations. If at least two-thirds (2/3) of your gross income is from farming or fishing, mark the box provided on the back of the tax return. This will make sure that a penalty for the underpayment of estimated tax is not assessed provided you have followed through by:

  • Paying all your estimated tax on or by Jan. 15, 2009, and filing your Form IT-40 by April 15, 2009, or
  • Filing your Form IT-40 by March 2, 2009, and paying all the tax due at that time.

You are not required to make an estimated tax payment if you use this option. If you pay all the tax due, you will not be penalized for failure to pay estimated tax.

 Important: If you have checked the box, you must enclose the completed Schedule IT-2210 or IT-2210A to support your claim.

Are you filing a federal income tax return?

You must check the "yes" or "no" box to answer the question: "Are you filing a federal income tax return for 2008?"

Deceased individual information

If the taxpayer and/or spouse died during 2008, and this return is being filed with his/her name on it, make sure to enter the month and day of death in the appropriate box located on the back of the IT-40. For example, a date of death of Jan. 9, 2008, would be entered as 01/09/2008. See instructions on page 7 for more information.

Note: If the taxpayer and/or spouse died before 2008, or after Dec. 31, 2008, but before filing his or her tax return, do not enter his/her date of death in this box.

Signature Section

If this is a joint return, both you and your spouse must sign and date the tax return. Please enter your daytime telephone number so we can call you if we have any questions about your tax return. Also, enter your e-mail address if you would like us to be able to contact you by e-mail.

Signing a tax return for a deceased individual

If a joint return is filed by the surviving spouse, the surviving spouse should sign his/her name and after the signature write: “Filing as Surviving Spouse”.

If filing a return for a deceased individual, an executor or administrator appointed to the deceased’s estate must file and sign the return (even if this isn’t the final return), indicating their relationship after their signature (e.g. administrator).

If an executor or administrator has not been appointed, the person filing the return should sign and give their relationship to the deceased (e.g. “John Doe, nephew”).

Personal representative information

Typically, the Department will contact you (and your spouse, if filing jointly) if there are any questions or concerns about your tax return. If you wish to allow the Department to discuss your tax return with someone else (e.g. the person who prepared it, a relative or friend, etc.), you will need to complete this area.

First, you must check the “Yes” box, which follows the sentence, “I authorize the Department to discuss my tax return with my personal representative.” Next, enter:

  • The name of the individual you are designating as your personal representative,
  • That person’s telephone number, and
  • That person’s complete address.

If you complete this area, you are authorizing the Department to be in contact with someone other than you concerning information about this tax return. After your return is filed, the Department will communicate primarily with your designated personal representative.

Note: If you are due a refund, it will be paid to you (and your spouse, if filing jointly) even if you designate a personal representative. You may decide at any time to revoke the authorization for the Department to speak with your personal representative.

You will need to provide a signed statement indicating you revoke this authorization. Include your name, Social Security number and the year of your tax return. Mail your statement to Indiana Department of Revenue, P.O. Box 40, Indpls., IN. 46206-0040.

Paid Preparer Information

Fill out this area if a paid preparer completed this tax return.

 Note: This area needs to be completed even if the paid preparer is the same individual designated as your personal representative.

The paid preparer must provide:

  • The name and address of the firm that he/she represents,
  • His/her identification number,
  • His/her telephone number,
  • Complete address, and
  • Signature with date.

Opt-Out Designation

There are many benefits to electronic filing, which include:

  • Elimination of math errors.
  • Faster refunds.
  • Fast and free filing (with the state’s I-File program).

A new law regarding electronic filing went into effect Jan. 1, 2008. This new law requires paid preparers to electronically file all Indiana individual income-tax returns if they prepare more than 100 tax returns annually. If you use a paid preparer and do not want your tax return to be filed electronically, you must complete a state Form IN-OPT. This form requires your signature (and your spouse’s, if filing jointly), and must be maintained by your paid preparer with his or her records.

Get Form IN-OPT at www.in.gov/dor/3910.htm for more information.

Make sure you keep a copy of your completed tax return, including all required enclosures, such as W-2s and schedules.

Unresolved Problems?

 Use the taxpayer advocate As prescribed by the Taxpayer Bill of Rights, the Department has an appointed taxpayer advocate whose purpose is to facilitate the resolution of taxpayer complaints and complex tax issues. If you have a complex tax issue, you must first pursue resolution through normal channels, such as contacting the tax administration division (317-232-2240). If you are still unable to resolve your tax issue, or a tax assessment places an undue hardship on you, you may receive assistance from the Office of the Taxpayer Advocate.

For more information, and to get required schedules if filing for an offer in compromise or a hardship case, visit our Web site at: www.in.gov/dor/files/fs-oic.pdf You may also contact the Office of the Taxpayer Advocate directly at taxpayeradvocate@dor.in.gov, or by telephone at (317) 232-4692. Submit supporting information and documents to: Indiana Department of Revenue, Office of the Taxpayer Advocate, P.O. Box 6155, Indpls., IN 46206-6155.

Where to mail your tax return – use labels for envelope

You’ll find mailing labels next to the envelope enclosed in this booklet. Returns with payments enclosed have a different post office box number for mailing purposes.

If you are enclosing a payment, please mail your tax return with all enclosures to:

Indiana Department of Revenue
P.O. Box 7224
Indianapolis, IN 46207-7224

For all other filings, please mail your tax return with all enclosures to:

Indiana Department of Revenue
P.O. Box 40
Indianapolis, IN 46206-0040

Indiana Tax Help Links