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INDIANA 2 02 2 IT-40PNR Part-Year and Full-Year Nonresident Individual Income Tax Booklet freefile.dor.in.gov FAST • FRIENDLY • FREE
Enlarge image | INDIANA 2 02 2 IT-40PNR Part-Year and Full-Year Nonresident Individual Income Tax Booklet freefile.dor.in.gov FAST • FRIENDLY • FREE |
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WAIT!
YOU MAY QUALIFY FOR FREE ONLINE TAX FILING!
More than 85 percent of Indiana taxpayers filed electronically in 2021. 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.in.gov/dor/individual-income-taxes/
infreefile to see if you qualify or learn more about INfreefile on page 4.
SP 258
(R23 / 12-22)
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Which Indiana Tax Form Should You File? • A new credit (869) is available for qualified film and media
productions. See page 46 for more information.
Indiana has three different individual income tax returns. Read the • The Adoption Credit has been increased to 20% of the federal
following to find the right one for you to file. adoption credit or $2,500 per eligible child, whichever is less.
Also, there is a $2,500 cap per eligible child if the credit is claimed
Form IT-40 for Full-Year Residents over multiple years. In addition, the adoption credit is now a
Use Form IT-40 if you (and your spouse, if married filing jointly) were refundable credit. See page 37 for further information.
full-year Indiana residents. • Beginning in 2022, the Headquarters Relocation Credit (818)
must be reported on Schedule IN-OCC.
Form IT-40PNR for Part-Year and Full-Year • School Scholarship Tax Credit Contribution ceiling increased.
Nonresidents The total of allowable net contributions to the program has
Use Form IT-40PNR if you (and your spouse, if married filing jointly): increased to $18.5 million for the program’s fiscal year of July 1,
• Were Indiana residents for less than a full-year or not at all, or 2022 through June 30, 2023.
• Are filing jointly and one was a full-year Indiana resident and the • Automatic Taxpayer Refund. A $200 per individual automatic
other was not a full-year Indiana resident, and taxpayer refund is available for certain taxpayers who did not
• Do not qualify to file Form IT-40RNR. qualify for the automatic taxpayer refunds issued during 2022.
Please see page 38 for additional information.
Form IT-40RNR for Full-Year Residents of Reciprocal
States Deductions
Use Form IT-40RNR if you (and your spouse, if married filing jointly) • A new deduction (635) is available for amounts paid from
were: Indiana education scholarship accounts for qualifying expenses,
• Full-year residents of Kentucky, Michigan, Ohio, Pennsylvania or but only to the extent the payment is included in federal gross
Wisconsin, and income. See page 25 for more information.
• The only type of income from Indiana was from wage, tip, salary • A new deduction (637) is available to report student loan interest
or other compensation.* payments to the extent the interest was paid by your employer and
required to be added back to Indiana adjusted gross income. See
*You are required to file Form IT-40PNR if you have any other kind of page 24 for more information.
Indiana-source income. • A new deduction (638) is available for amounts paid from
Indiana enrichment scholarship accounts for qualifying expenses,
Note. If you have income that is being taxed by both Indiana and but only to the extent the payment is included in federal gross
another state, you may have to file a tax return with the other state. income. See page 25 for more information.
• For 2022, the COVID-related Employee Retention Credit
Military Personnel Disallowed Expenses Deduction (634) is limited to certain cases.
See the instructions on page 7 to determine which form to file. See page 24 for more information.
Military personnel stationed in a combat zone should see the
instructions on page 7 for extension of time to file procedures. Exemptions
• A new $3,000 exemption is available for qualifying adopted
children. See page 28 for more information.
• A new Schedule IN-DEP-A has been created to report any
2022 Changes qualifying adopted children for purposes of claiming the adopted
child exemption. See page 31 for more information.
Update. Line 36A of Form IT-40PNR, Schedule A, assumes conformity
with the Internal Revenue Code of 1986, as amended and in effect
Miscellaneous
on March 31, 2021. If the 2023 Indiana General Assembly does not • A new Schedule IN-W is available to report taxes withheld on
conform to the most current changes to the Internal Revenue Code,
your behalf (and your spouse, if married filing jointly).
you may have to amend your tax return at a later date to reflect
any differences between Indiana and federal law. You may wish to
periodically check DOR’s homepage at www.in.gov/dor for updates.
Need Tax Forms or Information Bulletins?
Add-backs
• The Student Loan Discharge Add-Back (150) rules have been Use Your Personal Computer
adjusted. See page 18 for more information. Visit our website and download the forms you need. Our address for
tax forms is www.in.gov/dor/tax-forms.
Credits
• A new credit (867) is available for qualifying donations to
approved foster care organizations. See page 46 for more
details.
• A new credit (868) is available for the venture capital investment
credit for amounts provided to a Qualified Indiana Investment
Fund. See page 50 for more information.
IT-40PNR Booklet 2022 Page 3
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links and a calendar with filing due dates. Visit DOR’s website at www.
in.gov/dor.
Need Help With Your Return?
Local Help Moving?
You may be eligible to take advantage of the IRS Volunteer Return Notify DOR if you move to a new address after filing your tax return,
Preparation Program (VRPP). This program offers free tax return Change your address with us by doing one of the following:
help to low income, elderly and special needs individuals. Volunteers • Use DOR’s e-services portal, the Indiana Taxpayer Information
will fill out federal and state forms for those who qualify. Call the IRS Management Engine (INTIME), to change your address at intime.
at 1-800-829-1040 to find the nearest VRPP location. Be sure to take dor.in.gov. INTIME offers customers the ability to manage their
your W-2s and 1099s with you. tax account(s) in one convenient location, 24/7.
You can change your address by creating an INTIME log on. Once
Information Line logged in, go to the “All Actions” tab and locate the “Update Name
Call the information line at (317) 232-2240 to get the status of your and Addresses” panel and select the “Addresses” tab.
refund, billing and payment plan information, a copy of your tax An INTIME User Guide for Individual Income Tax Customers is
return, or prerecorded tax topics. If you wish to check for billing available at www.in.gov/dor/files/intime-individual-guide.pdf to
information, be sure to have a copy of your tax notice. The system will help you through the process.
ask you to enter the tax identification number shown on the notice. To • Fax your request, including your Social Security number, old
speak to a representative, please call during regular business hours, 8 address, new address and signature, to 317-615-2608.
a.m. to 4:30 p.m., Monday - Friday. • Mail the request, including your Social Security number, old
address, new address and signature, to Indiana Department of
Internet Address Revenue, P.O. Box 6197, Indianapolis, IN 46206-6197.
If you need help deciding which form to file, or need to get information • Visit one of our District Offices (find locations here: www.in.gov/dor/
bulletins or policy directives on specific topics, visit our website at www. contact-us/district-office-contact-info) in person. Make sure to bring
in.gov/dor. your Social Security number, old address, and new address with you.
Telephone Filing an Amended (Corrected) Tax Return
Call us at (317) 232-2240 Monday - Friday, 8 a.m. to 4:30 p.m., for help If you need to amend (correct) your 2022 individual income tax return
with basic tax questions. after you initially filed:
• Prepare another IT-40 PNR return that reflects all changes and
check the “Amended” box on the front page. Failure to do so can
delay processing.
Ready to File Your Return? • Attach a copy of all required schedules reflecting all changes and
documentation. Failure to do so can delay processing.
Use an Electronic Filing Program • File the amended return electronically, if possible.
More than 85% of Hoosier taxpayers used an electronic filing program
to file their 2021 state and federal individual income tax returns. Note. All amounts previously paid should be reported as an estimated
Electronic filing provides Indiana taxpayers the opportunity to file their payment. All refunds previously received should not be reported on an
federal and state tax returns immediately, and receive their Indiana amended filing.
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 If you are filing an amended return for 2022 reporting additional tax and
directly into your bank account. Even if there is an amount due on you previously received a refund, the department will issue either a notice
either return, Indiana taxpayers can still file electronically and feel of proposed assessment or demand for payment to request repayment of
comfortable knowing that the returns were received by the IRS and the the refund plus interest and penalty.
Indiana Department of Revenue (DOR). Use an electronic vendor or
contact your tax preparer to see if he or she provides this service. The Form IT-40PNR and supporting schedules are located at www.
in.gov/dor/tax-forms/2022-individual-income-tax-forms. For prior
INfreefile years, please see the instructions for that year.
This tax season Indiana continues to offer a free tax filing service
through the cooperation of the Free File Alliance. Eligible Indiana Annual Public Hearing
taxpayers can file both the federal and Indiana individual tax returns In accordance with the Indiana Taxpayer Bill of Rights, DOR will
using highly interactive and easy-to-use web-based applications that conduct an annual public hearing in Indianapolis in June 2023. Event
speed both returns and refunds. You can choose from a list of multiple details will be listed at www.in.gov/dor/news-media-and-publications/
vendors that provide this free service. DOR estimates nearly 2 million dor-public-events/annual-public-hearings. Please come and share
Indiana taxpayers are eligible for this free service. See if you are feedback or comments about how DOR can better administer Indiana
eligible by visiting www.in.gov/dor/individual-income-taxes/infreefile. tax laws. If not able to attend, please submit feedback or comments in
writing to: Indiana Department of Revenue, Commissioner’s Office,
Our Website MS# 101, 100 N. Senate Avenue, Indianapolis, IN 46204. Our homepage
Our website offers tax filing options, downloadable blank forms and provides access to forms, information bulletins and directives, tax
instructions, information bulletins, an online helpdesk, helpful email publications, email, and various filing options. Visit www.in.gov/dor.
Page 4 IT-40PNR Booklet 2022
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• Married Persons Who Live Apart Filing Status
If you were not divorced or legally separated during the tax year
Before You Begin
you may have qualified for and filed as ‘head of household’ on
Important. You must complete your federal tax return first. your federal income tax return. If you did, do not check the
married filing separately box. Also, do not enter either your
Filling in the Boxes – Please Use Ink spouse’s name or Social Security number.
If you are filling out the form by hand, please use black or blue ink and
print your letters and numbers neatly within each box. If you do not Military Address
have an entry for a particular line, leave it blank. Do not use dashes, Overseas military addresses must contain the APO, FPO designation
zeros or other symbols to indicate that you have no entry for that line. 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
Social Security Number designations in the city name area.
Be sure to enter your full 9-digit Social Security number in the boxes
at the top of the form. If filing a joint return, enter your Social Security ZIP/Postal Code
number in the first set of boxes and your spouse’s full 9-digit Social Enter your five- or nine-digit ZIP code (do not use a dash). For
Security number in the second set of boxes. An incorrect or missing example, enter 46217 or 462174540. If filing with a foreign address,
Social Security number can increase your tax due, reduce your refund, enter the associated postal code.
or delay timely processing of your filing.
Foreign Country Code
Individual Taxpayer Identification Number (ITIN) Complete this area if the address you are using is located in a foreign
If you already have an ITIN, enter it wherever your Social Security country. Enter the 2-character foreign country code, which may be
number is requested on your tax return. If you are in the process of found online at www.in.gov/dor/legal-resources/tax-library/foreign-
applying for an ITIN, check the box located directly beneath the Social country-code-listing.
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 County Information
Form W-7, or find it online at www.irs.gov. Enter the two-digit code numbers for the county(s) where you and
your spouse, if filing jointly, lived and worked on Jan. 1, 2022. You
Name and Suffix can find these code numbers on the chart found on the back of
Please use all capital letters when entering your information. For Schedule CT-40PNR. See the instructions beginning on page 51
example, Jim Smith Junior should be entered as JIM SMITH JR. for more information, including the definitions of the county where
you live and work, details for military personnel, retired individuals,
Name. If your last name includes an apostrophe, do not use it. For homemakers, unemployed individuals, out-of-state filers, etc.
example, enter O’Shea as OSHEA. If your name includes a hyphen, use
it. For example, enter SMITH-JONES. Refund Check Address
Your refund check will be issued in the name(s), address and Social
Suffix. Enter the suffix associated with your name in the appropriate box. Security number(s) shown on your tax return. It is very important that
• Use JR for junior and SR for senior. this information is correct and legible. Any wrong information will
• Numeric characters must be replaced by alphabetic Roman delay your refund.
Numerals. For example, if your last name is Charles 3rd, do not
use 3rd; instead, enter III in the suffix field. Rounding Required
• Do not enter any titles or designations, such as M.D., Ph. D., RET., Each line on which an amount can be entered has “.00” already filled
Minor or DEC’D. in. This is to let you know that rounding is required when completing
your tax return.
Married Filing Requirements
• Married Filing Jointly You must round your amounts to the nearest whole dollar.
If you filed your federal income tax return as married filing
jointly, you also must file married filing jointly with Indiana. To do this, drop amounts of less than $0.50.
Example. $432.49 rounds down to $432.00.
• Married Filing Separately
If you file your federal income tax return as married filing separately, Increase amounts of $0.50 or more to the next higher dollar.
you must also file as married filing separately with Indiana. Enter Example. $432.50 rounds up to $433.00.
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. Losses or Negative Entries
Enter the name of the person filing the return on the top line, but When reporting a loss or negative entry, use a negative sign.
do not enter the spouse’s name on the second name line. Example. Write a $125 loss as -125.
IT-40PNR Booklet 2022 Page 5
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Commas If you were a legal resident of another state(s) (exception: see next
Do not use commas when entering amounts. For instance, express paragraph) and had income from Indiana (except certain interest,
1,000 as 1000. dividends, or retirement income), you must file Form IT-40PNR.
Enclosing Schedules, W-2s, IN K-1s, Etc. Full-Year Residents of Kentucky, Michigan, Ohio,
You will find an enclosure sequence number in the upper right-hand Pennsylvania or Wisconsin
corner of each schedule. Make sure to put your completed schedules If you were a full-year resident of Kentucky, Michigan, Ohio,
in sequential order behind the IT-40PNR when assembling your tax Pennsylvania or Wisconsin, and your only income from Indiana was
return. Do not staple or paper clip your enclosures. If you have a from wages, salaries, tips or commissions, then you need to file Form IT-
schedule on which you’ve made no entry, do not enclose it unless you 40RNR, Indiana Reciprocal Nonresident Individual Income Tax Return.
have completed information on the back of it.
Full-Year Residents
Also, enclose: Full-year residents must file Form IT-40, Indiana Full-Year Resident
• All W-2s, 1099s, Forms IN-MSID-A and IN K-1s on which Individual Income Tax.
Indiana state and/or county tax withholding amounts appear
• All 1099Gs showing unemployment compensation You are a full-year Indiana resident if you maintain your legal residence
• A check/money order, if applicable 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
A note about your W-2s. It is important that your W-2 form is resident. Residents, including military personnel, who leave Indiana for
readable. The income and state and county tax amounts withheld are a temporary stay, are considered residents during their absence.
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. Retired persons spending the winter months in another state may still
be full-year residents if:
A note about the $200 additional taxpayer refund. • They maintain their legal residence in Indiana and intend to
If you or your spouse (if married filing jointly): return to Indiana during part of the taxable year
• are claiming the $200 additional taxpayer refund on you or your • They retain their Indiana driver’s license
spouse’s behalf, and • They retain their Indiana voting rights
• the individual for whom the credit is being claimed received any • They claim a homestead deduction on their Indiana home for
Social Security benefits other than Supplemental Security income property tax purposes
(SSI),
the Form SSA-1099 for that individual must be attached to the return. If you were a full-year resident of Indiana and your gross income (the
total of all your income before deductions) was greater than certain
• If the individual for whom the credit is being claimed received exemptions*, you must file Indiana Form IT-40.
only SSI, you must attach a benefits verification letter
• See the instructions for Schedule F, Line 11 on page 38 for * To figure your exemptions for filing requirement purposes, Indiana
special instructions related to electronically-filed returns. allows a $1,000 exemption for you and a $1,000 exemption for your
spouse (if married filing jointly). You also get a $1,000 exemption
for each dependent you are eligible to claim. See instructions
beginning on page 28 for additional information concerning how
Who Should File?
You may need to file an Indiana income tax return if: to figure your dependents. If your gross income is less than your total
• You lived in Indiana and received income, or exemptions figured above, you are not required to file. However, you
• You lived outside Indiana and had any income from Indiana. 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
Filing Status Requirement. If you and your spouse file a joint federal earned income credit or estimated tax payment.
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 Deceased Taxpayers
returns with Indiana. If an individual died during 2022, or died after Dec. 31, 2022, but
before filing his/her tax return, the executor, administrator or
Note. There are three types of Indiana tax returns available. The type you surviving spouse must file a tax return for the individual if:
need to file is generally based on your residency status. Read the following • The deceased was under the age of 65 and had gross income more
to decide if you are a full-year resident, part-year resident, or nonresident than $1,000
of Indiana, and which type of return you should file. In addition, if you • The deceased was age 65 or older and had gross income more
filed Schedule IN-COMPA, you must file an Indiana tax return. than $2,000, or
• The deceased was a nonresident and had gross income from
Indiana.
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 Be sure to enter the month and day of death for the taxpayer or spouse
or Nonresident Individual Income Tax Return. in the appropriate box located on Schedule H. For example, a date of
death of Jan. 9, 2022, would be entered as 01/09/2022.
Page 6 IT-40PNR Booklet 2022
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Note. The date of death should not be entered here if the individual
died after Dec. 31, 2022, but before filing the tax return. The date of
When Should You File?
death information will be shown on the individual’s 2023 tax return. Your tax return is due April 18, 2023. If you file after this date and owe
tax, you will owe interest on the unpaid amount and you may owe
Signing the Deceased Individual’s Tax Return penalty, too. See page 11 for more information.
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 Fiscal year tax returns are due by the fifteenth (15) day of the fourth
as Surviving Spouse.” (4th) month after the close of the fiscal year. You must complete the
fiscal year filing period information at the top of the form.
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 Extension of Time to File — What if You Can’t File on
their relationship after their signature (e.g. administrator). Time?
You must get an extension of time to file if you:
If there is no executor, or if an administrator has not been appointed, • Are required to file, and
the person filing the return should sign and give their relationship to • You cannot file your tax return by the April 18, 2023 due date.
the deceased (e.g. “John Doe, nephew”). Only one tax return should be
filed on behalf of the deceased. Whether you owe additional tax, are due a refund, or are breaking
even, you still need to get an extension if filing after April 18, 2023.
