Indiana Indiana Income Tax Instruction Booklet
This booklet includes instructions for filling out and filing your IT-40 income tax return.
We last updated the Indiana Income Tax Instruction Booklet in April 2016, so this is the latest version of Income Tax Instructions, fully updated for tax year 2015. You can download or print current or past-year PDFs of Income Tax Instructions directly from TaxFormFinder. You can print other Indiana tax forms here.
Extracted from PDF file 2015-indiana-income-tax-instructions.pdf, last modified November 2014
Indiana Income Tax Instruction BookletIndex begins on page 57 2 0 1 4 INDIANA IT-40 Full-Year Resident Individual Income Tax Booklet freefile.dor.in.gov FAST • FRIENDLY • FREE WAIT! YOU MAY QUALIFY FOR FREE ONLINE TAX FILING! More than 2.7 million Indiana taxpayers filed electronically in 2014. Consider the benefits of filing electronically: • Faster Refund. Electronic filing reduces errors and expedites refund time – within 10 to 14 days (compared with 10 to 12 weeks for a paper return). • Fewer Errors. Up to 20 percent of paper-filed returns have errors, which can result in delays and possible penalty and/or interest for the taxpayer. Returns filed electronically, however, are 98 percent accurate. • Easier Filing. You won’t have to complete the many complicated forms in this booklet. Instead, you go online, answer some easy questions, and before you know it your taxes are complete. You may be eligible to file your taxes online for FREE with INfreefile. Go to www.freefile.dor.in.gov to see if you qualify or learn more about INfreefile on page 4. About the cover: This year, Indiana’s tax booklets showcase some of Indiana’s 25 state parks. This cover features Spring Mill State Park. Visitors can explore the park’s four interpretive facilities—the Pioneer Village, Nature Center, Grissom Memorial, and Twin Caves Boat Tour—and see it reflected on the landscape as they hike the trails. The interpretive staff also offers a wide variety of public programs, including an extensive special events schedule. For more information, visit www.in.gov/dnr. Image courtesy of Indiana Department of Natural Resources. SP 265 (R11 / 9-14) Which Indiana Tax Form Should You File? 2014 Changes Indiana has four different individual income tax returns. Read the following to find the right one for you. Update: Line 1 of Form IT-40 assumes conformity with the Internal Revenue Code for federal changes adopted after Jan. 1, 2013. If the Indiana state legislature does not conform to the most current changes to the Internal Revenue Code, you may have to amend your return at a later date to reflect any differences between Indiana and federal law. You may wish to periodically check the department’s homepage at www.in.gov/dor/index.htm for updates. 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, You have only Indiana state and county tax withholding credits, and You do not have any interest income from a direct obligation (acquired after Jan. 1, 2012) of a state or political subdivision other than Indiana. 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 8 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. Certain Expired Federal Tax Provisions (Tax Extenders) This publication was finalized before all year-end federal legislative changes were complete. If you are reporting any tax add-backs, see information for Schedule 1: Add-Backs on page 13 for more information. Extension of Time to File Update Indiana’s extension of time to file, Form IT-9, now matches the federal extension of time to file timeline, plus 30 days. See page 8 for more information. Olympic/Paralympic Medal Winners Deduction A new deduction is available for winning a medal in the Olympic/ Paralympic games. See page 23 for more information. Natural Gas Commercial Vehicle Credit A credit is available for certain vehicles powered with natural gas (CNG or LNG) that weigh more than 33,000 pounds. See page 48 for more information. New Schedule IN-OCC Replaces, Expands Schedule INSSC See reporting instructions if claiming any of the following credits: • Hoosier Business Investment Credit • Hoosier Business Investment Credit – Logistics • Natural Gas Commercial Vehicle Credit • School Scholarship Credit Industrial Recovery Credit Pass-through entities are now eligible to claim the industrial recovery credit. See page 48 for more information. Several Offset Credits Repealed The following credits have been repealed.* • Airport Development Zone Employment Expense Credit • Airport Development Zone Investment Cost Credit • Airport Development Zone Loan Interest Credit • Capital Investment Credit • Military Base Investment Cost Credit • Military Base Recovery Cost Credit *Note. A credit may still be carried forward providing there was an unused amount available prior to it being repealed. IT-40 Booklet 2014 Page 3 The Coal Combustion Product Credit This credit is no longer available. Airport Development Zone Employee Deduction This deduction is no longer available. Same-Sex Marriage Update See Married Filing Requirements on page 5 for instructions as to how certain same-sex married couples should file with Indiana. Need Tax Forms or Information Bulletins? Use Your Personal Computer Visit our website 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 or Library Tax forms are available at district offices located throughout