Note. DOR may ask for a copy of the death certificate, so please keep a
copy with your records. Note. Indiana’s Application for Extension of Time to File, Form IT-9,
extends the filing date to Nov. 15, 2023.
Refund Check for a Deceased Individual
If you (the surviving spouse, administrator, executor or other) have If You Owe…
received a refund check and cannot cash it, contact the State Auditor’s
Office at www.in.gov/auditor/contact-us to get a widow’s affidavit Option 1. File Indiana’s Application for Extension of Time to File,
(POA-30) or a distributee’s affidavit (POA-20). Send the completed Form IT-9. This must be filed by April 18, 2023, for the extension
affidavit, the refund check and a copy of the death certificate to the request to be valid.
State Auditor’s Office so a refund check can be issued to you.
Note. You may file Indiana’s Application for Extension of Time to File
Military Personnel — Residency online if you make a payment with it by April 18, 2023.
If you were an Indiana resident when you enlisted, you remain an Pay electronically using DOR’s e-services portal, the Indiana Taxpayer
Indiana resident no matter where you are stationed. You must report Information Management Engine (INTIME), by visiting intime.dor.
all your income to Indiana. in.gov. INTIME offers customers the ability to manage their accounts
in one convenient location, 24/7.
If you changed your legal residence (military home of record) during
the tax year, you are a part-year resident and should file Form Option 2. Filing for a federal application for extension of time to file
IT-40PNR. You must also enclose a copy of Military Form DD-2058 with the IRS will automatically provide for a state extension of time to
with the tax return. As an Indiana part-year resident you will be taxed file. You must file your state tax return by Nov. 15, 2023, paying any
on the income you earned while you were a resident of Indiana, plus balance due with that filing.
any income from Indiana sources.
While interest is due on any amount paid after the original April 18 due
If you are stationed in Indiana and you are a resident of another state, date, penalty will be waived if both of the following conditions are met:
you won’t need to file with Indiana unless you have non-military • The remaining balance due is paid in full by Nov. 15, 2023, and
income from Indiana sources. • You paid at least 90% of the tax expected to be owed by the
original April 18 due date.
Example. Annie, who is a Kansas resident, is stationed in Indiana. She
earned $1,300 from her Indiana part-time job. She will need to report If You Don’t Owe…
that income to Indiana on Form IT-40PNR.
You’ll need to file for an extension if:
If you are a full-year Indiana resident in the military, your spouse is a • You are due a refund, or
legal resident of another state and you filed a joint federal return, you • You don’t expect to owe any tax when filing your tax return, and
will need to file Form IT-40PNR. • You are unable to file your return by April 18, 2023.
Important. Refer to the instructions on page 52 for an explanation There are two ways to accomplish this:
of county of residence for military personnel. • If you have a federal extension (you filed Form 4868, or made
an extension payment via an electronic filing method), 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 federal extension, file Form IT-9 by April 18, 2023.
IT-40PNR Booklet 2022 Page 7
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Extension Filing Deadline. processes and formulas, goodwill, trademarks, trade brands,
Both state Form IT-9 and federal Form 4868 extend your state filing franchises, and other property where earnings are a part of an
time to Nov. 15, 2023. Indiana business;
7. Income from trusts and estates derived from Indiana sources and
Will You Owe Penalty and/or Interest? distributed to nonresident heirs; and
Penalty will not be owed if you have: 8. Pensions and most interest and dividends are taxed by your state
• Paid 90% of the tax you expect to owe by April 18, 2023, of residence when you receive them.
• Filed your tax return by Nov. 15, 2023, and
• Paid any remaining amount due (including interest) with that filing. Note. If you were a full-year nonresident and your only income from
Indiana sources was from pensions, interest and/or dividends (which
Interest is owed on all amounts paid after April 18, 2023. See page were not a basic part of the business in Indiana) and/or unemployment
11 for instructions on how to figure interest. compensation, you are not required to file an Indiana income tax return.
Indiana’s Extension of Time to File, Form IT-9 Reciprocal States: Special Filing and Income
You may get Form IT-9 online at www.in.gov/dor/tax-forms/2022- Reporting Instructions
individual-income-tax-forms. You may file Indiana’s Application for If you are a resident of Kentucky, Michigan, Ohio, Pennsylvania or
Extension of Time to File online if you make a payment with it by Wisconsin, and:
April 18, 2023. Pay electronically using DOR’s e-services portal, the • You received wages, salaries, tips, or commissions from Indiana,
Indiana Taxpayer Information Management Engine (INTIME), by you will not owe Indiana adjusted gross income tax on that
visiting intime.dor.in.gov. INTIME offers customers the ability to income. However, you may owe a county tax. If this is the only
manage their accounts in one convenient location, 24/7. type of income you received from Indiana, you should file Form
IT-40RNR, reciprocal nonresident Indiana individual income
Where to Report Your Extension Payment. tax return. See the “Need Tax Forms or Information Bulletins?”
Add your state extension payment to any estimated tax paid. Report section on page 3 for options; or
the total on Schedule F, line 3. • You received other types of Indiana-source income besides wages
tips, salaries or commissions (see items 1 through 8 above), you
Military personnel on duty outside of the United States and Puerto must file Form IT-40PNR instead of Form IT-40RNR; or
Rico on the filing due date are allowed an automatic 60 day extension of • You received both Indiana-source income (see items 1 through
time to file. A statement must be enclosed with the return verifying that 8 above) and wage income from Indiana, you must file form IT-
you were outside of the United States or Puerto Rico on April 18, 2023. 40PNR. The wage income will not be subject to Indiana adjusted
gross income tax. However, see the county tax instructions for
Military personnel in a presidentially declared combat zone have an Reciprocal state residents on page 54 if these wages were
automatic extension of 180 days after they leave the combat zone. In earned in an Indiana county.
addition, if they are hospitalized outside the United States because of
such service, the 180-day extension period begins after being released Example. Fred and Deanna are full-year residents of Michigan, and
from the hospital. The spouse of such service member must use the filed a 2022 joint federal income tax return. During 2022 Fred received
same method of filing for both federal and Indiana (e.g. single or $10,000 winnings from an Indiana riverboat, and Deanna earned
joint). When filing the return, write “Combat Zone” across the top of $55,000 wage income from an Elkhart, Indiana employer. Fred’s
the form (above your Social Security number). riverboat winnings will be taxed by Indiana. Enter Fred’s $10,000
winnings on Indiana Schedule A, line 20, Columns A and B. Deanna’s
wage income is not subject to Indiana adjusted gross income tax.
Therefore, enter Deanna’s wage income in Column A only.
Nonresidency and Income Taxable to
Indiana Note. See county tax instructions for Reciprocal state residents on
A part-year resident owes tax on taxable income received from page 54 to determine if county tax is due on her wage income.
all sources while being a resident of Indiana. A part- or full-year
nonresident also owes tax on income from Indiana sources as listed
below while a legal resident of another state.
Completing Form IT-40PNR
Indiana income includes income from the following sources:
1. Winnings from Indiana riverboats, pari-mutuel wagering, and Line 1 – Income Taxed by Indiana
lotteries; Complete Indiana Schedule A: Income or Loss; Proration; and
2. Labor or services performed in Indiana, including salaries, wages, Adjustments to Income. Instructions for Schedule A begin on page
tips, commissions, etc.; 12. Carry the line 36B amount to line 1 on the front of Form IT-
3. A farm, business, trade or profession doing business in Indiana; 40PNR. Make sure to enclose Schedule A when filing.
4. Any real or personal property located in Indiana, including any
income from the sale or exchange of property located in Indiana; Line 2 – Add-Backs
5. A partnership or an S corporation doing business in Indiana; Enter on this line any add-backs from Schedule B: Add-Backs.
6. Stocks, bonds, notes, bank deposits, patents, copyrights, secret Instructions for Schedule B begin on page 17. Make sure to enclose
Schedule B when filing.
Page 8 IT-40PNR Booklet 2022
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Line 4 – Deductions Example. Mark and Megan have a $420 overpayment, and want to
Enter on this line any deductions from Schedule C: Deductions. apply $300 of it to their 2023 estimated tax account. Their worksheet
Instructions for Schedule C begin on page 20. Make sure to enclose from Form ES-40 has the following breakdown:
Schedule C when filing. • Line I (each installment payment) is $300;
• Line J (portion that represents state tax due) is $270; and
Line 6 – Exemptions • Line K (portion that represents county tax due) is $30.
Enter any exemptions from Schedule D: Exemptions on this line.
Instructions for Schedule D begin on page 28. Make sure to enclose They will enter $30 on line 19a (along with their 2-digit county code),
Schedule D when filing. $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
Line 9 – County Tax minus $300 applied to their 2023 estimated tax account).
Complete Schedule CT-40PNR to figure your county tax. Instructions
for Schedule CT-40PNR begin on page 52. 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
Line 10 – Other Taxes enter the full $30 overpayment on line 19c (Indiana adjusted gross
Enter any other taxes from Schedule E: Other Taxes on this line. income tax amount), and carries it to line 19d. (He will pay the $470
Instructions for Schedule E begin on page 33. Make sure to enclose additional amount by filing the Form ES-40.)
Schedule E when filing.
Important. Estimated tax installment payments made for the 2023 tax
Line 12 – Credits year are due by:
Enter your credits from Schedule F: Credits on this line. Instructions • April 18, 2023 (1st installment)
for Schedule F begin on page 35. Make sure to enclose Schedule F • June 15, 2023 (2nd installment)
when filing. • Sept. 15, 2023 (3rd installment)
• Jan. 16, 2024 (4th installment)
Line 13 – Offset Credits
Enter the total of any offset credits reported on Schedule G: Offset Any installment payment amount entered on line 19d will be considered
Credits on this line. Instructions for Schedule G begin on page 42. to be paid on the day your tax return is filed (postmarked). For instance,
Make sure to enclose Schedule G when filing. an installment payment shown on a return filed on: April 18, 2023, will
be considered to be a 2023 first installment payment; June 3, 2023, will
Line 17 – Donation Check-Offs be considered to be a 2023 second installment payment; and July 22,
Enter on this line the total of any donations made on Schedule IN- 2023, will be considered to be a 2023 third installment payment.
DONATE. Make sure to enclose Schedule IN-DONATE, which is
located at the bottom of Schedule F: Credits, when filing. See page Note. You may complete and mail the ES-40, Estimated Tax Payment
41 for more information. form, along with your payment to DOR’s return address on the form.
Estimated payments can also be made online with an electronic bank
Line 19 – Amount to be Applied as a 2023 Estimated payment (ACH/e-check) or Visa, MasterCard and Discover debit or
Tax Installment Payment credit cards by using DOR’s e-services portal, the Indiana Taxpayer
You should pay estimated tax if you expect to have income during the Information Management Engine (INTIME), at intime.dor.in.gov. See
2023 tax year that: line 26 instructions on page 11 for details about payment options.
• Will not have Indiana income taxes withheld, or
• You think the amount withheld will not be enough to pay your tax See Income Tax Information Bulletin #3 at www.in.gov/dor/files/
liability, and reference/ib03.pdf for additional information about estimated taxes.
• You expect to owe more than $1,000 when you file your tax return.
Line 20 – Penalty for Underpayment of Estimated Tax
There are several ways you can make estimated tax payments. First, visit our You might owe a penalty for the underpayment of estimated tax if you
website at www.in.gov/dor/tax-forms/2022-individual-income-tax-forms did not have taxes withheld from your income and/or you did not pay
to get Form ES-40. Use the worksheet on Form ES-40 to see how much you enough estimated tax throughout the year.
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 In fact, not properly paying estimated tax is one of the most common
estimated tax account. To do so, enter any portion of the overpayment: errors made in filing Indiana tax returns. Generally, if you owe $1,000
• On line a, if you want to apply an amount to offset estimated or more in state and county tax for the year that’s not covered by
county tax due (from Form ES-40 worksheet, line K). Also, enter withholding taxes, you need to be making estimated tax payments.
the 2-digit county code from line K; and/or
• On line b, if your spouse lived in a different county than you did You might owe this penalty if:
on Jan. 1, 2023, and you want to apply an amount to offset your • The total of your credits, including timely made estimated tax
spouse’s estimated county tax due (from Form ES-40 worksheet, payments, is less than 90% of this year’s tax due or 100% of last
line L). Also, enter the 2-digit county code from line L; and/or year’s tax due, ** or
• On line c, if you want to apply an amount to offset your estimated • You underpaid the minimum amount due for one or more of the
state tax due (from Form ES-40 worksheet, line J). installment periods.
IT-40PNR Booklet 2022 Page 9
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If either of these cases apply to you, you must complete Schedule IT-2210 Option 1. Pay your estimated tax in one payment on or before Jan. 18,
or IT-2210A to see if you owe a penalty or if you meet an exception. 2023, and file your tax return by April 18, 2023; or
• If you owe this penalty, complete Schedule IT-2210 or IT-2210A Option 2. Make no estimated tax payment and file your tax return and
and write the penalty amount on Form IT-40PNR, line 20. pay all the tax due by March 1, 2023.
• If you meet an exception, complete Schedule IT-2210 or IT-2210A
to show which exception was met. Example. More than two-thirds of Henry’s gross income is from
farming. He should complete Schedule IT-2210. Henry will be able
Keep the completed form with your records as DOR may request it at to use the Section D Short Method to figure his penalty or to show he
a later date. meets an exception to owing a penalty.
*You must have timely paid 100% of lines 8 and 9 of your 2021 IT-40 Visit our website at www.in.gov/dor/tax-forms/2022-individual-
or IT-40PNR. Note: If last year’s Federal adjusted gross income was income-tax-forms to get Schedule IT-2210 or Schedule IT-2210A.
more than $150,000 ($75,000 for married filing separately), you must
pay 110% of last year’s tax (instead of 100%) to meet this exception. Line 21 – Refund
You have a refund if line 18 is greater than the combined amounts
**Farmers and fishermen should see the special instructions on page 10. entered on lines 19d and 20.
Important. DOR will automatically assess an underpayment penalty if Important. If the combination of line 19d plus line 20 is greater than
it looks like you owe a penalty for the underpayment of estimated tax. 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
Should You Use Schedule IT-2210 or Schedule IT-2210A? the remainder of line 18 minus line 20. See the second example about
Schedule IT-2210 should be used by individuals who receive income Stu under the Line 19 instructions on page 9.
(not subject to withholding tax) on a fairly even basis throughout the
year. This schedule will help determine whether a penalty is due, or A Note About Refund Offsets
whether an exception to the penalty has been met. Indiana law requires that money you owe to the state, its agencies,
and certain federal agencies, be deducted from your refund or credit
Example. Jim and Sarah together received $4,500 in pension income before a refund is issued. This includes money owed for past-due
each month. Since their income is received on a fairly even basis, they’ll taxes, student loans, child support, food stamps or an IRS levy. If
use Schedule IT-2210 to figure their penalty or exception to the penalty. DOR applies your refund to any of these debts, you will receive a letter
explaining the situation.
Farmers and fishermen have special filing considerations. If at least
two-thirds of your gross income is from farming or fishing, complete When to Expect Your Refund
Schedule IT-2210, using the Section D Short Method. Generally, 10 to 14 business days is the average wait for a refund if
the tax return is electronically filed; it can take up to 12 weeks for the
Schedule IT-2210A may be used by individuals who receive income refund to be issued if you mail in your tax return.
(not subject to withholding tax) unevenly during the year. Also use
this form if you had substantial changes in withholding during the Where’s Your Refund?
year. See Income Tax Information Bulletin #3 available at www.in.gov/ There are several ways to check the status of your refund. You will
dor/files/reference/ib03.pdf for further information. This schedule will need to know the exact amount of your refund, and a Social Security
help determine whether a penalty is due, or whether an exception to number entered on your tax return. Then, do one of the following:
the penalty has been met. • Go to www.in.gov/dor/individual-income-taxes/check-the-status-
of-your-refund and click Check the Status of Your Refund.
Example. Bill’s income is from selling fireworks in June and July. He • Call (317) 232-2240 for automated refund information; to speak
will want to figure any penalty due on Schedule IT-2210A, which may to a representative, please call during regular business hours, 8
exempt him from having had to pay estimated tax on the April 18, a.m. to 4:30 p.m., Monday - Friday.
2022 first installment due date.
A refund directly deposited to your bank account may be listed on
Example. Rachael received a sizeable lump sum distribution in your bank statement as a credit, deposit, etc. If you have received
December of 2022. She figured how much estimated tax was due, and information from DOR that your refund has been issued, and you are
paid it in full by the Jan. 17, 2023, fourth period installment due date. not sure if it has been deposited in your bank account, call the ACH
By completing Schedule IT-2210A, she shows she owes no penalty Section of your bank or financial institution for clarification.
for the first three installment periods, and that a proper payment was
made for the fourth installment period. She will owe no penalty. Important. If we are unable to deposit your refund to the listed
account (incorrect/incomplete account numbers; account closed;
Farmers and Fishermen. refund to go to an account outside the United States; etc.), DOR will
Special options are available if more than two-thirds of your gross mail a paper check to the address on the front of the tax form.
income for 2021 and/or 2022 was from farming or fishing.
Note. A refund deposited directly to your Hoosier Works MasterCard
account will appear on your monthly statement.
Page 10 IT-40PNR Booklet 2022
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Statute of Limitations for Refund Claims Exception. No penalty will be due if you have:
There is a statute of limitations when filing for a refund of overpaid • An extension of time to file,
taxes for tax year 2022. In general, a claim for refund must be made • Are filing and paying the remaining tax due by the extended filing
by April 15, 2026 (Nov. 14, 2026 if filing under extension). The claim due date, and
for refund is considered to be made on the day your tax return • Have prepaid at least 90% of the amount due by April 18, 2023.
is postmarked. If you file your 2022 tax return after the statute of
limitations has expired, no refund will be issued. Line 25 – Interest
You will owe interest (even if you have an extension of time to file) if
Line 22 – Direct Deposit your tax return is filed after the April 18, 2023 due date and you have
You may choose to have your refund deposited in your checking, savings an amount due. Interest should be figured on the sum of line 23 minus
or Hoosier Works Master Card account. If you want your refund directed line 20. Contact DOR at (317) 232-2240 or visit our website at www.
into your checking or savings account, complete lines 22 a, b, c and d. in.gov/dor/files/reference/dn03.pdf to get Departmental Notice #3 for
the current interest rate.