the state. These offices are open Monday - Friday, 8 a.m. to 4:30 p.m. Visit www.in.gov/dor/3390.htm for a list of these offices, including addresses and telephone numbers. Also, contact your library to find out if they stock any state tax forms. Need Help With Your Return? Local Help You may be eligible to 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, 1099s and a copy of last year’s state and federal tax returns. Automated Information Line Call the automated information line at (317) 233-4018 to get the status of your refund, billing and payment plan information, a copy of your tax return, or prerecorded tax topics. If you wish to check for 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. Page 4 IT-40 Booklet 2014 Internet Address If you need help deciding which form to file, or need to get information bulletins or policy directives on specific topics, visit our website 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 2.7 million Hoosier taxpayers used an electronic filing program to file their 2013 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. Use an electronic vendor or contact your tax preparer to see if he or she provides this service. INfreefile This tax season Indiana continues to offer a free tax filing service through the cooperation of the Free File Alliance. Eligible Indiana taxpayers can file both the federal and Indiana individual tax returns using highly interactive and easy-to-use web-based applications that speed both returns and refunds. Some services also offer state-only filings as well. More than 20 states will be using the INfreefile option in 2015. And, you have the selection of multiple vendors to use for this free service. The Department of Revenue estimates that nearly 1 million Indiana taxpayers will be eligible for this free service. You may be one. In fact, more than 119,000 Hoosier taxpayers used INfreefile last year and expressed a very high satisfaction rate with the service. See if you are eligible by visiting www.freefile.dor.in.gov. Our Website Our website offers tax filing options, a Spanish version of the IT-40 booklet with forms, downloadable blank forms and instructions, information bulletins, commissioner’s directives, an online helpdesk, helpful email links and a calendar with filing due dates. Visit the department’s website at www.in.gov/dor. 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 https://secure.in.gov/dor/4706.htm and change your address online. • Call the department at (317) 232-2240. Name and Suffix Please use all capital letters when entering your information. For example, Jim Smith Junior should be entered as JIM SMITH JR. Name. If your last name includes an apostrophe, do not use it. For example, enter O’Shea as OSHEA. If your name includes a hyphen, use it. For example, enter SMITH-JONES. Did you receive a lateW-2 or other kind of income statement after you filed? Did you forget to claim an exemption or deduction? If you need to amend (correct) a tax return that has already been filed, use Form IT-40X, Amended Individual Income Tax Return, located at www.in.gov/dor/5174.htm. Suffix. Enter the suffix associated with your name in the appropriate box. • Use JR for junior and SR for senior. • Numeric characters must be replaced by alphabetic Roman Numerals. For example, if your last name is Charles 3rd, do not use 3rd; instead, enter III in the suffix field. • Do not enter any titles or designations, such as M.D., Ph. D., RET., Minor or DEC’D. Public Hearing - June 18, 2015 Married Filing Requirements Filing an Amended (Corrected) Tax Return The department will hold a public hearing on June 18, 2015. The hearing will be held at 10-11 a.m. in Conference Room A of the Conference Center, Indiana Government Center South, 402 West Washington Street, Indianapolis, Ind. You may also submit your questions or comments in writing to: Indiana Department of Revenue, Commissioner’s Office, MS# 101, 100 North Senate Avenue, Indianapolis, IN, 46204. Before You Begin Important. You must complete your federal tax return first. Filling in the Boxes – Please Use Ink Only 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 Number 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. • Married Filing Jointly If you filed your federal income tax return as married filing jointly, you also must file married filing jointly with Indiana. • 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, and 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 2014 you may have qualified for and filed as ‘head of household’ on your federal income tax return. If you did, do not check the married filing separately box. Also, do not enter either your spouse’s name or Social Security number. • Same-Sex Marriage Tax Filing Guidelines Couples in same-sex marriages from states that recognize them should file with Indiana using the same married filing status as they used for federal tax filing purposes (see above). 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.gov. IT-40 Booklet 2014 Page 5 Military Address 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. Zip/Postal Code Enter your five or nine digit Zip code (do not use a dash). For example, enter 46217 or 462174540. You must 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 If filing with a foreign address, enter the associated postal code. When reporting a loss or negative entry, use a negative sign. Example. Write a $125 loss as -125. Foreign Country Code Commas Complete this area if the address you are using is located in a foreign country. Enter the 2-character foreign country code, which may be found online at www.in.gov/dor/4432.htm. School Corporation Number Enter the four-digit school corporation number (found on pages 55 and 56) for where the primary taxpayer lived on Jan. 1, 2014. 