Caution. If you choose this option, make sure to verify the account
information after you have entered it. This will help ensure your Line 26 – Amount Due – Payment Options
refund is deposited into your desired account. There are several ways to pay the amount you owe.
The routing number is nine digits, with the first two digits of the Electronic payments can be made via DOR’s e-service portal, the Indiana
number beginning with 01 through 12 or 21 through 32. Do not use a Taxpayer Information Management Engine (INTIME), at intime.dor.
deposit slip to verify the number because it may have internal codes as in.gov. INTIME offers customers the ability to manage their accounts in
part of the actual routing number. one convenient location, 24/7. Accepted forms of payment via INTIME
include electronic bank payment (ACH/e-check), Visa, MasterCard
The account number can be up to 17 digits. Omit any hyphens, accents and Discover debit or credit cards. No fees are assessed for electronic
and special symbols. Enter the number from left to right and leave any bank payments. Fees apply to payments made with credit or debit cards.
unused boxes blank. You do not need to logon to INTIME to make payments. Simply select
the “Make a Payment” option on the page. An INTIME User Guide for
Check the appropriate box for the type of account you are making Individual Income Tax Customers is available at www.in.gov/dor/files/
your deposit to: either a checking account or savings account. intime-individual-guide.pdf to help you through the process.
To comply with banking rules, you must place an X in the box on line Another option is to mail your payment to:
d if your refund is going to an account outside the United States. If you Indiana Department of Revenue
check the box, we will mail you a paper check. P.O. Box 7224
Indianapolis, IN 46207-7224
If you currently have a Hoosier Works MasterCard and wish to have
your refund directly deposited in your account, enter your 12-digit You may pay in person at one of DOR’s district offices with cash, but with
account number on line 22b, where it says “Account Number” (do the exact amount only. Other in-person options include paying with a
not write anything on line 22a “Routing Number”). You can find money order, cashier’s check or personal check made payable to DOR.
your 12-digit account number in the upper right-hand corner of your
account monthly statement. Note. All payments to DOR must be made with U.S Funds.
Note. DO NOT use your MasterCard 16-digit number. Make sure to Payment plan option. If you cannot pay the full amount due at the
check the “Hoosier Works MC” box on line 22c. time you file, you may be eligible to set up a payment plan online
using DOR’s e-services portal, the Indiana Taxpayer Information
For more information on direct deposit, please see “Where’s Your Management Engine (INTIME), at intime.dor.in.gov. INTIME offers
Refund?” in the left-hand column. customers the ability to manage their tax account(s) in one convenient
location, 24/7. After you get a tax bill, go to intime.dor.in.gov and
Line 23 create a log on using the Letter ID on your tax bill. Set up a payment
If line 21 is less than zero, you have an amount due. Enter here as a plan from the “All Actions” tab menu.
positive number and skip to line 24.
OR Important. If using the payment plan option, penalty and interest will
If line 15 is greater than line 14, complete the following steps: be due on all amounts paid after the April 18, 2023 due date.
Subtract line 14 from line 15 and enter the total here .. A __________
Enter any amount from line 20 ........................................ B __________ If you have questions, contact DOR in one of three ways:
Add lines A + B. Enter total here and on line 23 ........... C __________ • Use the secure messaging feature in the Indiana Taxpayer
Information Management Engine (INTIME). If you are not
Line 24 – Penalty registered, create an online account at intime.dor.in.gov. Select
You may owe a penalty if your tax return is filed after the April 18, “New to INTIME? Sign up” and follow instructions to complete
2023 due date and you have an amount due. Penalty is 10% of the the process. You will need your taxpayer ID (FEIN, SSN, etc.) and
amount due (line 23 minus line 20) or $5, whichever is greater. the unique Letter ID, printed in the upper-right hand corner of
IT-40PNR Booklet 2022 Page 11
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Schedule A
this letter. Once logged in, select “Respond to a letter, notice, or Schedule A
bill” under the “All Actions” menu.
Sections 1, 2 and 3 Instructions
• Call DOR Customer Service at 317-232-2240, Monday through
Sections 1, 2 and 3 will help you to separate the income to be taxed
Friday, 8 a.m. - 4:30 p.m. EST.
and adjustments to be allowed by Indiana.
• Correspond with DOR via mail using this address:
Indiana Department of Revenue
General Information
100 N. Senate Ave.
Income received from Indiana sources should be reported as Indiana
Indianapolis, IN 46204-2253
income by nonresidents, except certain types of Indiana-source
income that are subject to tax only by your state of residence at the
Returned Checks and Other Types of Payments time you receive it.
If you make a tax payment with a check, credit card, debit card,
electronic funds transfer, or any other instrument in payment by any
For part-year residents, the portion of the following types of income
commercially allowable means, and DOR is unable to obtain payment
from Indiana sources that were received while a nonresident should
for its full amount when it is presented for payment through normal
not be reported as income taxed by Indiana: interest from bonds,
banking channels, a $35 penalty will be assessed.
dividends, unemployment compensation, and gains from the sale of
stock, bonds, or other securities. However, gains from real or tangible
The assessed amount will be due immediately upon receipt of the tax
personal property located in Indiana should be reported as income
due notice and must be paid by certified check, bank draft or money
taxed by Indiana. In addition, if you receive income from a pass
order. Note. Any permits and/or licenses issued by DOR may be revoked
through entity (e.g., an S corporation or partnership) that conducts
if the assessed amount is not paid immediately.
business in Indiana, your share of the entity’s income derived from
Indiana sources should be reported as income taxed by Indiana.
Signatures and Signing Dates
First, read the Authorization area on Schedule H. Then, sign and date
For full-year nonresidents, the portion of the following types of income
the tax return. If this is a jointly filed tax return, both you and your
from Indiana sources should not be reported as income taxed by
spouse must sign and date it. Make sure to enclose the completed
Indiana: interest from bonds, dividends, unemployment compensation,
Schedule H when filing.
and gains from the sale of stocks, bonds, or other securities.
Taxpayer Advocate Example. The distributive share of income received from an
As prescribed by the Taxpayer Bill of Rights, DOR has an appointed
S corporation doing business in Indiana must be reported by
Taxpayer Advocate whose purpose is to facilitate the resolution of
nonresidents as income taxable in Indiana to the extent the S
taxpayer complaints and complex tax issues. If you have a complex tax
corporation is doing business in Indiana.
issue, you must first pursue resolution through normal channels, such
as contacting the customer service division at (317) 232-2240. If you
Example. Interest income received by an Illinois resident from an
are still unable to resolve your tax issue, or a tax assessment places an
Indiana personal savings account is not income taxable to Indiana.
undue hardship on you, you may receive assistance from the Office of
the Taxpayer Advocate.
Read the following line-by-line instructions for more information.
Also, see Income Tax Information Bulletin #28 at www.in.gov/dor/
For more information, and to get required schedules if filing for an offer
files/reference/ib28.pdf for more information.
in compromise or a hardship case, visit our website at: www.in.gov/
dor/contact-us/tao. You may also contact the Office of the Taxpayer
Important Information about Possible Year-End
Advocate directly at taxadvocate@dor.in.gov, or by telephone at (317)
Federal Legislation
232-4692. Submit supporting information and documents to: Indiana
This publication was finalized before all year-end federal legislative
Department of Revenue, Office of the Taxpayer Advocate, P.O. Box
changes were complete. Therefore, some of the income/loss and
6155, Indianapolis, IN 46206-6155.
adjustments reported may need to be adjusted.
Where to Mail Your Tax Return You may wish to periodically check DOR’s homepage at www.in.gov/
dor for updates about any impact of late federal legislation.
If you are enclosing a payment, please mail your tax return with all
enclosures to:
How to Report a Loss
Indiana Department of Revenue
When reporting a loss or negative entry, use a negative sign.
P.O. Box 7224
Example. Write a $125 loss as -125.
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
Page 12 IT-40PNR Booklet 2022
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Schedule A: Section 1: Income or Loss Line 7 – Business Income or Loss
Enter in Column A the business income from Schedule C that is reported
on federal Schedule 1, line 3. Enter in Column B that portion of business
Schedule A income subject to tax in Indiana. Also, see the instructions for:
• Tax Add-Back on Schedule B, line 1, on page 17,
Section 1: Income or Loss • Apportionment on line 19 if this income is from a business doing
You must complete your federal income tax return first.
business both within and outside Indiana, and
Unless otherwise stated: • Other Income on line 20.
• Enter in Column A your income and adjustments as they appear
on your federal return, Form 1040/1040-SR; and
Line 8 – Capital Gain or Loss from Sale or Exchange
• Enter in Column B the portion of your income and adjustments
of Property
that is subject to Indiana income tax.
Enter in Column A the capital gain or loss from federal Schedule
D that is reported on federal Form 1040/1040-SR, line 7. Enter in
Lines 1 and 2 – Wages, Salaries, Tips, Etc.
Column B that portion received while you were an Indiana resident
Enter wages, salaries, tips, other compensation, and any other amounts
and/or from the sale or exchange of property located in Indiana.
entered on Lines 1a through 1h. You should report your income on
line 1 and your spouse’s income on line 2. Enter in Column B income
Note. Any capital loss claimed is subject to the same capital loss limitations
received while you were an Indiana resident, and/or income from
that apply for federal tax purposes. For more information about federal
Indiana sources received while you were not an Indiana resident.
capital loss limitations, get federal Schedule D, Capital Gains and Losses.
Note for part-year or full-year nonresidents. Do not enter that
Line 9 – Other Gains or Losses from Form 4797
portion of your Indiana source wage, salary, tip or commission
Enter the gain or loss from the sale or exchange of property as
income in Column B earned while you were a resident of a reciprocal
reported for federal tax purposes on federal Schedule 1, line 4. Enter
agreement state (see Reciprocal States: Special Filing and Income
in Column B that portion received:
Reporting Instructions on page 8). • If the property was Indiana property, and/or
• While you were an Indiana resident, regardless of the source.
Lines 3 and 4 – Interest and Dividend Income
Enter in Column A your taxable interest and dividend income as
Line 10 – IRA Distributions
reported on your federal return, lines 2b and/or 3b, and report the
Enter in Column A the taxable portion of the IRA distribution
interest and dividend income attributable to Indiana in Column B.
reported on your federal Form 1040/1040-SR, line 4b. Enter in
If any of the interest reported in Column B is from U.S. government
Column B that portion received while you were an Indiana resident.
obligations, including U.S. savings bonds, Treasury notes, T-Bills, etc.,
you may deduct these amounts on Form IT-40PNR, Schedule C, line 4.
Line 11 – Pensions and Annuities
Enter in Column A the taxable portion of all pensions, annuities and
Interest from municipal obligations. Do not report any interest
other retirement income as reported on your federal Form 1040/1040-
from municipal obligations on line 3. However, if you were an Indiana
SR, line 5b. Enter in Column B that portion received while you were
resident when receiving interest from a non-Indiana municipal
an Indiana resident.
obligation, see OOS municipal obligation interest add-back on page
17 to see if you are required to add it to your Indiana income to be
Note. You will be eligible for a deduction if you included any railroad
taxed. See Income Tax Information Bulletin #19 at www.in.gov/dor/
retirement benefits issued by the U.S. Railroad Retirement Board on this
files/reference/ib19.pdf for more information.
line in Column B. See Schedule C, line 6 instructions for more information.
Line 5 – Taxable Refunds, Credits or Offsets
Line 12 – Net Rent or Royalty Income or Loss
Enter in Column A the amount of taxable refunds, credits or offsets
Enter in Column A the net rent and royalty income or loss included in
of state and local income taxes that was reported on your federal
the total on federal Schedule 1, line 5.
Schedule 1, line 1. Enter in Column B that portion received while you
were an Indiana resident.
Enter in Column B the net royalty income/loss:
• Received while you were an Indiana resident; and
Line 6 – Alimony Received • Received while you were an Indiana nonresident if the income/loss
Enter in Column A the amount of alimony reported on your federal
results from the conduct of a trade or business conducted in Indiana.
Schedule 1, line 2a. Enter in Column B that portion you received while
you were an Indiana resident.
Enter in Column B the net rental income/loss:
• Received while you were an Indiana resident; or
Lines 7, 12 – 16 • From real property located in Indiana received while you were a
Important. The amounts on line 7 and lines 12 through 16 should
nonresident; and
reflect the amounts reported on your federal Schedule 1 (after any • In general, from personal property located in Indiana.
application of passive activity loss limitations from federal Form 8582).
Also, see the instructions for tax add-back for Section B, line 1, on
page 17.
IT-40PNR Booklet 2022 Page 13
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Schedule A: Section 1: Income or Loss Continued Indiana income tax return, and report any withholding amounts from
that schedule on Indiana’s Schedule F, lines 1 and 2.
Lines 13, 14 and 15 – Partnership, Trust and Estates,
and S Corporation Income or Loss Note. See the instructions for tax add-back for Schedule B, line 1, on
Enter in Column A the income or loss from partnerships, trusts and page 17.
estates, and S corporations, that is included in the total on federal
Schedule 1, line 5. Line 16 – Farm Income or Loss
Enter in Column A the farm income/loss from federal Schedule 1,
Enter in Column B that portion of income received from the line 6. Enter in Column B that portion of farm income/loss subject to
partnerships, trusts and estates, and S corporations while you were tax in Indiana.
an Indiana resident and/or the portion received from Indiana sources
while being a nonresident. Also, see the instructions for:
• Apportionment on Section 1, line 6 if this income is from a farm
Fiduciary*. If you are a nonresident, the Indiana fiduciary(s) should doing business both within and outside Indiana, and
provide to you an apportioned amount to be taxed by Indiana on • Tax add-back for Schedule B, line 1, on page 17.
Schedule IN K-1. If the fiduciary does not apportion its income, then
enter in Column B the same amount as you entered in Column A. Line 17 – Unemployment Compensation
Enter in Column A the unemployment income from federal Schedule
Partnership and S Corporation*. If you are a nonresident, the Indiana 1, line 7. Enter in Column B that portion of unemployment income
partnership/S corporation should provide to you an apportioned received while you were an Indiana resident.
amount to be taxed by Indiana on Schedule IN K-1. If that Indiana
entity does not apportion the income, then enter in Column B the Important. You may qualify for a deduction if you received
same amount from that entity(s) as you entered in Column A. unemployment compensation while you were an Indiana resident. For
more information, see page 22 for Schedule C, line 10 instructions.
*Information for Nonresidents. Partnerships, S corporations, and trusts
and estates located in and/or doing business in Indiana are required to: Line 18 – Social Security and Railroad Retirement
• File an annual return, Form IT-65/Form IT-20S/Form IT-41; Benefits
• Withhold Indiana state and county (when applicable) income tax on Enter in Column A the portion of Social Security and/or railroad
behalf of their nonresident partners/shareholders/beneficiaries*; and, retirement benefits that are taxed on your federal Form 1040/1040-SR,
• Figure and pay (with the filing of that annual return and Schedule line 5b and/or line 6b. Enter in Column B* the portion received while
Composite) Indiana state and county income tax due on their you were an Indiana resident.
individual nonresident partners/shareholders/beneficiaries.*
*Note. Indiana will not tax Social Security benefits or railroad
*This withholding requirement does not apply to the residents of retirement benefits which are issued by the U.S. Railroad Retirement
Arizona, Oregon, and Washington D.C., who are subject to and pay Board. Therefore, if you listed any of these benefits in Column B. then
income taxes at rates of 3.23% (.0323) or higher to their resident state. look at Indiana Schedule C: Deductions. Enter those same amounts on
line 5 and/or line 6 on Schedule C.
Individuals who are included on the entities’ Schedule Composite are
not required to file an individual income tax return to report income Line 19 – Indiana Apportioned Income
from those entities with three exceptions: Apportioned business income from Schedule IT-40PNRA is reported
on this line. The apportionment schedule is used only by nonresidents
Exception 1. Form IT-40PNR must be filed and all taxable income with income or losses from a business that does business both within
reported if the pass-through entity withholds county tax on the and outside Indiana. Report the amount from Schedule(s) IT-
nonresident partner, shareholder and/or beneficiary. See Form IT-65/IT- 40PNRA, Part 3, line 3. You may access Schedule IT-40PNRA at www.
20S Schedule IN K-1, line 9, or Form IT-41 Schedule IN K-1, line 12. in.gov/dor/tax-forms/2022-individual-income-tax-forms.
Exception 2. Form IT-40PNR must be filed and all taxable income Note. If you are apportioning business income, make sure to:
reported if the individual has other taxable Indiana-source income • Report the full amount from your federal return onto Indiana
that is not included on a Schedule Composite. Schedule A, Section 1, Column A, and
• Not report any of that income in the corresponding Column B.
Exception 3. Form IT-40PNR must be filed if the individual completed Instead, you will report the amount to be taxed by Indiana in
Schedule IN-COMPA. Column B on this line.
However, if you have any other Indiana-source income, you are Example. Mark is a full-year nonresident of Indiana. His company did
required to file Form IT-40PNR, reporting both that income and any business both within Indiana and in other states. On Indiana Schedule
income already reported and taxed on Form IT-65/IT-20S/IT-41 (all A, Section 1, line 7, Column A, he reported the same amount of
Indiana-source income). business income as he reported on his federal Schedule 1. He left line
7, Column B blank. He entered the amount apportioned to Indiana on
You will need to include Schedule IN K-1 with the filing for the Section 1, line 19, Column B.
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Schedule A: Proration
Line 20 – Other Income Schedule A
Enter any other income or loss for which there is no named line Section 2: Adjustments to Income
provided on the IT-40PNR return. Adjustments to income from federal Form 1040/1040-SR and
• Report any NOL from your federal Schedule 1, line 8a, as a federal Schedule 1.
negative amount in Column A only. You will show the Indiana
portion of your Indiana net operating loss deduction on Schedule List the adjustments used in arriving at your federal adjusted gross income.