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, 2014, 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. 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, 2014. You can find these code numbers on the chart found on the back of the Schedule CT-40. See the instructions beginning on page 52 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 Required Each line on which an amount can be entered has “.00” already filledin. This is to remind you that rounding is required when completing your tax return. Page 6 IT-40 Booklet 2014 Do not use commas when entering amounts. For instance, express 1,000 as 1000. 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. 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. Also, enclose: • All W-2s and 1099s on which Indiana state and/or county tax withholding amounts appear, • Any 1099G showing unemployment compensation, • A check/money order, if applicable. A note about your W-2s. It is important that your W-2 form is readable. The income and state and county tax amounts withheld are verified on every W-2 form that comes in with your tax return. We encourage you to enclose the best copy available when you file. 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 tax return, you must file a joint tax return with Indiana. If you and your spouse file separate federal tax returns, you must file separate tax returns with Indiana. There are four types of Indiana tax 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 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 an Indiana tax return. 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 2014 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, then you should file the simplified Form IT-40EZ. If you are not eligible to file Form IT-40EZ, have any add-backs or 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 25 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 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 2014, or died after Dec. 31, 2014, 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 Schedule 7. For example, a date of death of Jan. 9, 2014, would be entered as 01/09/2014. Note. The date of death should not be entered here if the individual died after Dec. 31, 2014, but before filing the tax return. The date of death information will be shown on the individual’s 2015 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. 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. IT-40 Booklet 2014 Page 7 Military Personnel — Residency If You Owe… If you changed your legal residence (military home of record) during 2014, 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. Option 1 File Indiana’s extension of time to file, Form IT-9, and send in a payment. This must be filed by April 15, 2015, for the extension to be valid. Then, make sure to file your tax return by Nov. 16, 2015, paying any remaining balance due with that filing. While interest is due on any amount paid after April 15, penalty will be waived if both of the following conditions are met: • The remaining balance is paid in full by Nov. 16, 2015, and • You paid at least 90 percent of the tax expected to be owed by the original April 15 due date. 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 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 52 for an explanation of county of residence for military personnel. When Should You File? Your tax return is due April 15, 2015. If you file after this date, you may have to pay interest and/or penalty. See page 12 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. Extension of Time to File — What if You Can’t File on Time? You must get an extension of time to file if you: • Are required to file (your income is more than your exemptions), and • You cannot file your tax return by the April 15, 2015 due date. Whether you owe additional tax, are due a refund, or are breaking even, you still need to get an extension if filing after April 15, 2015. Note. Indiana’s extension of time to file, Form IT-9, now extends the filing date to match the federal extension of time to file date plus 30 days (to Nov. 14). Since Nov. 14 falls on a weekend in 2015, filing Form IT-9 will extend the filing date to the next business day, which is Nov. 16, 2015. Page 8 IT-40 Booklet 2014 Note. You may file for a state extension of time to file online if you make a payment with it. Access the department’s ePay system at www.in.gov/dor/4340.htm by April 15, and follow the directions for making an extension payment. Option 2 If you filed for a 6 month federal extension of time to file (Form 4868) with the IRS, you are not also required to file for a state extension (via Form IT-9 or online). Make sure to file your tax return by Nov. 16, 2015 (Indiana allows for an additional 30 days), paying any balance due with that filing. While interest is due on any amount paid after April 15, penalty will be waived if both of the following conditions are met: • The balance due is paid in full by Nov. 16, 2015, and • You paid at least 90 percent of the tax expected to be owed by the original April 15 due date. If You Don’t Owe… You’ll need to file for an extension if: • You are due a refund, or • You don’t expect to owe any tax when filing your tax return, and • You are unable to file your return by April 15, 2015. There are two ways to accomplish this: • If you have a valid federal extension, Form 4868, you automatically have an extension with Indiana and do not have to file for a separate state extension (Form IT-9). • If you do not have a valid federal extension, file Form IT-9 by April 15, 2015. Extension Filing Deadline. • Both state Form IT-9 and federal Form 4868 extend your state filing time to Nov. 16, 2015. Will You Owe Penalty and/or Interest? Interest is owed on all amounts paid after April 15, 2015. See page 12 for instructions on how to figure interest. Penalty will not be owed if you have: • Paid 90 percent of the tax you expect to owe by April 15, 2015; • Filed your tax return by Nov. 16, 2015; and • Paid any remaining amount due with that filing. Indiana’s Extension of Time to File, Form IT-9 You may get Form IT-9 online at www.in.gov/dor/5174.htm. You may also file for an extension online (if making a payment) at www.in.gov/dor/4340.htm (make sure to do this by April 15, 2015). Line 2 – Add-Backs Where to Report Your Extension Payment. Add your state extension payment to any estimated tax paid. Report the total on Schedule 5, line 3. Line 4 – Deductions 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, 2015. Military personnel in a presidentially declared combat zone have an automatic extension of 180 days after they leave the combat zone. In addition, if they are hospitalized outside the United States because 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). Form IT-40: Line-by-line instructions Important. 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 finalized. 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. 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. Enter on this line any add-backs from Schedule 1: Add-Backs. Instructions for Schedule 1 begin on page 13. Make sure to enclose Schedule 1 when filing. Enter on this line any deductions from Schedule 2: Deductions. Instructions for Schedule 2 begin on page 17. Make sure to enclose Schedule 2 when filing. Line 6 – Exemptions Enter any exemptions from Schedule 3: Exemptions on this line. Instructions for Schedule 3 begin on page 24. Make sure to enclose Schedule 3 when filing. Line 9 – County Tax Complete Schedule CT-40 to figure your county tax. Instructions for Schedule CT-40 begin on page 52. Line 10 – Other Taxes Enter any other taxes from Schedule 4: Other Taxes on this line. Instructions for Schedule 4 begin on page 25. Make sure to enclose Schedule 4 when filing. Line 12 – Credits Enter your credits from Schedule 5: Credits on this line. Instructions for Schedule 5 begin on page 26. Make sure to enclose Schedule 5 when filing. Line 13 – Offset Credits Enter the total of any offset credits reported on Schedule 6: Offset Credits on this line. Instructions for Schedule 6 begin on page 41. Make sure to enclose Schedule 6 when filing. Line 17 – Contribution to Indiana Nongame Wildlife Fund The Indiana Wildlife Diversity Program 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 the Indiana Nongame Wildlife 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 17. You can donate all or a part of your refund. Donations must be a minimum of $1. If you are not receiving a refund, When reporting a loss or negative entry, use a negative sign. Example. Write a $125 loss as -125. IT-40 Booklet 2014 Page 9 but want to support the Wildlife Diversity Section, do not change your tax return. You may make a contribution online at www.in.gov/dnr/fishwild/3316.htm. Read more about Indiana’s Wildlife Diversity Program and learn how donations have helped Indiana’s endangered wildlife at www.in.gov/dnr/fishwild/3316.htm. 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 2015 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 19 – Amount to be Applied as a 2015 Estimated Tax Installment Payment You should pay estimated tax if you expect to have income during the 2015 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. There are several ways you can make estimated tax payments. First, visit our website at www.in.gov/dor/5174.htm to get Form ES-40. Use the worksheet on Form ES-40 to see how much you will owe. Then, if you have an overpayment showing on line 18 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 worksheet, 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 Jan. 1, 2015, and you want to apply an amount to offset your spouse’s estimated county tax due (from Form ES-40 worksheet, 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 worksheet, line J). Example. Mark and Megan have a $420 overpayment, and want to apply some of it to their 2015 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; and • Line K (portion that represents county tax due) is $30. They will enter $30 on line 19a (along with their 2-digit county code), $270 on line 19c, and the $300 total amount to be applied will be entered on line 19d. They will get a $120 refund ($420 overpayment minus $300 applied to their 2015 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 19c (Indiana