C under line 11. See instructions for Indiana net operating loss
deduction on page 23 for more information. Unless otherwise stated:
• Other types of income or loss would include riverboat winnings, • Enter in Column A your adjustments as they appear on your
prizes, awards, amounts recovered from bad debts, gross lottery and federal return; and
other gambling winnings, etc., as reported on your federal return. • Enter in Column B the portion of your adjustments that are
available to offset Indiana income tax.
List the source(s) of the income or loss reported on this line.
*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 adjustments may need to be eliminated
Schedule A
and/ or refigured. You may wish to periodically check DOR’s homepage at
Proration www.in.gov/dor for updates about any impact of late federal legislation.
The purpose of this section is to compare the Indiana Schedule A,
Section 1, line 21A income taxed on your federal return to the line 21B
Line 22 – Educator Expense
income taxed by Indiana. To do this, divide the amount on line 21B Enter in Column A any educator expense deduction claimed on your
by the amount on line 21A. Please round your answer to a decimal federal Schedule 1, line 11. Enter in Column B the portion of the
followed by three numbers. expense that was spent while you were an Indiana resident.
Example. $3,100 ÷ $8,000 = .3875, which rounds to .388. Enter the
Line 23 – Certain Business Expenses of Reservists,
result here and on Schedule D: Exemptions, line 8.
Performing Artists, Etc.
Enter in Column A the adjustment claimed for certain business expenses
Note. If line 21B is a loss, enter zero (0) in Box 21D and on Schedule of reservists, performing artists and fee-based government officials
D: Exemptions, line 6. If line 21A (or Box 21C) is a loss, and line 21B claimed on your federal Schedule 1, line 12. Enter in Column B that
is a positive amount, enter 1.00 (100%) in Box 21D and on Schedule portion of the deduction that is directly related to the reported income
D: Exemptions, line 8. (in Section 1, Column B) produced in conjunction with those expenses.
Special instructions for non-Indiana military personnel. If you are
Line 24 – Health Savings Account Deduction
in the military and Indiana is not your home of record, your military If you are eligible to take this adjustment on your federal Schedule
income will not be used to reduce your Indiana exemptions. 1, line 13, you are also allowed the adjustment on your Indiana tax
Complete the worksheet below. return. Enter the amount of the federal deduction in Column A. If
some or all of the income on which this deduction was based is taxed
Step 1 Enter the amount from Schedule A, by Indiana, then you will be able to take a deduction in Column B.
line 21A .............................................................................1 __________
Line 25 – Moving Expenses
Step 2 Enter any non-Indiana service You may have deducted moving expenses on your federal Schedule 1,
member’s military income included on line 14, if you are a member of the Armed Forces on active duty and, due
Schedule A, lines 1A and/or 2A.....................................2 __________ to a military order, you moved because of a permanent change of station.
Enter in Column A the amount of moving expense deduction reported
Step 3 Subtract Step 2 from Step 1. on your federal Schedule 1, line 26. If Indiana is your home of record,
Enter result here and in Box 21C on report this amount in Column B. If it is not, leave Column B blank.
Schedule A, Proration Section .......................................3 __________
Line 26 – Deductible Part of Self-Employment Tax
Step 4 Enter the amount from Schedule A, Enter in Column A the amount claimed on federal Schedule 1, line 15.
line 21B .............................................................................4 __________ If some or all of the income on which this deduction was based is taxed
by Indiana, then you will be able to take a deduction in Column B.
Step 5 Divide Step 4 by Step 3. Round
the result to a decimal followed by three If some or all of your self-employment tax is figured on income
numbers. Enter result here and in Box 21D derived from other states as well as Indiana, you must prorate your
of the Proration Section on Schedule A .......................5 __________ total federal adjustment reported in Column A to arrive at the amount
to be reported in Column B. Use the formula below to figure your
deduction for Column B.
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Schedule A, Section 2: Adjustments to Income Continued Line 29 – Penalty on Early Withdrawal of Savings
Enter in Column A the penalty on early withdrawal of savings
IN self-employment reported on your federal Schedule 1, line 18. Enter in Column B that
income Federal Indiana portion that was forfeited while you were an Indiana resident
X Adjustment = Deduction (provided it is included on Section 1, line 3, Column B).
Federal self-employment (Column A) (Column B)
income
Line 30 – Alimony Paid
Enter in Column A the alimony claimed as a deduction on your
Line 27 – Payments to Self-Employed, SEP, SIMPLE
federal Schedule 1, line 19a. Enter in Column B the portion that was
and Qualified Retirement Plans
paid while you were an Indiana resident.
Enter in Column A the deduction reported on your federal Schedule
1, line 16. You are allowed a deduction in Column B (based on Indiana
self-employment income reported in Column B of Section 1) for Line 31 – IRA Deduction
Enter in Column A the Individual Retirement Account (IRA)
contributions to qualified self-employment retirement plans to the
deduction reported on your federal Schedule 1, line 20. Enter in
extent allowed in arriving at your federal adjusted gross income.
Column B an adjustment (based on your Indiana compensation)
for the amount you paid into the IRA (provided you qualify for the
If you have self-employment income derived from other states as well
deduction for federal tax purposes). Compensation includes wages,
as Indiana, you must prorate your total federal adjustment reported
salaries, commissions, tips, professional fees, bonuses and other
in Column A between the other states and Indiana. Therefore, the
amounts you received for providing personal services.
allowable Indiana adjustment to be reported in Column B is limited
to the percent of your federal adjustment that your Indiana self-
To figure the IRA adjustment for Column B, you must use the percentage
employment income bears to your total self-employment income.
that your Indiana compensation bears to your federal compensation. Use
Use the formula below to figure your deduction for Column B.
the formula below to figure your deduction for Column B.
IN self-employment
income Federal Indiana IN
X Adjustment = Deduction compensation Federal Indiana
Federal self-employment (Column A) (Column B) X Adjustment = Deduction
income Federal (Column A) (Column B)
compensation
If both you and your spouse have Indiana self-employment income
and qualify for the deduction on the federal return, you both are Line 32 – Student Loan Interest Deduction
Enter in Column A the student loan interest deduction reported on
allowed a deduction on the Indiana tax return.
your federal Schedule 1, line 21. Enter in Column B the portion of the
deductible interest paid while you were an Indiana resident.
Line 28 – Self-Employed Health Insurance Deduction
Enter in Column A the deduction claimed on your federal Schedule
1, line 17. If some or all of the income on which this deduction is Line 33 – Reserved for Future Use
based is taxed by Indiana, then you will be able to take a deduction in
Column B. The income on which this deduction is based is from self- Line 34 – Other
Use this line to report certain deductions claimed on your federal
employment income and certain income from partnerships and/or S
income tax return for which no specific line was otherwise provided
corporations. If some or all of your self-employed health insurance
above when arriving at federal adjusted gross income. If you have
deduction is figured on income derived from other states as well as
written in allowable deductions on your federal Schedule 1, line 23 or
Indiana, you must prorate your total federal adjustment reported in
24, enter those amounts here.
Column A to arrive at the amount to be reported in Column B. Use
the formula below to figure your deduction for Column B.
Following are two of the more commonly reported deductions:
• Enter in Column A the Jury Duty Pay deducted on your federal
IN source: self-employment Schedule 1, line 24a. Enter in Column B the jury duty pay turned
income/certain income over to your employer that is in direct relation to the salary being
from partnerships and/or taxed by Indiana (included in the Section 1 line 21, Column B total).
S corporations Federal Indiana
X Adjustment = Deduction • Enter in Column A the Archer MSA Deduction deducted on
Federal self-employment (Column A) (Column B) your federal Schedule 1, line 23. Enter in Column B the portion
income/certain income of the deduction that is directly related to the reported income in
from partnerships and/or Section 1, Column B.
S corporations
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Schedule B: Add-Backs For example, Casino X remits $10,000,000 in riverboat wagering taxes
in 2022. Individual owns 10% of Casino X. Individual’s share of Casino
X’s income taxes is $1,000,000. Instead of individual adding back the
Schedule B: Add-Backs full $1,000,000, Individual will add back $500,000.
Some amounts reported on your federal tax return may require
different treatment for Indiana income tax purposes. Listed in this Note. Income, losses and/or expenses from other schedules and
area are those items that may need to be added back on your Indiana forms may flow through to federal Schedules C, E and F. For example,
tax return. Please review the list carefully. When reporting these add- partnership income from federal Schedule K-1 (Form 1065) may be
backs, maintain with your records the corresponding federal tax forms included on federal Schedule E, while expenses from federal Form
and schedules as DOR can require you to provide them at a later date. 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.
You may have to complete this schedule if:
• You were a nonresident and had Indiana-source income or loss; Line 2 – OOS Municipal Obligation Interest Add-Back
and/or Interest earned from a direct obligation of a state or political subdivision
• You reported Indiana add-backs in prior years which impact this other than Indiana (out of state, or OOS) is taxable by Indiana if:
year’s filing. • The obligation is acquired after Dec. 31, 2011; and
• You received this income while being an Indiana resident.
Enter those amounts which have a direct relationship to Indiana taxation.
Interest earned from obligations held or acquired before Jan. 1, 2012,
Example. Juan lives in Illinois and owns and runs an Indiana farm. is not subject to Indiana income tax and should not be reported as an
He will have to add back on line 1 any taxes based on or measured by add-back.
income that were deducted on his federal Schedule F.
Note. Interest earned from obligations of Puerto Rico, Guam, Virgin
Important Information About Possible Year-End Islands, American Samoa, or Northern Mariana is not included in
Federal Legislation federal gross income and is exempt under federal law. There is no add-
This publication was finalized before all year-end federal legislative back for interest earned on these obligations.
changes were complete. Therefore, some of these add-backs may need
to be adjusted. You may wish to periodically check DOR’s homepage at For more information about this add-back, see Income Tax
www.in.gov/dor for updates about any impact of late federal legislation. Information Bulletin #19 at www.in.gov/dor/files/reference/ib19.pdf.
Treatment of Previously Discontinued Add-Back Enter code 137 on Schedule B under line 5 if reporting this add-back.
Several discontinued add-backs were created as a result of timing
differences between federal and Indiana allowable expenses. See Certain Line 3 – Bonus Depreciation Add-Back
Discontinued Add-Backs: How and When to Report a Final Catch-Up You must make an exception for any bonus depreciation deduction
Modification on page 19 for information about these add-backs. used for property placed in service after Sept. 11, 2001. Bonus
depreciation is the additional first-year special depreciation deduction
Line 1 – Tax Add-Back allowed under Section 168(k) of the Internal Revenue Code (IRC).
If you did not complete Federal Schedules C, E or F, which include
sole proprietorship income, farm income, rental, partnership, S Figure the net income (or loss) that would have been included in
corporation, and trust and estate income (or loss), then do not federal adjusted gross income had the bonus depreciation method
complete this line. not been used. Then, enter the difference, which may be a positive or
negative amount, on line 3.
On those schedules you are allowed to claim a deduction for taxes paid
which are: Example. Mack used the bonus depreciation method for federal income
• based on, or tax purposes to deduct $2,000. Absent bonus depreciation, he would
• measured by income, and have been entitled to a $500 depreciation deduction. After refiguring
• levied at a state level by any state in the United States. the depreciation without using the bonus method, he has to add back
$1,500 on his Indiana tax return.
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 Note. After making an initial adjustment for bonus depreciation you
property taxes on this line. will need to refigure the amount of depreciation available for state tax
purposes for subsequent years.
Wagering Taxes. The portion of wagering taxes required to be added
back as a tax based on or measured by income is being reduced (phased Example. Ann made an initial adjustment for bonus depreciation on
out). The percentage of taxes required to be added back is determined last year’s Indiana tax return. This year she figures she is entitled to
by the first date of the taxpayer’s taxable year, and is determined as a $150 additional depreciation amount for state tax purposes. She
follows: 2020 – 75%; 2021 – 62.5%; 2022 – 50%; 2023 – 37.5% 2024 – should enter that amount as a negative entry, or -150, on line 3.
25.0%; 2025 – 12.5%; 2026 and later – no add back required.
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Schedule B: Add-Backs Continued One example that occurs periodically is when there is a federal
disaster. Congress will amend the IRC to permit IRA withdrawals
Special rules may apply if the bonus depreciation is taken against to be included over three years (e.g., a 2022 withdrawal would be
property acquired in a like-kind exchange or acquired in a taxable included one-third in 2022, one-third in 2023, and one-third in
year in which you have an excess business loss. See Income Tax 2024). If Indiana decoupled from the IRC, the whole amount would
Information Bulletin #118 at www.in.gov/dor/files/reference/ib118.pdf be included in 2022, none in 2023, and none in 2024. The Code 120
for additional information. would be for the two-thirds add-back in 2022, the Code 147 would be
for the one-third deduction in 2023 and 2024. These have occurred
Line 4 – Section 179 Expense Add-Back from time to time but (1) did not affect Indiana because of the specific
You may have figured an IRC Section 179 expense using a ceiling disaster and (2) the IRC conformity date was updated in time.
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 Enter code 147 on Schedule B under line 5 if reporting this add-back.
$25,000. If you figured IRC Section 179 expense using a ceiling
amount of more than $25,000, you will need to add back the difference Employer Student Loan Payment Add-Back 148
between it and $25,000 on line 4. If your employer paid any amount for your student loans and you
excluded the payment from your federal gross income, add back the
Special rules may apply if the bonus depreciation is taken against amount you excluded from your gross income. This amount must be
property acquired in a like-kind exchange or acquired in a taxable added back regardless of whether your employer paid you the amount
year in which you have an excess business loss. See Income Tax for your student loans or whether your employer paid the student loan
Information Bulletin #118 at www.in.gov/dor/files/reference/ib118.pdf on your behalf. Also see the instructions for the deduction for the
for additional information. Employer Student Loan Payment Interest Deduction on page 24.
Add back only the portion excluded from federal gross income while
Line 5 – Other Add-Backs you were an Indiana resident.
Each of the following add-backs has been assigned a 3-digit code
number. When reporting the add-back, write its name, the associated Meal Deduction Add-Back 149
3-digit number and the amount. If you:
• claimed a deduction for meal expenses with regard to food and
Conformity Add-Back beverages provided by a restaurant in computing your federal
Before this publication was finalized Indiana had not conformed to any adjusted gross income; AND
changes to the Internal Revenue Code (IRC) that may have become law • the deduction would have been limited to 50% of the meal
after March 31, 2021. Therefore, the IRC used to figure Indiana income expenses if the expenses had been incurred before Jan. 1, 2021,
may not wind up being the same as the IRC used to figure federal income. add back the amount deducted for federal purposes in excess of 50%
of the food or beverage expenses and deducted in determining your
This add-back is specific to these annual current year conformity Indiana adjusted gross income.
issues. If uncertainty exists as to whether or not Indiana will adopt
some or all of the federal legislation passed after March 31, 2021, Do not add back any amounts:
that acts to modify federal AGI, you may add-back those items as an • Claimed as an itemized deduction for federal income tax purposes; or
“other” add-back. In the event those items are adopted, an amended • Any amount for which an exception to the 50% limitation was in
return should be filed to recoup the add-back(s). effect for amounts paid before Jan. 1, 2021.
Conformity Add-Back – Positive Entry 120 Example. John owns 50% of Loud Speaker, Inc., an S corporation. Loud
This add-back is only for current year conformity issues. Conformity Speaker, Inc., incurs $20,000 in meal expenses during the taxable year.
issues for preceding tax years must be addressed on the add-back line John deducts his share of the meal expenses ($10,000) in computing
specific to the item in question. John’s federal adjusted gross income. The meal expenses do not qualify
for a federal exception from the 50% limitation under IRC § 274.
If the state legislature does not conform to federal code changes enacted
after March 31, 2021, you may have to amend your return at a later date Loud Speaker, Inc., apportions 20% of its income to Indiana. As a
to reflect any differences between Indiana and federal law. You may wish result, John deducts $2,000 (20% times $10,000) of the meal expenses
to periodically check DOR’s homepage at www.in.gov/dor for updates. in determining John’s Indiana adjusted gross income. If the 50-percent
limitation had been in effect, John’s Indiana adjusted gross income
Enter code 120 on Schedule B under line 5 if reporting this add-back. tax deduction would have been limited to $1,000. John is required to
add back $1,000 ($2,000 deduction minus $1,000 previously allowable
Conformity Add-Back – Negative Entry 147 deduction) in determining his Indiana adjusted gross income.
This add-back generally is based on conformity issues arising from a
previous year. However, in rare cases this can arise from conformity Student Loan Discharge Add-Back 150
issues arising in the current year where the IRC treats an item as If you had a student loan discharged during the taxable year and you
taxable or nondeductible that was previously exempt or deductible. excluded the amount of the discharge from your federal gross income,
add back the amount of discharged loans excluded from your federal
gross income. Do not add back amounts discharged or repaid via:
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Schedule B: Add-Backs Continued • Motorsports Entertainment Complex, Code 130
• Qualified Advance Mining Safety Equipment, Code 126
• The Public Service Loan Forgiveness program. • Qualified Electric Utility Amortization, Code 135
• The Teacher Loan Forgiveness Program. • Qualified Environmental Remediation Costs, Code 121
• The National Health Service Corps Loan Repayment Program. • Qualified Leasehold Improvement Property, Code 129
• Other programs that qualify under IRC section 108(f)(4). • Qualified Restaurant Improvement Property, Code 108
• A discharge granted to a borrower under the Closed School or • Qualified Retail Improvement Property, Code 109
Defense to Repayment discharge processes to the extent not • Start-Up Expenditures, Code 131
included in federal gross income.
• The death or total and permanent disability of the student. Required add-backs for the following modifications have been
• The discharge of the student loan in bankruptcy. eliminated, effective Jan. 1, 2016:
• If the student loan was discharged while the borrower was • Qualified Disaster Assistance Property, Code 110
insolvent. However, the discharge is limited to the amount the • Qualified Refinery Property, Code 111
borrower was insolvent. Further, if a loan is discharged under • Qualified Film or Television Production, Code 112
the other bullets, those discharges must be applied before the
insolvency exception. 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
Excess Federal Interest Deduction Modification 142 modification.