adjusted gross income tax amount), and carries it to line 19d. (He will pay the $470 additional amount by filing the Form ES-40.) Important. Estimated tax installment payments made for the 2015 tax year are due by April 15, 2015, June 15, 2015, Sept. 15, 2015 and Jan. 15, 2016. Any installment payment amount entered on line 19d 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, 2015, will be considered to be a 2015 first installment payment; June 3, 2015, will be considered to be a 2015 second installment payment; and July 22, 2015, will be considered to be a 2015 third installment payment. Note. If you are filing this return after Jan. 15, 2016, 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/4340.htm. See line 26 instructions on page 12 for details about payment options. See Income Tax Information Bulletin #3 at www.in.gov/dor/3650.htm for additional information about estimated taxes. Line 20 – 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 20. *You must have timely paid 100 percent of lines 8 and 9 of your 2013 IT-40 or IT-40PNR. 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 the next page. Page 10 IT-40 Booklet 2014 Important. The department will automatically figure a penalty for you if it looks like you owe a penalty for the underpayment of estimated tax, and: • You didn’t report a penalty amount on line 20, and • You didn’t enclose Schedule IT-2210 or Schedule IT-2210A showing you meet an exception to owing a penalty. Should You Use Schedule IT-2210 or Schedule IT2210A? 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 $4,500 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. Farmers and fishermen have special filing considerations. If at least two-thirds (2/3) of your gross income is from farming or fishing, Complete Schedule IT-2210, using the Section D Short Method. 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, 2014 first installment due date. Line 21 – Refund You have a refund if line 18 is greater than the combined amounts entered on lines 19d and 20. Important. If the combination of line 19d plus line 20 is greater than the amount on line 18, you must make an adjustment. The estimated tax carryover amount on line 19d is limited; it cannot be greater than the remainder of line 18 minus line 20. See the second example about Stu under the Line 19 instructions on page 10. 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. When to Expect Your Refund Generally, 10 to 14 days is the average wait for a refund if the tax return is electronically filed; it can take up to 10 to 12 weeks for the refund to be issued if you mail in your tax return. Where’s Your Refund? There are several ways to check the status of your refund. You will need to know the exact amount of your refund, and a Social Security number entered on your tax return. Then, do one of the following: • Go to www.in.gov/dor/4339.htm and click Check the Status of Your Refund. • Call (317) 233-4018 for automated refund information. • Call (317) 232-2240 from 8 a.m. to 4:30 p.m. Monday - Friday, and a representative will help you. Example. Rachael received a sizeable lump sum distribution in Dec. of 2014. She figured how much estimated tax was due, and paid it by the Jan. 15, 2015, 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. 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. Farmers and Fishermen. Special options are available if more than two-thirds of your gross income for 2013 and/or 2014 was from farming or fishing. Important. If we are unable to deposit your refund to the listed account (incorrect/incomplete account numbers; account closed; refund to go to an account outside the United States; etc.), the department will mail a paper check to the address on the front of the tax form. Option 1. Pay your estimated tax in one payment on or before Jan. 15, 2015, and file your tax return by April 15, 2015; or Option 2. Make no estimated tax payment and file your tax return and pay all the tax due by March 2, 2015. Note. A refund deposited directly to your Hoosier MasterCard account will appear on your monthly statement. Example. More than two-thirds of Henry’s gross income is from farming. He should complete Schedule IT-2210 (not Schedule IT-2210A). He will be able to use the Section D Short Method to figure his penalty or to show he meets an exception to owing a penalty. Visit our website at www.in.gov/dor/5174.htm to get Schedule IT-2210 or IT-2210A. IT-40 Booklet 2014 Page 11 Statute of Limitations for Refund Claims There is a statute of limitations when filing for a refund. In general, when filing your 2014 tax return, a claim for refund of excess withholding credits must be made no later than April 18, 2017. A claim for refund of all other excess payments and refundable credits must be made by April 17, 2018. (The claim is considered to be made on the day your tax return is postmarked.) If you file your 2014 tax return after the statute of limitations has expired, no refund will be issued. Line 22 – 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 22 a, b, c and d. Caution. If you choose this option, make sure to verify the account information after you’ve entered it. This will help ensure your refund is deposited into your desired account. 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. To comply with banking rules, you must place an X in the box on line d if your refund is going to an account outside the United States. If you check the box, we will mail you a paper check. 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 22b, where it says “Account Number” (do not write anything on line 22a “Routing Number”). You can find your 12-digit 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 22c. For more information on direct deposit, please see “Where’s Your Refund?” on page 11. Line 23 If line 21 is less than zero, you have an amount due. Enter here as a positive number and skip to line 24. OR If line 15 is greater than line 14, complete the following steps: Subtract line 14 from line 15 and enter the total here A __________ Enter any amount from line 20 B __________ Add lines A + B. Enter total here and on line 23 C __________ Line 24 – Penalty You may owe a penalty if your tax return is filed after the April 15, 2015, due date and you have an amount due. Penalty is 10 percent (.10) of the amount due (line 23 minus line 20) or $5, whichever is greater. Exception. No penalty will be due if you have: • An extension of time to file; • Are filing and paying the remaining tax due by the extended filing due date, and • Have prepaid at least 90 percent of the amount due by April 15, 2015. Line 25 – Interest You will owe interest (even if you have a valid extension of time to file) if your tax return is filed after the April 15, 2015 due date and you have an amount due. Interest should be figured on the sum of line 23 minus line 20. Contact the department at (317) 232-2240 or visit our website at www.in.gov/dor/3618.htm to get Departmental Notice #3 for the current interest rate. Line 26 – Amount Due – Payment Options There are several ways to pay the amount you owe. Make your check, money order or cashier’s 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 electronic 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/4340.htm 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 (1-800-2729829). Or, log on to www.in.gov/dor/4340.htm and use your Discover® Card, MasterCard® or VISA® to make a payment. Page 12 IT-40 Booklet 2014 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. Payment plan option. If you cannot pay the full amount due at the time you file, you may be eligible to set up a payment plan online. After you get a tax bill, log on to www.intaxpay.in.gov and select the Individual Eligibility tab. Important. If using the payment plan option, penalty and interest will be due on all amounts paid after the April 15, 2015 due date. 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 within 10 days after the notice was mailed, the penalty is increased to 30 percent multiplied by the value of the check, credit card, debit card, or electronic funds transfer, or 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. Signatures and Signing Dates First, read the Authorization area on Schedule 7. Then, sign and date the tax return. If this is a jointly filed tax return, both you and your spouse must sign and date it. Make sure to enclose the completed Schedule 7 when filing. 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. Where to Mail Your Tax Return – Use Labels for Envelope You’ll find mailing labels with 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 Envelope – Don’t Forget the Stamp! Make sure to put a stamp(s) on the envelope. The U.S. Post Office will not deliver your tax return without the proper postage. Schedule 1: Add-Backs Some amounts reported on your federal tax return may require different treatment for Indiana income tax purposes. Listed in this area are those items that may need to be added back on your Indiana tax return. Please review the list carefully. When reporting these addbacks, maintain with your records the corresponding federal tax forms and schedules as the department can require you to provide them at a later date. Important Information About Possible Year-End Federal Legislation This publication was finalized before all year-end federal legislative changes were complete. Therefore, some of these add-backs may need to be adjusted. For example, while the exclusion for the discharge of debt of a principal residence was scheduled to end (sunset) in 2013, the exclusion may have been extended for federal income tax purposes. If the discharge of debt of a principal residence exclusion was not extended for 2014 federal income tax purposes, then there will be nothing to add back on your Indiana tax return. You may wish to periodically check the department’s homepage at www.in.gov/dor/ for updates about any impact of late federal legislation. For more information, and to get required schedules if filing for an offer in compromise or a hardship case, visit our website at: www.in.gov/dor/3883.htm. You may also contact the Office of the Taxpayer Advocate directly at [email protected], 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, Indianapolis, IN 46206-6155. IT-40 Booklet 2014 Page 13 Treatment of Previously Discontinued Add-Back. Several discontinued add-backs were created as a result of timing differences between federal and Indiana allowable expenses. See Certain Discontinued Add-Backs: How and When to Report a Difference on page 16 for information about these add-backs. Line 1 – 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 2 – 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 2, 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 2014 federal Form 1040, then leave this line blank. Line 3 – 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 4 – Domestic Production Activities Add-Back If you claimed a domestic production activities deduction on your federal Form 1040, line 35, enter that amount here. Page 14 IT-40 Booklet 2014 Line 5 – Bonus Depreciation Add-Back 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) that 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 5. 