IRC Section 163(j) limits the federal interest deduction for most business
interest to 30% (50% for 2019 and 2020 in certain cases) of adjusted taxable Example. Grant has qualified restaurant equipment. For federal tax
income plus business interest. However, Indiana has decoupled from this purposes he used the accelerated 15-year recovery period for an asset
provision. Subtract an amount equal to the amount as a deduction for placed in service since 2009. Since 2009 Grant had been adding back
excess business interest under IRC Section 163(j) in the year in which the the depreciation expense taken for federal purposes that exceeded the
interest was first paid or accrued. If you are deducting any business interest amount allowable for Indiana purposes. The accumulated depreciation
carried over from a previous year, add the amount of this interest deducted. on such an asset through 2012 was, therefore, different for federal
Enter code 142 on Schedule B under line 5 if reporting this add-back. and state purposes. This difference will remain until the asset is fully
depreciated or until the time of its disposition.
Federal Repatriated Dividend Deduction
Add-Back 139 A simple illustration:
Untaxed foreign earnings and profits are repatriated dividends that Asset – acquired January, 2009 – qualified restaurant property –
need to be reported when filing state taxes. Individuals should add purchase price $120,000. This normally would have had a 39-year
back the deduction taken on federal Form 965, Line 17, and received recovery period; IRC Sec. 168 allows for a 15-year recovery period.
while an Indiana resident. Enter code 139 on Schedule B under line 5
if reporting this add-back. For additional information see Income Tax Asset acquired Jan. 2009 Federal Add- Indiana
Information Bulletin #116 at www.in.gov/dor/files/reference/ib116.pdf. $120,000 purchase price Depreciation Back Depreciation
Qualified Preferred Stock 113 Year 1 (2009) 8,000 4,924 3,076
If an individual: Year 2 (2010) 8,000 4,924 3,076
• had losses from the sale or exchange of preferred stock in either Year 3 (2011) 8,000 4,924 3,076
Federal National Mortgage Association or Federal Home Loan Year 4 (2012) 8,000 4,924 3,076
Mortgage Corporation;
• treated the loss from the sale or exchange as ordinary income Year 5 (2013) 8,000 8,000
0
for federal income tax purposes in the year the loss had been Accumulated Depreciation 40,000 20,304
incurred; and Year 6 – 15 80,000 80,000
0
• had any amount previously added back that not been allowed as a Accumulated Depreciation 120,000 100,304
deduction, Year 16 – 38
0 0 0
the individual is permitted to continue deducting the loss not Accumulated Depreciation
previously allowed as a capital loss. However, the amount allowable as Year 39 (or year of
0 -19,696 19,696
a capital loss must be computed in accordance with federal limitations disposition) Add-back
on allowable capital losses. See IRC sections 1211 and 121 for further
details on federal limitations. Enter code 113 on Schedule B under line Tax year 2012 is the last year Grant reported an add-back until the end of
5 if reporting this add-back. the recovery period. Had this asset been sold before being fully depreciated,
the catch-up modification would be reflected in the year of the sale. If this
Certain Discontinued Add-Backs: How and When to property is held through 2048 (the 39th year of depreciation), Grant will
Report a Final Catch-Up Modification. report a negative $19,696 catch-up add-back on his 2048 state tax return.
Required add-backs for the following modifications have been Enter the associated 3-digit code on Schedule B under line 5 if
eliminated, effective Jan. 1, 2013: reporting a final catch-up modification.
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Schedule C: Deductions Important. You cannot claim this deduction for property tax paid in
2022 if you are claiming the Lake County residential income tax credit
on Schedule F, line 6.
Schedule C: Deductions
How do I claim my deduction? Complete the information area on
Line 1 – Renter’s Deduction Schedule C, line 2. Enter the address of your principal residence where
You may be able to take the renter’s deduction if: the Indiana property tax was paid if it is different from the address on
• You paid rent on your principal place of residence, and the front of the return. If you had more than one principal residence
• You rented a place that was located in Indiana and subject to during the year, and you paid Indiana property tax on both residences,
Indiana property tax. list the additional residence on a separate piece of paper.
Your “principal place of residence” is the place where you have your true, Example. Jamie and Ella each owned their own home; they married
fixed, permanent home and where you intend to return after being absent. in 2022. They sold both of their Indiana homes during the year and
began renting. They are eligible to claim a property tax deduction on
If you rented a manufactured home in Indiana or paid rent for your the combined property taxes paid on both homes if they are filing a
manufactured home lot, you may claim the renter’s deduction if the joint return (limited to $2,500 altogether).
above requirements are met. Rent paid for summer homes or vacation • Enter the number of months you lived there. If you claim more
homes is not deductible. than one residence, enter the number of months lived at the other
residence(s) on a separate sheet of paper.
Important. You cannot claim the renter’s deduction if the rental • Enter the amount of Indiana property tax paid. If you lived in
property was not subject to Indiana property tax. more than one residence during the year, enter the combined
amount of Indiana property tax paid on all principal residences.
How do I report my deduction? First, complete the information area • Enter the smaller of $2,500 ($1,250 if married filing separately) or
by entering: the amount of Indiana property tax paid.
• The address where rented if it’s different from the address on the
front of the return (leave blank if it is not different), No double benefit allowed. If any portion of property taxes paid
• The landlord’s name and address, on your principal residence was deducted as an expense on federal
• The total amount of rent paid, and Schedule C, E or F, then do not deduct that amount on this line.
• The number of months you lived there.
Example. Jean paid $1,200 in Indiana property tax on her home. She
If you moved during the year or had more than one landlord, you used one room of her home for her business, and deducted $200
must list the same information for each place that you rented. Enclose Indiana property tax as an expense on her federal Schedule C. Jean
additional pages if necessary. is allowed a deduction of $1,000 ($1,200 minus the $200 deduction
already taken on federal Schedule C).
How much rent can I deduct? You can deduct up to $3,000 ($1,500 if
married filing separately) or the amount of rent paid, whichever is less. How do I find out how much I paid in Indiana property tax on my
principal residence? Indiana counties send statements to homeowners
Example. Bill paid $400 rent for his first apartment, which was located showing how much property tax is due on their property. Add together
in Indiana. He moved to another Indiana location during the year and the 2022 spring and fall installments, if you paid both of them.
paid $2,800 rent for the rest of the year. His deduction will be limited
to $3,000, even though he paid $3,200 altogether. Sometimes mortgage companies pay the Indiana property tax from an
escrow account. If your mortgage company pays it, they should send you
Important. Keep copies of your rental receipts, landlord identifying a Form 1098 (or its equivalent) showing the amount of property tax paid.
information and lease agreements as DOR can require you to provide
this information. Important. You must maintain copies of proof that you paid
your Indiana property tax as DOR can require you to provide this
For more information about this deduction, see Income Tax information. This could include the Form 1098, the property tax
Information Bulletin #38 at www.in.gov/dor/files/reference/ib38.pdf. statement from your local assessor’s office, cancelled checks, etc.
Line 2 – Homeowner’s Residential Property Tax Line 3 – State Tax Refund Reported on Federal Return
Deduction If you entered a state tax refund amount on federal Schedule 1, line
You may be able to take a deduction of up to $2,500 ($1,250 if married 1, and you reported it on Indiana Schedule A, Section 1, line 5B, then
filing separately) of the Indiana property taxes (residential real estate deduct that amount here.
taxes) paid on your principal place of residence. Your “principal place
of residence” is the place where you have your true, fixed home and Line 4 – Interest on U.S. Government Obligations
where you intend to return after being absent. Deduction
If you reported interest income on Indiana Schedule A, Section 1, line
Note. Property tax paid for summer homes or vacation homes is not 3B, you may be able to take a deduction. If any part of your interest
deductible.
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Schedule C: Deductions Continued 4. Nonresident Military Spouse Earned Income Deduction
A spouse of a nonresident military servicemember may not owe
income is from a direct obligation of the U.S. government, you can tax to Indiana on earned income from Indiana sources. See the
deduct this amount. Nonresident Military Spouse Earned Income Deduction on page 27
for more information.
Examples of U.S. government obligations include U.S. savings bonds,
U.S. Treasury bills and U.S. government certificates. Line 7 – Military Service Deduction (including the
National Guard and reserve component of the armed forces)
Interest income reported from a trust, estate, partnership or S Important. The military service deduction and the military retirement
corporation that is from U.S. government obligations should also be income and/or survivor’s benefits deduction are reported in two
deducted on this line. different places.
• You (and/or your spouse, if married filing jointly and both
Note. When certain U.S. savings bonds are redeemed to pay expenses qualify) will report your active, National Guard and/or reserve
for higher education, the interest may be excluded from federal military service income deduction here.
adjusted gross income. Therefore, do not enter any interest from • You (and/or your spouse, if married filing jointly and both
U.S. savings bonds that is shown on your federal Schedule B, line 3 qualify) will report your military retirement income and/or
(because it has already been excluded from income). survivor’s benefits deduction on Schedule 2 under line 11, Other
Deductions. See the instructions for Military Retirement Income
For more information about this deduction see Income Tax and Survivor’s Benefits Deduction on page 25.
Information Bulletin #19 at www.in.gov/dor/files/reference/ib19.pdf.
The income on line 21B of Schedule A may include military pay from
Lines 5 and 6 – Taxable Social Security and/or active duty, National Guard, and/or the reserve component of the armed
Railroad Retirement Benefits Deduction forces (reserve). If it does, you may be eligible to take this deduction.
Indiana does not tax Social Security income or tier 1 or tier 2 railroad
retirement benefits issued by the U.S. Railroad Retirement Board. The deduction will be the actual amount of your active duty, National
If you have included any of these benefits on Indiana Schedule A, Guard, and/or reserve military income or $5,000, whichever is less.
Section 1, line 11B or line18B, deduct those benefits on this line. If both you and your spouse received active, National Guard, and/
or reserve military income, you may each claim the deduction for a
Note. See the Railroad Unemployment and Sickness Benefits deduction maximum of $10,000 (up to $5,000 each).
instructions on page 27 if you have received unemployment and/or
sickness benefits from the Railroad Retirement Board. Example 1. Louis earned $25,000 from active service in the Army.
Brooklynn, his wife, earned $2,640 from the Indiana National Guard.
A Word About the Three Military Income Deductions Louis is eligible for the maximum $5,000 deduction; Brooklynn is
Military income recipients may be eligible to claim one or more of the eligible for a $2,640 deduction.
four deductions based on the type of income/benefits they get.
*Note. If you served in the reserve or the Indiana National Guard
1. Military Service Deduction (including the National Guard during the tax year, and you were deployed and mobilized for full-
and reserve component of the armed forces) time service, or during the period your Indiana National Guard unit
Individuals with military pay from active duty, National Guard, was federalized, then you may be eligible to claim the National Guard
and/or the reserve component of the armed forces, may be eligible and Reserve Component Members Deduction. See instructions for this
to deduct up to $5,000 of that income. See the Military Service deduction on page 26.
Deduction below to find out if you qualify for this deduction.
Example 2. Alec earned $1,504 from his service in the National Guard.
2. Military Retirement Income and/or Survivor’s Benefits His unit was federalized in September of the year; he earned $6,200 after
Deduction being federalized. Alec is eligible to claim two deductions based on the
Individuals with military retirement income and/or survivor’s income he earned. First, he will claim a $1,504 military service deduction
benefits may be eligible to deduct those benefits. See the on his Schedule C, Line 7. Second, he will claim the full $6,200 income
Military Retirement Income and/or Survivor’s Benefits Deduction earned after his unit was federalized, on Line 11, using code #621.
information on page 25 to see if you qualify.
Military income earned while in a combat zone is not taxable on your
3. National Guard and Reserve Component Members federal or state income tax returns. Since Indiana is not taxing this
Deduction income, your combat zone income is not eligible for a deduction.
This deduction is available for qualified military income received
after your Indiana National Guard unit is federalized or your Example 3. Jim was on active duty the first month of the year. He was
reserve component was mobilized and deployed for full-time stationed in a combat zone the rest of the year. His military W-2 form
service. See the National Guard and Reserve Component Members shows the first month’s regular military wage income of $1,250 in Box
Deduction on page 26 to see if you qualify for this deduction. 1. Only $1,250 of his income is taxed on his federal (and Indiana) tax
returns. Jim should claim a $1,250 military deduction (the lesser of the
income being taxed [$1,250] or $5,000).
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Schedule C: Deductions Continued Figure your deduction. If you made an unreimbursed education
expenditure during the year your deduction is:
Example 4. Mikayla is a member of the National Guard. She earned • $1,000; multiplied by
$7,250 from service in the National Guard from Jan. 1 through Oct. • the number of qualified dependent children for whom you made
31. Her guard unit was federalized for full-time service on Nov. 1, and education expenditures.
she earned an additional $4,800 through Dec. 31 of the year.
Example. Greg and Constance have three children ages 7, 9 and 11. The
Mikayla is eligible to claim both the Military Service Deduction and the two oldest children attend a private school. The youngest child attends
National Guard and Reserve Component Members Deduction. the neighborhood public school. The parents purchased schoolbooks
• First, she will claim the $5,000 maximum military service for all three children. They will be eligible for a $2,000 deduction (the
deduction on Schedule C, line 7, based on the $7,250 income youngest does not qualify as he attends a public school).
earned through Oct. 31.
• Second, she will claim the National Guard and Reserve Note. A qualifying child may be claimed for this deduction only
Components Deduction of $4,800 (full amount of income earned once per year. For example, if a husband and wife are married and
after her unit was federalized) under line 11. filing separately, whichever parent is eligible to claim the child as a
dependent for exemption purposes is eligible to claim this deduction.
Important. You must enclose your military W-2 form(s) if you are
claiming this deduction. Line 9 – Indiana Net Operating Loss Deduction
You may take a deduction for the Indiana portion of the federal net
For more information about this deduction see Income Tax operating loss deduction reported on federal Form 1040/1040-SR.
Information Bulletin #27 at www.in.gov/dor/files/reference/ib27.pdf. (This will be a net operating loss deduction from an earlier year(s)
carried forward to 2022.)
Line 8 – Private School/Homeschool Deduction
You may be eligible for a deduction based on education expenditures Complete Schedule IT-40NOL to determine the amount available to
paid for each dependent child who is enrolled in a private school or is be deducted this year. Make sure to enter the amount you are eligible
homeschooled. to deduct as a positive figure.
Dependent Child Qualifications Note. It is possible to have an Indiana NOL without also having a
• Your dependent child must be eligible to receive a free elementary federal NOL. See Schedule IT-40NOL, which can be found at www.
or high school education (K-12 range) in an Indiana school in.gov/dor/tax-forms/2022-individual-income-tax-forms, for more
corporation; information. For years prior to 2022, the modifications required to
• You must be eligible to claim the child as a dependent on your compute an Indiana NOL may have changed after publication of
federal tax return; and the IT-40NOL for the prior year. See the instructions for a list of
• The child must be your natural or adopted child or, if not, modifications required for each year and, if necessary, revise the IT-
you must have been awarded custody of the child in a court 40NOL for changes in modifications.
proceeding making you the court appointed guardian or
custodian of the child. Enclose Schedule A from federal Form 1045 and a completed Indiana
Schedule IT-40NOL when claiming this deduction. If your Schedule A
Education expenditure. This refers to any expenditures made in from federal Form 1045 included itemized deductions to increase the
connection with enrollment, attendance, or participation of your federal net operating loss, enclose a pro forma copy of the Schedule A
dependent child in a private elementary or high school education computing the net operating loss without the itemized deductions.
program. The term includes tuition, fees, computer software, textbooks,
workbooks, curricula, school supplies (other than personal computers), Also, maintain with your records a copy of the federal Form
and other written materials used primarily for academic instruction or 1040/1040-SR from the loss year as DOR can require you to provide
for academic tutoring, or both. The term does not include the delivery this information at a later date.
of instructional service in a home setting to your dependent child who
is enrolled in a school corporation or a charter school. Line 10 – Nontaxable Portion of Unemployment
Compensation
A “private elementary or high school education program” means You may be eligible for a deduction if you reported unemployment
attendance at a nonpublic school (including a private school, a compensation while being an Indiana resident. Complete the
parochial school and a homeschool) in Indiana that satisfies a child’s worksheet on page 23 to figure your deduction.
obligation for compulsory attendance at a school.
Important. Do not include any unemployment compensation issued
The obligation for “compulsory attendance” means a child must be in by the U.S. Railroad Retirement Board on line 1 of the worksheet.
attendance in a school (public and/or private) for a minimum of 180 Instead, see the instructions for the Railroad Unemployment and
days in a calendar year. Sickness Benefits Deduction on page 27 for more information.
Note. No deduction will be available based on a child who is enrolled
in school for a period of less than 180 days in a calendar year.
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Schedule C: Deductions Continued Step 2
Enter the lesser of the taxable amount of your
Line 11 – Other Deductions annuity or $16,000 .............................................................. 2A $6,000
Each of the following deductions has been assigned a 3-digit code Enter the total of your Social Security and tiers 1 and 2
number. When claiming the deduction on Schedule C under line 11, Railroad Retirement income .............................................. 2B - $1,200
write the name of the deduction, the three-digit code number and the Tentative allowable deduction .......................................... 2C $4,800
amount claimed.
Step 3
Civil Service Annuity Deduction 601 Multiply the amount on Line 1C (1.00) by the amount on Line 2C
The income on Indiana Schedule A, Section 1, line 11B includes ($4,800) = $4,800. This is your deduction.
federal civil service annuity payments, you may be eligible to take a
deduction if you were at least 62 years of age by the end of the tax year Both spouses receive a civil service annuity. If you receive a civil
and/or a surviving spouse of a civil service annuitant. service annuity both for yourself and as a surviving spouse, the
combined deduction cannot exceed $16,000.
For each civil service annuitant, the deduction is limited to:
• The lesser of the amount of taxable civil service annuity income Example. Matthew and Claire, both age 68, file a joint federal and state
included in federal adjusted gross income or $16,000, income tax return. They each receive a civil service annuity and Social
• Less all amounts of Social Security income and tier 1 and tier 2 Security income. They moved from Indiana to Arizona on July 1 of the
Railroad Retirement income (issued by the Railroad Retirement tax year.