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 5. For additional information see Commissioner’s Directive #19 at www.in.gov/dor/3617.htm. Line 6 – Section 179 Expense Add-Back You may have figured an IRC Section 179 expense using a ceiling of more than $25,000 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 7 – Other Add-Backs Each of the following add-backs has been assigned a 3-digit code number. When reporting the add-back, write its name, the associated 3-digit number and the amount. Certain Trade or Business Deductions Based on Employment of Unauthorized Alien 132 Add the amount of any trade or business deductions allowed under the Internal Revenue Code for wages, reimbursements, or other payments made for services provided in Indiana by an individual for services as an employee, if the individual was, during the period of service, prohibited from being hired as an employee under 8 U.S.C. 1324a. Important. This add-back requirement does not apply to payments made for services provided to a business that was enrolled and participated in the E-Verify program (as defined in IC 22-5-1.7-3) during the time the taxpayer conducted business in Indiana in the taxable year. Enter code 132 on Schedule 1 under line 7 if reporting this add-back. Deferral of Business Indebtedness Discharge and Reacquisition Add-Back 107 Add an amount equal to any income not included as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition of a debt instrument (as provided in Section 108(i) of the IRC). Subtract the amount added to income in a previous year to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after Dec. 31, 2008, and before Jan. 1, 2011, of an applicable debt instrument. Enter code 107 on Schedule 1 under line 7 if reporting this add-back. Discharge of Debt of a Principal Residence Add-Back 117 You may have to add back some or all of the amount of debt not reported on your federal tax return due to the discharge of indebtedness of your principal residence (mortgage forgiveness).* The amount of discharge of indebtedness of your principal residence to be added back can be found on: • federal Form 1099-C (or its equivalent), Box 2, and/or • federal Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). If Part 1 Line 1e is checked on Form 982, then the amount on Part 1 Line 2 from the discharge of qualified principal residence indebtedness must be added back if you were an Indiana resident on the date the debt was discharged (1099C, Box 1). Note. No add back is required if the discharge of indebtedness of your principal residence was included in a bankruptcy. Maintain with your records both federal Form 1099C and Form 982 as the department can require you to provide this information at a later date. Enter code 117 on Schedule 1 under line 7 if reporting this add-back. *Important. This publication was finalized before all year-end federal legislative changes were complete. While the exclusion for the discharge of debt of a principal residence was scheduled to end (sunset), it may have been extended for federal income tax purposes. If this exclusion was not extended for 2014 federal income tax purposes, then do not add this amount back. You may wish to periodically check the department’s homepage at www.in.gov/dor/ for updates about any impact of late federal legislation. OOS Municipal Obligation Interest Add-Back 137 Interest earned from a direct obligation of a state or political subdivision other than Indiana (out of state, or OOS) is taxable by Indiana if the obligation is acquired after Dec. 31, 2011. Interest earned from obligations held or acquired before Jan. 1, 2012, is not subject to Indiana income tax and should not be reported as an add back. Note. Interest earned from obligations of Puerto Rico, Guam, Virgin Islands, American Samoa, or Northern Mariana is not included in federal gross income and is exempt under federal law. There is no addback for interest earned on these obligations. For more information about this add-back, see Income Tax Information Bulletin #19 at www.in.gov/dor/3650.htm. Enter code 137 on Schedule 1 under line 7 if reporting this add-back. Other (Current Year Conformity) Add-Back 120 Before this publication was finalized Indiana had not conformed to any changes to the Internal Revenue Code (IRC) that may have become law after Jan. 1, 2013. Therefore, the IRC used to figure Indiana income may not be the same as the IRC used to figure federal income. This add-back is specific to these annual current year conformity issues. If uncertainty exists as to whether or not Indiana will adopt some or all of the federal legislation passed during 2013 and 2014 that acts to modify federal AGI, you may add-back those items as an “other” add-back. In the event those items are adopted, an amended return should be filed to recoup the add-back(s). All entries marked as “other” must