Board) received by the civil service annuitant (as reported on
federal Form 1040/1040-SR, lines 5a and 6a), Matthew’s taxable civil service annuity is $13,700, which he reported on
• Multiplied by the ratio of civil service annuity income taxable to Schedule A, Line 11A. He reported the $6,850 portion received while he
Indiana as compared to all taxable civil service annuity income. was an Indiana resident on Line 11B. He also received $9,500 in Social
Security income while residing in Indiana. Since his Social Security
Example. You were a full-year Indiana resident (your spouse was a income (received while an Indiana resident) is greater than the annuity
part-year resident). The taxable amount of your civil service annuity received while an Indiana resident, he is not eligible for a deduction.
reported on Schedule A, Lines 11A and 11B is $6,000. You received
$1,200 in Social Security income. You are age 67. Claire’s taxable civil service annuity is $21,900, which she reported on
Schedule A, Line 11A. She reported the $10,950 portion received while
Figure your deduction by using the following three-step method: she was an Indiana resident on Line 11B. She also received $6,300 in
Social Security income while living in Indiana.
Step 1
Enter your amount of civil service annuity from Here is how to figure Claire’s deduction.
Schedule A, line 11B .......................................................... 1A $6,000
Enter your amount of civil service annuity from Step 1
Schedule A, line 11A ...........................................................1B $6,000 Enter Claire’s civil service annuity from
Divide line 1A by line 1B (if the result is zero or less, Schedule A, line 11B .......................................................... 1A $10,950
STOP; there is no deduction) ........................................... 1C 1.00 Enter Claire’s civil service annuity from
Schedule A, line 11A ...........................................................1B $21,900
Divide line 1A by line 1B ................................................... 1C .50
Unemployment Compensation Worksheet
Note: If you were married but filing separately, and you lived with your spouse at any time during the year, enter -0- on line 3 of the worksheet.
However, if you were married but filing separately, and lived apart from your spouse the entire year, enter $12,000 on line 3.
1. Unemployment compensation included on Schedule A, line 17B (do not include any unemployment
compensation issued by the Railroad Retirement Board - see instructions) ............................................... 1
2. Federal adjusted gross income from federal Form 1040, line 11 ................................................................ 2
3. Enter $12,000 if single, or $18,000 if married filing a joint return ................................................................ 3
4. Subtract line 3 from line 2. If zero or less, enter -0- .................................................................................... 4
5. Enter one-half of the amount on line 4 (divide line 4 by the number 2) ....................................................... 5
6. Taxable unemployment compensation for Indiana purposes: enter the amount from either line 1
or line 5, whichever is smaller ..................................................................................................................... 6
7. Subtract line 6 from line 1. Carry this amount to Schedule C, line 10 ......................................................... 7
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Schedule C: Deductions Continued Note. Social Security disability income does not qualify for this
deduction because Indiana does not tax this income.
Step 2
Enter the lesser of the taxable amount of Claire’s Enter code 602 on Schedule C under line 11 if claiming this deduction.
annuity or $16,000 .............................................................. 2A $16,000
Enter the total of Claire’s Social Security and Employer Student Loan Payment Interest
tiers 1 and 2 Railroad Retirement income .......................2B - $6,300 Deduction 637
Tentative allowable deduction .......................................... 2C $9,700 If you are required to add back employer-paid student loan payment
using Code 148, you are permitted to deduct the amount of student
Step 3 loan interest that:
Multiply the amount on Line 1C (.50) by the amount on Line 2C • was paid by your employer, and
($9,700) = $4,850. This is Claire’s deduction. • you would have been permitted to deduct if federal law did not
disallow that deduction.
Surviving Spouse
A surviving spouse may be eligible to claim this deduction. There Complete Worksheet 4-1 provided in IRS Publication 970 to
is no age requirement for the surviving spouse. However, if you are determine the amount (if any) of additional interest allowable for
a surviving spouse receiving a civil service annuity based on your Indiana purposes, but not in excess of $2,500 total. When completing
service and also receive a civil service annuity based on your deceased Worksheet 4-1, do not add back amounts required to be added to
spouse’s service, the combined deduction cannot exceed $16,000. Indiana adjusted gross income using Code 148. This deduction cannot
exceed the amount you are required to add back using Code 148.
You must maintain Form CSA 1099-R with your records as DOR can
require you to provide it at a later date. Enterprise Zone Employee Deduction 603
Certain areas within Indiana have been designated as enterprise zones.
For more information about this deduction see Income Tax Enterprise zones are established to encourage investment and job
Information Bulletin #6 at www.in.gov/dor/files/reference/ib06.pdf. growth in distressed urban areas.
Enter code 601 on Schedule 2 under line 11 if claiming this deduction. Your employer will provide Form IT-40QEC to you if you are eligible
to claim this deduction. The amount of the deduction is one-half of
COVID-related Employee Retention Credit Disallowed the earned income shown on Form IT-40QEC or $7,500, whichever is
Expenses Deduction 634 less. If you and your spouse both have received Form IT-40QEC, you
If you had a deduction that was disallowed for federal purposes may each take this deduction for a combined maximum of $15,000
because you claimed a federal COVID-related employee retention (no more than $7,500 per qualifying person). You must maintain
credit, deduct the amount disallowed for federal purposes. The Form IT-40QEC with your records.
deduction is limited to the amount that would have been deductible
for Indiana adjusted gross income tax purposes. Do not deduct any Enter code 603 on Schedule C under line 11 if claiming this deduction.
amounts for amounts disallowed for non-COVID related employee
retention credits such as disaster-related employee retention credits. Government or Civic Group Capital Contribution
Deduction 633
For 2022, this should only be deducted if the deduction is derived A deduction is available for certain capital contributions made by a
from a pass through entity that has a fiscal year beginning in 2021. government or civic group. Deduct any eligible contributions as listed on
a Schedule K-1 you received from an S corporation, or from an estate or
Disability Retirement Deduction 602 trust that owns a portion of an S corporation AND through which you are
To take this deduction you must have been: receiving a distribution. You must maintain a copy of the Schedule K-1(s)
• Permanently and totally disabled at the time of retirement, with your records as DOR can require you to provide it at a later date.
• Retired on disability before the end of the tax year, and
• Received disability retirement income during the tax year. Enter code 633 on Schedule C under line 11 if claiming this deduction.
If you meet these qualifications, you must complete Schedule IT-2440 Human Services Deduction 605
and have it signed by your doctor to claim this deduction. You must The human services deduction is intended to eliminate any individual
maintain the completed Schedule IT-2440 with your records as DOR income tax imposed on Medicaid recipients who are living in a:
can require you to provide it at a later date. • Hospital,
• Skilled nursing facility,
For more information about this deduction see Income Tax • Intermediate care facility,
Information Bulletin #70 at www.in.gov/dor/files/reference/ib70.pdf • Licensed county home,
and Schedule IT-2440 at www.in.gov/dor/tax-forms/2022-individual- • Licensed boarding or residential home, or
income-tax-forms. • Certified Christian Science facility.*
This deduction is limited to a maximum of $5,200 per qualifying The goal of the human services tax deduction is to reduce the affected
individual. individual’s adjusted gross income tax liability to zero (-0-).
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Schedule C: Deductions Continued was not available. Do not deduct any bond interest that is excluded from
federal gross income. In addition, if you sell the bond, do not deduct any
*An eligible Christian Science facility must be listed with and certified amounts for which the bond is sold in excess of your purchase price. See
by the Commission for Accreditation of Christian Science Nursing IC 6-8-5-1 for further information regarding the deduction.
Organizations/Facilities, Inc.
Indiana Partnership Long-Term Care Policy Premiums
Generally, the deduction should not be used in conjunction with most Deduction 608
tax credits in order to create a refund. If you are a Medicaid recipient You may take a deduction for the amount of premiums paid for
and live in one of the facilities listed above, to determine whether you Indiana partnership long-term care insurance. If you are a married
are eligible for the deduction you must first prepare your tax return individual filing separately, you may not claim a deduction for
without claiming a human services deduction. Generally, if a refund amounts paid by or on behalf of your spouse.
is due, you are not eligible for a deduction. File your return without
claiming the deduction and a refund will be issued. However, if an Important. The Indiana partnership policy will have the following box
amount is due, you are eligible to use a deduction. of information on the outline of coverage, the application or on the
front page of the policy.
Enter code 605 on Schedule C under line 11 if claiming this deduction.
This policy qualifies under the Indiana Long-Term Care program for
Indiana Education Scholarship Account Deduction 635 Medicaid Asset Protection. This policy may provide benefits in excess of
A deduction is available if you received an annual grant amount
the asset protection provided in the Indiana Long-Term Care program.
distributed to your Indiana education scholarship account that is used
to pay for qualified expenses. See IC 20-51.5-2-9 for a list of qualified
If the information shown in the box above is not located in a box on
expenses. Do not deduct any grants that are not included in your
your policy, you do not have a qualifying policy, and are not eligible
federal gross income. Also, if the grant is used to pay for items other
to take this deduction. The deduction is the amount of premiums paid
than qualified expenses, do not deduct the amount of those payments.
during the year on the policy for the taxpayer and/or spouse.
Indiana Enrichment Scholarship Account
No double benefit allowed. Certain self-employed individuals will
Deduction 638
claim these premiums as a deduction on federal Schedule 1, under
A deduction is available if you received an annual grant amount
Part II. The Indiana deduction will be the actual amount of these
distributed to your Indiana enrichment scholarship account that is
premiums paid, minus any amount of these already reported on
used to pay for qualified expenses. Qualified expenses are enrichment
federal Form 1040/1040-SR.
materials, activities, or programs approved by the Indiana Department
of Education to improve student proficiency in math or reading. Do
More information about this program is available at www.in.gov/iltcp.
not deduct any grants that are not included in your federal gross
income. Also, if the grant is used to pay for items other than qualified
Important. Keep a copy of the premium statements as DOR can
expenses, do not deduct the amount of those payments.
require you to provide this information. Enter code 608 on Schedule C
under line 11 if claiming this deduction.
Indiana Lottery Winnings Annuity Deduction 629
You may be eligible to deduct annuity payments received from a
Infrastructure Fund Gift Deduction 631
winning Hoosier Lottery ticket for a lottery held prior to July 1, 2002.
A deduction is available for certain contributions made to a regional
This deduction applies only to prizes won from the Hoosier Lottery
development infrastructure fund. You should keep detailed records of
Commission; proceeds from other state lotteries or from other
the contribution as DOR can require you to provide this information
gambling sources, such as casinos, are not deductible. In addition,
at a later date.
proceeds from winning Hoosier Lottery tickets for lotteries held after
June 30, 2002, are not deductible.
Enter code 631 on Schedule C under line 11 if claiming this deduction.
Example. Jennifer won $2,000,000 playing the Hoosier Lottery with
Military Retirement Income and/or Survivor’s Benefits
a ticket purchased in June of 2002. She elected to receive annual
Deduction 632
installment payments of $100,000. She received the payment before
The income on line Indiana Schedule A, line 21B may include military
moving out-of-state, and reported the income on Indiana’s Schedule A,
retirement income and/or survivor’s benefits. If it does, you (and/or
line 20B. She is eligible to claim the full $100,000 deduction.
your spouse, if married filing jointly and both qualify) may be eligible
to take this deduction. For 2022 and later, the deduction is equal to the
Enter code 629 on Schedule C under line 11 if claiming this deduction.
entire amount of military retirement income and/or survivor’s benefits.
Indiana-only Tax-exempt Bonds Deduction 636
Important. You must enclose your military retirement income
If you had interest from a bond issued by or in the name of certain
statement(s) and/or survivor’s benefit statement(s) with the tax return
Indiana government subdivisions or entities or amounts received upon
if you are claiming this deduction.
maturity of the bond, deduct any interest or other income included in
federal gross income. Deduct only that portion of interest or other income
For more information about this deduction see Income Tax
that would be included in Indiana adjusted gross income if this deduction
Information Bulletin #6 at www.in.gov/dor/files/reference/ib06.pdf.
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Schedule C: Deductions Continued What is Qualified Military Income?
Qualified military income is military wages paid to a member of a
National Guard and Reserve Component Members reserve component of the armed forces or the Indiana National Guard
Deduction 621 for the period during the member’s full-time service in a reserve
(Also see the Military Service Deduction on page 21.) component of the armed forces or the period when Indiana National
Guard unit is federalized.
There is a deduction available for certain Indiana residents who are
members of the reserve components of the armed forces and the Note. You cannot claim both this deduction and the Military Service
Indiana National Guard. If you are eligible (based on the requirements Deduction (see page 21) based on the same income. See the
listed below), your deduction is the qualified military income* received following example.
during the period you were deployed and mobilized for full time service,
or during the period your Indiana National Guard unit was federalized. Example. Brandon is a member of the Indiana National Guard.
• From January through Oct. 15, Brandon earned $6,000 from the
1“Mobilization” includes assembling and organizing personnel guard.
and material for active duty military forces, activating the Reserve • His unit was federalized on Oct. 16. He earned $7,000 from that
Component (including federalizing the National Guard), extending point through Dec. 1.
terms of service, surging and mobilizing the industrial base and • His unit was assigned to a combat zone on Dec. 2, and he earned
training bases, and bringing the Armed Forces of the United States to $3,000 from then until the end of the year.
a state of readiness for war or other national emergency. • Brandon’s military W-2 shows $13,000 in Box 1, Wages, tips, other
compensation (the combat zone income is not included in Box 1
*Servicemembers serving on full time orders in an Active Guard and because it is not taxable).
Reserve Program (AGR) are not considered mobilized for purposes of
claiming their income as qualified military income. Brandon is eligible for both Indiana military deductions.
• First, he will claim the $5,000 maximum Military Service
2“Deployment” is the relocation of forces and material to desired Deduction on Schedule C, line 7, based on the $6,000 income
operational areas. Deployment encompasses all activities from origin earned through Oct. 15.
or home station through destination, specifically including intra- • Second, he will claim the National Guard and Reserve Components
continental U.S., inter-theater, and intra-theater movement legs, Deduction of $7,000 (full amount of income earned after his unit
staging, and holding areas. was federalized) under line 11.
If you meet the qualifications listed below, you will want to deduct that Note. He will not deduct the $3,000 income earned while stationed in
qualified military income here (unlike the Military Service Deduction, a combat zone because it was not taxed to begin with.
there is no ceiling on the amount of this kind of income which is
eligible for a deduction). Military withholding statements must be attached to the tax return
when claiming this deduction.
Who is Eligible?
You must be an Indiana resident who is a member of the reserve Note. DOR may request copies of your military orders to help
components of: determine eligibility.
• the Army;
• the Navy; Enter code 621 on Schedule C under line 11 if claiming this deduction.
• the Air Force;
• the Coast Guard; Nonresident Military Spouse Earned Income
• the Marine Corps; or Deduction 625
• the Merchant Marine. A spouse of a nonresident military servicemember may not owe tax to
Indiana on earned income from Indiana sources. The spouse may be
Or, a member of: eligible to claim a deduction if:
• the Indiana Army National Guard; or • Indiana is not the military servicemember’s state of domicile as
• the Indiana Air National Guard. reported on the servicemember’s Form DD-2058;
• The military servicemember and spouse are domiciliaries of the
What is Eligible to be Deducted? same state;
If you are eligible, your deduction is the qualified military income* • The military servicemember is in Indiana on military orders;
received during the period you were deployed and mobilized for full • The military servicemember’s spouse is in Indiana in order to live
time service, or during the period your Indiana National Guard unit with the servicemember, and resides at the same address; or
was federalized. • The military servicemember and spouse live together in a state
other than Indiana, but the servicemember’s spouse works in
*Military income received due to service in a combat zone is not taxable Indiana; and
on your federal or state income tax returns. Since Indiana is not taxing • The Indiana-source income is included on Indiana Schedule A on
this income, your combat zone income is not eligible for this deduction. line 1B, 2B and/or 7B.
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Schedule C: Deductions Continued Enter code 624 on Schedule C under line 11 if claiming this deduction.
To claim this deduction you must enclose a completed Schedule Recovery of Deductions 616
IN-2058SP, which is available at www.in.gov/dor/tax-forms/2022- You are not eligible for this deduction if you did not complete the
individual-income-tax-forms. “other income” line 20B on Indiana Schedule A: Section 1.
Enter code 625 on Schedule C under line 11 if claiming this deduction. Generally, Indiana does not allow you to claim itemized deductions
from federal Schedule A. However, if you reported recovered itemized
Olympic/Paralympic Medal Winners Deduction 627 deductions as “other income” on line 8 of your federal Schedule 1,
You are eligible for a deduction if, while an Indiana resident, you won use the portion of that amount also reported on Indiana Schedule A,
a gold, silver and/or bronze medal from participating in the Olympic/ Section 1, line 20B as a deduction on this line.
Paralympic games. The deduction equals the value of the medal(s)
won plus the amount of income received during the taxable year from Enter code 616 on Schedule C under line 11 if claiming this deduction.
the United States Olympic Committee as prize money for winning
the Olympic medal(s). If these amounts were previously deducted or Repayment of Previously Taxed Income Deduction 630
excluded in determining your federal adjusted gross income, you are not You may be eligible to claim a deduction for the repayment of
permitted this deduction for the amounts that were excluded or deducted previously taxed income, also known as “claim of right,” if:
in determining your federal adjusted gross income. This deduction may • You reported the income to Indiana in a previous year,
be claimed only in the tax year in which the medal was won. • You repaid some or all of it this year, and
• For federal tax purposes, you are eligible to:
Enter code 627 on Schedule C under line 11 if claiming this deduction. ο claim the repayment as an itemized deduction, or
ο claim a credit based on the repayment amount.
Qualified Patents Income Exemption Deduction 622
Some of the income from qualified patents included in federal taxable Important. If you filed an Indiana state tax return and reported
income may be exempt from Indiana adjusted gross income tax. A income that was paid back in a later tax year, you may be eligible for
qualified patent is a utility patent or a plant patent issued after Dec. a deduction even if you weren’t otherwise required to file an Indiana
31, 2007, for an invention resulting from a development process state tax return in the year you paid it back.
conducted in Indiana. The term does not include a design patent.
Example 1. Ryan was a full-year Indiana resident in 2021, and received
The exemption includes licensing fees or other income received for the $1,700 unemployment compensation that year. He reported the full
use of the patent, royalties received for the infringement, receipts from amount on his 2021 federal and Indiana income tax returns. Ryan
the sale of a qualified patent, and income from the taxpayer’s own use moved to and became a resident of Arkansas in October of 2022.
of the patent to produce the claimed invention.
Ryan found out he had to repay $345 of that compensation, which he
You must maintain the completed Schedule IN-PAT with your records as repaid in July of 2022. For 2022 federal tax purposes he is eligible to
DOR can require you to provide it at a later date. You may get Schedule claim an itemized deduction* based on the $345 amount repaid. Ryan
IN-PAT at www.in.gov/dor/tax-forms/2022-individual-income-tax-forms. is eligible to claim the $345 amount as a repayment of previously taxed
income as a deduction on his 2022 Indiana state tax return, Form IT-
For more information about this deduction see Income Tax 40PNR, even if he is not otherwise required to file with Indiana.
Information Bulletin #104 at www.in.gov/dor/files/reference/ib104.pdf.
*In this example Ryan is not required to claim itemized deductions
Enter code 622 on Schedule C under line 11 if claiming this deduction. when figuring his federal taxable income; he may have opted to use the
standard deduction instead. Regardless, he is still eligible to claim the
Railroad Unemployment and Sickness Benefits deduction on his state tax return.
Deduction 624
Benefits issued by the U.S. Railroad Retirement Board are not taxable Note. An adjustment will need to be made if an unemployment
by Indiana. compensation deduction was claimed on the return in the year the
income was reported. To do this, reduce the amount previously
Deduct unemployment and/or sick pay benefits issued by the U.S. reported by the amount repaid; refigure the deduction based on the
Railroad Retirement Board on this line if: reduced amount. Subtract the difference from the repayment amount
• You included these benefits as taxable income on Indiana to be deducted.
Schedule A: Section 1, Column B, and
• You did not already deduct these benefits on Schedule C, lines 5 Example 1, continued. Ryan claimed a $73 unemployment
and/or 6. compensation deduction on his 2021 state tax return. He refigured
the deduction based on the reduced $1,355 compensation ($1,700 -
Do not include any supplemental sick pay benefits on this line. $345), which reduced the deduction by $15. Ryan will report the $330
net difference ($345 repayment minus the $15 reduced deduction
Make sure to keep the statements (such as Form 1099G) issued by the amount) as the repayment of previously taxed income deduction.
U.S. Railroad Retirement Board as DOR may request them at a later date.
IT-40PNR Booklet 2022 Page 27
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Schedule C: Deductions Continued Lines 2 and 3 – Exemptions for dependents;
Additional exemptions for certain dependent children
Important. While no corresponding state credit for the repayment of Read the following information to see if you are eligible to claim any
previously taxed income is available, a deduction based on the amount dependents. If you are, complete Schedule IN-DEP after reviewing
repaid is. these steps.
Example 2. In 2022 Cynthia repaid $3,400 of income originally • Step 1 Do You Have a Qualifying Child?
reported on her 2021 federal and Indiana state tax returns. She • Step 2 Is Your Qualifying Child Your Dependent?
claimed a credit on her 2022 federal tax return based on the $3,400 • Step 3 Is Your Qualifying Relative Your Dependent?
amount repaid. Cynthia is eligible to claim the $3,400 amount as a
deduction on her Indiana state tax return. Step 1 Do You Have a Qualifying Child?
A qualifying child is a child who is your…
Example 3. Ashley moved to Indiana in 2021, and filed her first state
tax return with Indiana that year. In 2022 she repaid $2,700 income Son, daughter, stepchild, foster child, brother, sister, stepbrother,
originally reported on her 2020 federal income tax return. Since this stepsister, half brother, half sister, or a descendant of any of them (for
income was not reported to Indiana in 2020, she is not eligible to claim example, your grandchild, niece, or nephew)
a deduction for the amount of the repayment.
AND, was…
Important. Indiana does not tax Social Security income. Therefore,
any amount of Social Security income repaid in a subsequent year is • Under age 19 at the end of the year and younger than you (or your
not eligible for a deduction (since Indiana has not previously taxed spouse, if filing jointly), or
this income). • Under age 24 at the end of the year, a student (defined later), and
younger than you (or your spouse, if filing jointly), or
Note. Keep a copy of your records detailing the required repayment as • Any age and permanently and totally disabled (defined later)
DOR can require you to provide this information at a later date.
AND, who…
Enter code 630 on Schedule under line 11 if claiming this deduction.
• Didn’t provide over half of his or her own support for the year
(see Income Tax Information Bulletin #117),
Exemptions • Is not filing a joint return for the year, or is filing a joint return
Exemptions may be claimed on the Indiana return. Categories include for the year only as a claim for refund of withheld income tax or
exemptions for: estimated tax paid (see Income Tax Information Bulletin #117 for
1. You, and your spouse, if married filing jointly details and examples),
2. Certain dependents • Lived with you for more than half the year. If the child didn’t live
3. Certain dependent children (additional) with you for the required time, see Exception to time lived with
4. Certain adopted children you, later.
5. Age 65 or older and/or blind
6. Additional age 65 or older (based on income) Caution. If the child meets the conditions to be a qualifying child of any
other person (other than your spouse if filing a joint return) for the year, or
While you will need to complete Schedule D to list all of your the child was married, see Qualifying child of more than one person, later.
exemptions, you will also need to complete Schedule IN-DEP if
claiming any dependents. If you are claiming any adopted dependents, Do you have a child who meets the conditions to be your qualifying child?
you will also need to complete Schedule IN-DEP-A.
Yes. Go to Step 2.
No. Go to Step 3.
Schedule D: Exemptions
Step 2 Is Your Qualifying Child Your Dependent?
Line-by-line instructions.
1. Was the child a U.S. citizen, U.S. national, U.S. resident alien, or
a resident of Canada or Mexico? (See Income Tax Information
Line 1 – Exemptions for taxpayer, spouse (if married
Bulletin #117 for the definition of a U.S. national or U.S. resident
filing jointly)
alien. If the child was adopted, see Exception to citizen test, later.)
If you are married filing jointly, enter $2,000 on this line. All other
filers* should enter $1,000 on this line.
Yes. Continue.
No. STOP. You cannot claim this child as a dependent.
*Important. Enter $1,000 on this line even if you are claimed on
someone else’s tax return, such as a parent or guardian.
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Schedule D: Exemptions Continued 3. Was your qualifying relative married?
2. Was the child married? Yes. See Married person, later.
No. Continue.
Yes. See Married Person, later.
No. Continue. 4. Could you or your spouse if filing jointly, be claimed as a dependent
on someone else’s tax return this year? See Steps 1 and 2.
3. Could you, or your spouse if filing jointly, be claimed as a
dependent on someone else’s tax return? See Steps 1 and 2. Yes. STOP. You cannot claim any dependents.
No. You can claim this person as a dependent. See Schedule IN-DEP
Yes. STOP. You cannot claim any dependents. instructions below.
No. You can claim this child as a dependent. See Schedule IN-DEP
instructions below. If you are eligible to claim one or more dependent from Step 2
and/or Step 3, complete Schedule IN-DEP. If one or more claimed
Step 3 Is Your Qualifying Relative Your Dependent? dependent is adopted, see instructions for IN-DEP-A.
A qualifying relative is a person who is your…
Line 4 – Age 65 or Older or Blind
• Son, daughter, stepchild, foster child, or a descendant of any of If you and/or your spouse (if filing a joint return) are age 65 or older,
them (for example, your grandchild), or you and/or your spouse can take an additional $1,000 exemption. If
• Brother, sister, half brother, half sister, half brother, half sister, or a son you and/or your spouse (if filing a joint return) are legally blind, you
or daughter of any of them (for example, your niece, or nephew), or and/or your spouse can take an additional $1,000 exemption. Place an
• Father, mother, or an ancestor of sibling of either of them (for “X” in the boxes that apply to you and/or your spouse. Enter the total
example, your grandmother, grandfather, aunt or uncle), or number of boxes marked on this line and multiply by $1,000.
• Any other person (other than your spouse) who lived with you
all of the year as a member of your household if your relationship Line 5 – Additional Exemption for Age 65 or Older
does not violate local law. If the person did not live with you for An additional $500 exemption is available for you and/or your spouse
the required time, see Exception to time lived with you, later. (if filing a joint return) if you are age 65 or older and the amount
on Indiana Schedule A, line 36A, is less than $40,000 (or if you are
AND, who… married filing separately and the amount on Indiana Schedule A, line
36A, is less than $20,000). Place an “X” in the boxes that apply to you
• Was not a qualifying child (see Step 1) of any taxpayer during the and/or your spouse. Enter the total number of boxes marked on this
year. For this purpose, a person isn’t a taxpayer if he or she isn’t line and multiply by $500.
required to file a U.S. income tax return and either doesn’t file
such a return or files only to get a refund of withheld income tax Line 6 - Additional Exemptions for Adopted Child
or estimated tax paid. See Income Tax Information Bulletin #117 If you are claiming additional exemptions for one or more qualifying
for details and examples. adopted children, enter the number of qualifying children listed on
• Had gross income of less than $4,400 during the year. If the Schedule IN-DEP-A. Do not enter the number of boxes marked for
person was permanently and totally disabled, see Exception to parents.
gross income test, later.
Line 8 – Proration Amount
AND, for whom … At the top of the back of Indiana Schedule A is the Proration Section.
The number in Box 21D represents the percentage of your total
You provided over half of his or her support during the year. But see income being taxed by Indiana. For example, .450 means that Indiana
Children of divorced or separated parents, Multiple support agreements, is taxing 45% (.45) of your total income. Enter the amount from Box
and Kidnapped child, later. 21D on Schedule D, line 8.
1. Does any person meet the conditions to be your qualifying relative? Multiply the line 7 total by the amount on line 8; enter the result on
line 9.
Yes. Continue.
No. STOP. You cannot claim this person as a dependent. Example. If line 7 is $1,000 and line 8 is .450, your line 9 total
exemptions will be $450. Since Indiana is taxing 45% (.45) of your
2. Was your qualifying relative a U.S. citizen, a U.S. national, total income, you’re allowed to deduct 45% of your total exemptions.
U.S. resident alien, or a resident of Canada or Mexico? (See
federal Publication 519 for the definition of a U.S. national or See instructions for the Proration section on page 15 for more
U.S. resident alien.) If your qualifying relative was adopted, see information.
Exception to citizen test, later.
Yes. Continue
No. STOP. You cannot claim this person as a dependent.
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Schedule IN-DEP Instructions An additional $1,500 exemption is allowed for certain dependent
children. Carefully read the following Dependent child definition below
to see if you are eligible for this additional exemption(s).
Schedule IN-DEP Instructions
You must complete and enclose Schedule IN-DEP if you are claiming Dependent child definition. According to state statute, to be eligible
any dependents on lines 2 and/or 3 of Schedule D. for this exemption a dependent child must be a son, stepson, daughter,
stepdaughter, foster child, child for whom you are a legal guardian,
Question 1. Did you answer “No” to STEP 2, question 3 above? If so, and/or your spouse’s child, if filing a joint return. He/she must be
you are eligible to claim the qualifying child (children) as a dependent. either under the age of 19 by the end of the tax year, or be a full-time
Read the Lines 1 through 5 instructions below. If not, skip to Question student who is under the age of 24 by the end of the tax year.
2 below.
If any dependent included in Box 6 on this schedule also meets
Lines 1 through 5 the Dependent child definition above, place an “X” in box E on the
For each qualified dependent child, enter his or her: line where the dependent is listed (see following example). Add the
• First and last name in Box A and Box B. number of box E’s containing an “X”. Enter that number in Box 7,
• Nine-digit Social Security number (SSN) in Box C. which is located at the bottom of the schedule.
• Date of birth in Box D.
Example 3. Cooper and Grace Doe (see Example 1 above) are eligible
See Additional Dependent Exemptions below to determine whether or to claim the additional dependent exemption for their daughter
not to complete line E. Tatum. They should enter an “X” on Line 1E.
Dep. First Name Dep. Last Name
Example 1. Cooper and Grace Doe are eligible to claim their daughter 1A Tatum 1B Doe
Tatum as a dependent on Schedule IN-DEP. Here is how they will
complete line 1:
Dependent’s SSN Dependent’s DOB
Dep. First Name Dep. Last Name 1C 123 45 6789 1D 06 01 2012
1A Tatum 1B Doe
1E Additional dependent child exemption 1E X
Dependent’s SSN Dependent’s DOB
1C 123 45 6789 1D 06 01 2012 Note. Not all dependent children are eligible for this additional
exemption. For instance, you may have included a grandson as a
Question 2. Did you answer “No” to STEP 3, question 4 above? If so, dependent in Box 6. However, if he doesn’t meet the qualification of
you are eligible to claim the qualifying relative as a dependent. being a foster child or a child for whom you are a legal guardian, you
will not be able to claim the additional exemption for him on Line 7.
For each qualified relative, enter his or her:
• First and last name in Box A and Box B. Line 7
• Nine-digit Social Security number (SSN) in Box C. Add the number of any additional dependent child exemptions located
• Date of birth in Box D. in boxes 1E through 5E. Enter the total in Box 7. Then, enter this
amount in the box on Schedule D, line 3.
Example 2. Cooper and Grace Doe (see Example 1 above) are also
eligible to claim Grace’s grandmother, Irene Smith, who lives with Claiming more than five dependents
them, as a dependent. Here is how they will complete line 2: If you are claiming more than five dependents, attach an additional
Dep. First Name Dep. Last Name Schedule IN-DEP. Make sure to add the additional information to the
totals on the first schedule, Boxes 6 and 7, where applicable.
2A Irene 2B Smith
Example 4. June has six dependents. She entered information for her
Dependent’s SSN Dependent’s DOB sixth dependent on line 1 on a second Schedule IN-DEP. She added
2C 987 65 4321 2D 10 15 1940 the dependent claimed on the second schedule to the five claimed
on the first schedule, and entered “6” on the first Schedule IN-DEP,
Line 6 Box 6. She made sure to include the second schedule with her filing.
Add the qualified dependents listed on lines 1 through 5, and enter the Likewise, she would include the sixth dependent in the total listed in
total in Box 6. Then, enter this amount in the box on Schedule D, line 2. Box 7 if the child listed on the second Schedule IN-DEP qualified for
the additional dependent child exemption.
Additional Dependent Exemptions
Read below to see if you are eligible to claim an additional dependent
exemption for a dependent child (children) listed on lines 1 through 5.
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Schedule IN-DEP-A Instructions Children of divorced or separated parents. A child will be treated as
the qualifying child or qualifying relative of his or her noncustodial
parent (defined later) if all of the following conditions apply.
Schedule IN-DEP-A Instructions 1. The parents are divorced, legally separated, separated under a
written separation agreement, or lived apart at all times during the
You must complete and enclose Schedule IN-DEP-A if you are last 6 months of the year (whether or not they are or were married).
claiming any additional exemption for adopted children. These 2. The child received over half of his or her support for the year from
children are also required to be listed on Schedule IN-DEP. the parents (and the rules on Multiple support agreements, later,
do not apply). Support of a child received from a parent’s spouse
To claim this exemption for an adopted child, the adoption of the child is treated as provided by the parent.
must be finalized before the end of the taxable year. 3. The child is in custody of one or both of the parents for more than
half of the year.
Lines 1 through 5 4. Either of the following applies.
For each adopted dependent, enter his or her: a. The custodial parent signs federal Form 8332 or a substantially
• First and last name in Box A and Box B similar statement that he or she won’t claim the child as a
• Nine-digit Social Security number (SSN) in Box C dependent for the year, and the noncustodial parent maintains
• Date of birth in Box D a copy of the signed federal Form 8332 with his or her records
• If the first listed taxpayer on the return is an adoptive parent of (as DOR can require this to be provided at a later date). If the
the child, check Box E divorce decree or separation agreement went into effect after
• If the second listed taxpayer on the return is an adoptive parent of 1984 and before 2009, the noncustodial parent may be able to
the child, check Box F include certain pages from the decree or agreement instead
of federal Form 8332. See Post-1984 and pre-2009 decree or
Note. An adopted child can only qualify for the additional adopted agreement and Post-2008 decree or agreement.
child exemption if the child also meets the requirements for an b. A pre-1985 decree of divorce or separate maintenance or
additional child exemption on Schedule IN-DEP. If Box E on Schedule written separation agreement between the parents provides
IN-DEP for the adopted child is not checked, the additional adopted that the noncustodial parent can claim the child as a
child dependent exemption also will be disallowed. dependent, and the noncustodial parent provides at least
$600 for support of the child during the year.
If both parents are adoptive parents of the child, only one additional
adopted child dependent deduction is permitted for that child. If conditions (1) through (4) apply, only the noncustodial parent can
claim the child for purposes of the dependency.
This exemption may not be claimed by a non-adoptive parent (e.g., a
biological parent of child adopted by a stepparent) unless the adoptive Custodial and noncustodial parents. The custodial parent is the
parent files a joint return with the non-adoptive parent. parent with whom the child lived for the greater number of nights in
the year. The noncustodial parent is the other parent. If the child was
If you are claiming more than five additional adopted child exemptions, with each parent for an equal number of nights, the custodial parent is
attach an additional Schedule IN-DEP-A. Include the additional the parent with the higher federal AGI. See Income Tax Information
information to the total on the first schedule, Box 6, where applicable. Bulletin #117 for an exception for a parent who works at night, rules
for a child who is emancipated under state law, and other details.
Post-1984 and pre-2009 decree or agreement. The decree or
Definitions and Special Rules for agreement must state all three of the following.
Dependents 1. The noncustodial parent can claim the child as a dependent
Important. without regard to any condition, such as payment of support.
• Various Internal Revenue Service (IRS) forms and publications 2. The other parent will not claim the child as a dependent.
you may need can be found online at https://apps.irs.gov/app/ 3. The years for which the claim is released.
picklist/list/formsInstructions.html.
• Indiana’s Income Tax Information Bulletin #117 can be found The noncustodial parent must maintain with his or her records a copy
online at www.in.gov/dor/files/reference/ib117.pdf. of all of the following pages from the decree or agreement as DOR can
require these to be provided at a later date.