be reported as a positive amount on the original tax return. Negative entries will not be allowed. This add-back is only for current year conformity issues. Conformity issues for preceding tax years must be addressed on the add-back line specific to the item in question. For instance, an add-back for the qualified disaster assistance property was first added-back on the 2009 Schedule 1, line 12. The adjustment going forward should be reported on the 2014 Schedule 1, line 7, using the 3-digit code 110. If the state legislature does not conform to federal code changes enacted after January 1, 2013, you may have to amend your return at a later date to reflect any differences between Indiana and federal law. You may wish to periodically check the department’s homepage at www.in.gov/dor for updates. Enter code 120 on Schedule 1 under line 7 if reporting this add-back. IT-40 Booklet 2014 Page 15 Qualified Disaster Assistance Property Add-Back 110 If you claimed the special allowance for qualified disaster assistance property under Section 168(n) of the IRC, add the amount necessary to make your adjusted gross income (AGI) equal to the amount of AGI that would have been computed had the special allowance not been claimed for the property. Enter code 110 on Schedule 1 under line 7 if reporting this add-back. Qualified Film or Television Production Add-Back 112 If you made an election under Section 181 of the IRC to expense costs for a qualified film or television production tax purposes, add the amount necessary to make your adjusted gross income (AGI) equal to the amount of AGI that would have been computed had the election not been made for that year. Enter code 112 on Schedule 1 under line 7 if reporting this add-back. Qualified Preferred Stock Add-Back 113 You may have had a loss from the sale or exchange of preferred stock in: • The Federal National Mortgage Association, established under the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.), or • The Federal Home Loan Mortgage Corporation, established under the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.). If you treated this as an ordinary loss under Section 301 of the Emergency Economic Stabilization Act of 2008 in the current taxable year or in an earlier taxable year, add an amount equal to the amount of adjusted gross income that would have been computed had the loss not been treated as an ordinary loss. Enter code 113 on Schedule 1 under line 7 if reporting this add-back. Qualified Refinery Property Add-Back 111 If you made an election under Section 179C of the IRC to expense costs for qualified refinery property, add the amount necessary to make your adjusted gross income (AGI) equal to the amount of AGI that would have been computed had the election not been made for that year. Enter code 111 on Schedule 1 under line 7 if reporting this add-back. Certain Discontinued Add-Backs: How and When to Report a Final Catch-Up Modification. Required add-backs for the following modifications have been eliminated, effective Jan. 1, 2013: • • Motorsports Entertainment Complex, Code 130 Qualified Advance Mining Safety Equipment, Code 126 Page 16 IT-40 Booklet 2014 • • • • • • Qualified Electric Utility Amortization, Code 135 Qualified Environmental Remediation Costs, Code 121 Qualified Leasehold Improvement Property, Code 129 Qualified Restaurant Improvement Property, Code 108 Qualified Retail Improvement Property, Code 109 Start-Up Expenditures, Code 131 If you previously reported any of these add-backs, see the following example for guidance as to how to figure and report a final catch-up modification. Example. Grant has qualified restaurant equipment. For federal tax purposes he used the accelerated 15-year recovery period for an asset placed in service since 2009. Since 2009 Grant had been adding back the depreciation expense taken for federal purposes that exceeded the amount allowable for Indiana purposes. The accumulated depreciation on such an asset through 2012 was, therefore, different for federal and state purposes. This difference will remain until the a
Income Tax Instructions
More about the Indiana Income Tax Instructions Individual Income Tax Estimated TY 2015
Other Indiana Individual Income Tax Forms:
|Form Code||Form Name|
|IT-40 Form||IT-40 Income Tax Form|
|Form CT-40||County Tax Schedule for Indiana Residents|
|IT-40EZ Form||IT-40EZ Income Tax Form|
Indiana usually releases forms for the current tax year between January and April. We last updated Indiana Income Tax Instructions from the Department of Revenue in April 2016.
Income Tax Instructions is an Indiana Individual Income Tax form. While most taxpayers have income taxes automatically withheld every pay period by their employer, taxpayers who earn money that is not subject to withholding (such as self employed income, investment returns, etc) are often required to make estimated tax payments on a quarterly basis. Failure to make correct estimated payments can result in interest or penalties.
About the Individual Income Tax
The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.
Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!
While we do our best to keep our list of Indiana Income Tax Forms up to date and complete, we cannot be held liable for errors or omissions. Is the form on this page out-of-date or not working? Please let us know and we will fix it ASAP.