Adopted child. An adopted child is always treated as your own child. An • Cover page (include the other parent’s SSN on that page).
adopted child includes a child lawfully placed with you for legal adoption. • The pages that include all the information identified in (1)
through (3) above.
Adoption taxpayer identification numbers (ATINs). If you have a • Signature page with the other parent’s signature and date of
dependent who was placed with you for legal adoption and you don’t agreement.
know his or her SSN, you must get an ATIN for the dependent from the
IRS. Get federal Form W-7A for details. If the dependent isn’t a U.S. citizen Post-2008 decree or agreement. If the divorce decree or separation
or resident alien, apply for an ITIN instead, using federal Form W-7. agreement went into effect after 2008, the noncustodial parent cannot
include pages from the decree or agreement instead of federal Form
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Definitions and Special Rules for Dependents Continued Multiple support agreements. If no one person contributed over
half of the support of your relative (or a person who lived with you all
8332. The custodial parent must sign either federal Form 8332 or a year as a member of your household) but you and another person(s)
substantially similar statement the only purpose of which is to release provided more than half of your relative’s support, special rules may
the custodial parent’s claim to an exemption for a child, and the apply that would treat you as having provided over half of the support.
noncustodial parent must include a copy with his or her return. The For details, see Income Tax Information Bulletin #117.
form or statement must release the custodial parent’s claim to the child
without any conditions. For example, the release must not depend on Permanently and totally disabled. A person is permanently and
the noncustodial parent paying support. totally disabled if, at any time during the year, the person cannot
engage in any substantial gainful activity because of a physical or
Release of exemption revoked. A custodial parent who has revoked his mental condition and a doctor has determined that this condition has
or her previous release of a claim to exemption for a child must maintain lasted or can be expected to last continuously for at least a year or can
with his or her records a copy of the revocation as DOR can require this be expected to lead to death.
to be provided at a later date. For details, see federal Form 8332.
Public assistance payments. If you received payments under the
Exception to citizen test. If you are a U.S. citizen or U.S. national Temporary Assistance for Needy Families (TANF) program or other
and your adopted child lived with you all year as a member of your public assistance program and you used the money to support another
household, that child meets the requirement to be a U.S. citizen in Step person, see Income Tax Information Bulletin #117.
2, question 1.
Qualifying child of more than one person. Even if a child meets the
Exception to gross income test. If your relative (including a person conditions to be the qualifying child of more than one person, only
who lived with you all year as a member of your household) is one person can claim the child as a dependent. If you and any other
permanently and totally disabled (defined later), certain income for person can claim the child as a dependent, the following rules apply:
services performed at a sheltered workshop may be excluded for this • If only one of the persons is the child’s parent, the child is treated
test. For details, see Income Tax Information Bulletin #117. as the qualifying child of the parent;
• If the parents file a joint return together and can claim the child as
Exception to time lived with you. Temporary absences by you or a qualifying child, the child is treated as the qualifying child of the
the other person for special circumstances, such as school, vacation, parents;
business, medical care, military service, or detention in a juvenile • If the parents do not file a joint return together but both parents
facility, count as time the person lived with you. Also see Children of claim the child as a qualifying child, DOR will treat the child as
divorced or separated parents, earlier, or Kidnapped child, later. the qualifying child of the parent with whom the child lived for
the longer period of time during the year. If the child lived with
If the person meets all other requirements to be your qualifying child each parent for the same amount of time, DOR will treat the child
but was born or died during the year, the person is considered to have as the qualifying child of the parent who had the higher federal
lived with you for more than half of the year if your home was this AGI for the year;
person’s home for more than half the time he or she was alive during the • If no parent can claim the child as a qualifying child, the child is
year. Any other person is considered to have lived with you for all of the treated as the qualifying child of the person who had the highest
year if the person was born or died during the year and your home was federal AGI for the year;
this person’s home for the entire time he or she was alive during the year. • If a parent can claim the child as a qualifying child but chooses
not to, the child is treated as the qualifying child of the person
Foster child. A foster child is any child placed with you by an who had the highest federal AGI for the year, but only if that
authorized placement agency or by judgment, decree, or other order of person’s federal AGI is higher than the highest federal AGI of any
any court of competent jurisdiction. parent of the child who can claim the child.
Kidnapped child. If your child is presumed by law enforcement Example. You, your daughter and your mother live together. Your
authorities to have been kidnapped by someone who is not a daughter meets the conditions to be a qualifying child for both you
family member, you may be able to take the child into account in and your mother. Your daughter doesn’t meet the conditions to be a
determining the dependency exemption. For details, see Income Tax qualifying child of any other person, including her other parent. Under
Information Bulletin #117. the rules just described, you can claim your daughter as a dependent.
Your mother cannot claim your daughter. However, if your mother’s
Married person. If the person is married and files a joint return, you federal AGI is higher than yours and you do not claim your daughter as
cannot claim that person as your dependent. However, if the person a dependent, your daughter is the qualifying child of your mother.
is married but does not file a joint return or files a joint return only
to claim a refund of withheld income tax or estimated tax paid, you For more details and examples, see Income Tax Information Bulletin #117.
may be able to claim him or her as a dependent. (See Income Tax
Information Bulletin #117 for details and examples.) In that case, go Social Security Number. You must enter each dependent’s 9-digit
to Step 2, question 3 (for a qualifying child) or Step 3, question 4 (for a Social Security number (SSN) on Schedule IN-DEP, Box C. Be sure the
qualifying relative). name and SSN entered agree with the dependent’s Social Security card.
Otherwise, we may disallow the exemption claimed for the dependent.
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Schedule E: Other Taxes When you make purchases from a company in Indiana, that company
is responsible for collecting the Indiana sales tax from you. When you
If the name or SSN on the dependent’s Social Security card is not make purchases from an out-of-state company, you are responsible for
correct or you need to get an SSN for your dependent, contact the making sure the use tax is paid. Either the out-of-state company collects
Social Security Administration. the tax from you, or you must pay the tax directly to the State of Indiana.
If your dependent child was born and died during the year and you do Complete the worksheet on page 33 to figure your tax. If you paid sales
not have an SSN for the child, enter “Died” in Box C and keep a copy tax to the state where the item was originally purchased, you are allowed
of the child’s birth certificate, death certificate, or hospital records as a credit against your Indiana use tax for an amount paid up to 7%.
DOR can require you to provide these at a later date. The document
must show the child was born alive. Line 2 – Household Employment Taxes
If, while you lived in Indiana, you paid cash wages during 2022 to
an individual who is not:
Example. Died • Your spouse,
• Your child under age 21,
If you apply for an ATIN or an ITIN on or before the due date of your • Your parent,
2022 return (including extensions) and the IRS issues you an ATIN or • An employee under age 18; and
an ITIN as a result of the application, the IRS will consider your ATIN the individual worked in and around your home as a baby-sitter,
or ITIN as issued on or before the due date of your return. nanny, health aide, private nurse, maid, caretaker, yard worker or
someone who does similar domestic duties, then that individual may
Student. A student is a child who during any part of 5 calendar be defined as your employee.
months of the tax year was enrolled as a full-time student at a school,
or took a full-time, on-farm training course given by a school or See Federal Publication 926, Household Employer’s Tax Guide, for more
a state, county, or local government agency. A school includes a information on how to define an employee. Visit www.irs.gov or call
technical, trade, or mechanical school. It does not include an on-the- the IRS at 1-800-829-1040.
job training course, correspondence school, or school offering courses
only through the Internet. If you paid cash wages of $2,200 or more to a household worker
who is your employee, or total cash wages of $1,000 or more in any
calendar quarter of 2021 or 2022 to all household employees, you
Schedule E: Other Taxes may have withheld state and county income taxes. To pay these taxes
on your Indiana income tax return, contact DOR for Schedule IN-H,
Line 1 – Use Tax on Internet, Mail Order and/or Out- or download one from www.in.gov/dor/tax-forms/2022-individual-
Of-State Purchases income-tax-forms.
If, while a resident of Indiana, you made purchases while you were
outside Indiana, through the mail (for instance, by catalog or offer Line 3 – Recapture of certain Indiana offset credits
through the mail), through radio or television advertising and/or over Indiana requires the recapture of certain offset credits if certain
the Internet, these purchases may be subject to Indiana sales and use conditions are met. Currently, these credits include the Indiana
tax, if sales tax was not paid at the time of purchase. This tax, called CollegeChoice 529 Education Savings Plan Credit and the Historic
“use” tax, is figured at 7% (.07). Building Rehabilitation Credit.
Sales/Use Tax Worksheet
List all purchases made during the tax year from out-of-state retailers.
Column A Column B Column C
Description of personal property purchased from out-of-state retailer Date of purchase(s) Purchase Price of
Property(s)
Magazine subscriptions:
Mail order purchases:
Internet purchases:
Other purchases:
1. Total purchase price of property subject to the sales/use tax: enter total of Columns C ........................................... 1
2. Sales/use tax: Multiply line 1 by .07 (7%) .................................................................................................................. 2
3. Sales tax previously paid on the above items (up to 7% per item) ............................................................................ 3
4. Total amount due: Subtract line 3 from line 2. Carry to Form IT-40PNR, Schedule E, line 1. If the amount is
negative, enter zero and put no entry on Schedule E, line 1 ..................................................................................... 4
IT-40PNR Booklet 2022 Page 33
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Schedule IN-PRO Once you have determined the amount of income to be taxed and by
which county, follow the line-by-line instructions below to complete
• If contributions were made to an Indiana CollegeChoice 529 Schedule IN-PRO.
education savings plan in which you are the account owner and
you made a non-qualified withdrawal(s) from this plan during the Line-By-Line Instructions
tax year, you will probably have to repay some or all of any credits Before you begin, visit our website at www.in.gov/dor/tax-forms/2022-
previously claimed. individual-income-tax-forms to get Schedule CT-40PNR. The county
• You may need to recapture some or all of the credits previously code numbers and tax rates are located on the second page of the
claimed for the Historic Building Rehabilitation Credit if you did schedule.
not meet certain requirements.
Line 1 –
Complete and enclose Schedule IN-CR if you have an amount • Column A – Enter the two-digit county code number for the
to be recaptured. Enter the total amount to be recaptured on line income reported in Column B.
3. Download Schedule IN-CR by visiting www.in.gov/dor/tax- • Column B – Enter the modified wage income (income apportioned
forms/2022-individual-income-tax-forms. to Indiana) associated with the county listed in Column A.
• Column C – Enter the county tax rate associated with the county
Line 4 – Nonresident professional team member’s listed in Column A.
county tax from Schedule IN-PRO • Column D – Multiply Column B by Column C. Round your entry
Enter the total county tax reported on line 11 of Schedule IN-PRO. to the nearest whole dollar.
Lines 2 – 10. Complete these lines if you are reporting income subject
Schedule IN-PRO to tax by other Indiana counties.
This schedule serves to collect Indiana county income tax from certain
nonresident professional team members. Line 11. Add all amounts from Column D, lines 1 through 10, and
enter the result here. Also, enter this amount on Schedule E, line 4.
You must complete Schedule IN-PRO if you and/or your spouse, if
married filing jointly: Example. Eddie is a full-year Illinois resident. He is a member of a
• Were a professional team member*, professional baseball team, and played four games in Indiana during
• Were not an Indiana resident on January 1 of the year, the year. He played two games in Ft. Wayne, Ind. (Allen County),
• Were not working in Indiana on January 1 of the year, and was traded, and played two games in Evansville, Ind. (Vanderburgh
• Received from a professional team salaries, wages, bonuses, and County). His modified wage income for the games played in Ft. Wayne
any other type of compensation, apportioned to Indiana.** is $2,800, and $2,400 for the games played in Evansville.
*A professional team member includes: Here is how Eddie will complete Schedule IN-PRO.
• Professional baseball, basketball, football, hockey, or soccer team
employees who are active players, players on the disabled list, Column A Column B Column C Column D
and any other individuals required to travel and who do travel 1 02 2800 .0148 41
with and perform services on behalf of a team on a regular basis,
2 82 2400 .012 29
including coaches, managers, and trainers, and
• Race team members, including employees or independent 11 70
contractors who render services on behalf of the race team,
including, but not limited to, drivers, pit crew members, He will carry the $70 total county tax due to Schedule E, line 4.
mechanics, technicians, spotters, and crew chiefs.
You must enclose all W-2s, 1099s, Forms IN-MSID/MSID-A, etc.,
**Income apportioned to Indiana. showing income from Indiana sources. Make sure to include any
• Nonresident professional team members will apportion their Indiana state/county withholding amounts on Schedule F, which
income to Indiana based on duty days performed in Indiana (by is available on our website at www.in.gov/dor/tax-forms/2022-
county) compared to total duty days in a taxable year. See Income individual-income-tax-forms.
Tax Information Bulletin #88, including section VI. Local Income
Tax, at www.in.gov/dor/files/reference/ib88.pdf for assistance in Note. Nonresident professional team members who meet the
determining the amount of income that is subject to county tax. requirements to file Schedule IN-PRO and who are residents of
• Nonresident race team members also will apportion their income a reciprocal state (Kentucky, Michigan, Ohio, Pennsylvania, and
to Indiana based on duty days performed in Indiana (by county) Wisconsin) are not eligible to file Form IT-40RNR; they must file form
compared to total duty days in a taxable year. See Income Tax IT-40PNR, and figure county tax on Schedule IN-PRO.
Information Bulletin #88B at www.in.gov/dor/files/ib88b.pdf for
assistance in determining the amount of income that is subject to
county tax.
Page 34 IT-40PNR Booklet 2022
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Schedule F: Credits Line 4 – Unified Tax Credit for the Elderly
This credit is no longer limited to a June 30 filing deadline. It may be
claimed during the same time period as any other refundable credit.
Schedule F: Credits The tax return must be filed and credit claimed within three years of
the filing due date (including extensions) to be eligible for a refund.
Lines 1 and 2 – Indiana State and County Tax Withheld
If you are reporting any tax withheld on your behalf, report the Indiana This credit is available for certain low-income individuals who are age
state and local taxes on these lines. Report the state and county 65 or older. You may be able to claim this credit if you and/or your
withholdings separately. Do not claim credit for taxes withheld for spouse meet all the following requirements:
states other than Indiana or for localities outside Indiana. • You and/or your spouse must have been age 65 or older by Dec.
31, 2022,
The amount of Indiana state tax withheld is usually shown in box • If married and living together at any time during the year, you
17 and the amount of and Indiana county tax withheld is usually must file a joint return,
shown in box 19 of your W-2s. Indiana state and county withholding • The amount on Indiana Schedule A, Section 3, line 36A must be
amounts may also be present on other forms, including W-2Gs, less than $10,000,
various 1099s, Form IN MSID-A and Schedule IN K-1. • You must have been a resident of Indiana for at least six months
during 2022, and
You must enclose your (and your spouse’s, if married filing jointly) • You must not have been in prison for 180 days or more in 2022.
withholding statements, including W-2s, W-2Gs, 1099s, Form IN
MSID-A and Schedule IN K-1s, with your tax return to verify Indiana Note. Disabled persons under age 65 do not qualify for this credit.
state and county taxes claimed as being withheld. If you had more than
one job, a W-2 form for each job must be attached to the tax return Important.
so you can get credit for all Indiana state and county tax withheld. • If your spouse died after Jan. 1, 2022, you can claim this credit by
Failure to enclose all necessary withholding statements will result in a filing a joint return.
reduced refund or increase in the amount you owe. In addition to the • If a person dies and does not have a surviving spouse, then no one
withholding statements, you must also enclose Schedule IN-W. can claim the credit on behalf of the deceased person.
• If your income is low enough that you are not required to file a
If you had Indiana state tax and/or county tax withheld on any other Form IT-40PNR, and you meet the requirements for claiming the
form, such as a W-2G or 1099R, you must attach them to the tax Unified Tax Credit for the Elderly, do not file Form IT-40PNR.
return to get credit for the amount withheld. Instead, file the simplified Form SC-40 to claim this credit.*
• If you are claiming an automatic taxpayer refund for 2022, do not
Important. The use of substitute W-2s will delay the processing of include the amount on this line. Enter that amount on Line 11.
your return and may impact the issuance of any refund.
*Form SC-40 can be found at www.in.gov/dor/tax-forms/2022-
A note about your withholding statements. It is important that any individual-income-tax-forms. You can claim the credit on either Form
statement reporting withholding is readable. The state and county tax IT-40 orForm SC-40, but file only one of these forms, and only file once.
amounts withheld are verified on every withholding statement that
comes in with your tax return. These amounts also should be reflected Note. You must file the Form IT-40PNR if you are eligible to take the
on Schedule IN-W. If you are not filing electronically, we encourage Lake County residential income tax credit. See line 6 instructions on
you to enclose the best copy available when you file. page 36 for more information.
In some cases, verification of withholding may be delayed if the business No double benefit allowed. If you qualify to file Form SC-40 and do
withholding the tax is late filing copies of withholding statements. so, then do not also file Form IT-40 and claim the credit a second time.
Special instructions for composite filers. Additional state/county To Figure Your Unified Tax Credit for the Elderly:
withholdings may have been made on your behalf by a partnership
and/or S corporation that files with Indiana. Information about these Use Table A if:
withholdings will be made available to you on Schedule IN K-1. Make You meet all the requirements listed above, and:
sure to include any withholdings from Lines 8 and 9 of Schedule IN • You are filing a joint return, lived with your spouse during the tax
K-1, and enclose the schedule when filing. year, both were Indiana residents for at least six months and both
were age 65 or older by Dec. 31, 2022, or
Line 3 – 2022 Estimated Tax Paid • Both you and your spouse met all the above-requirements and
If you made estimated tax payments, enter the total paid for 2022 on your spouse died after Jan. 1, 2022.
this line. Also, include any extension payment made with Form IT-9
Extension of Time to File for tax year 2022.
Note. Do not include on this line any estimated tax paid for tax year 2023.
IT-40PNR Booklet 2022 Page 35
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Schedule F: Credits Continued 2. Your Modified Indiana Adjusted Gross Income is less than
$18,600.
Table A
Joint Filers Both Age 65 or Older 3. You are not claiming the Homeowner’s Residential Property Tax
If the income on Line 1 of Your Allowable Deduction on Indiana Schedule C, line 2. If you are claiming this
Form IT-40 is: Credit* is: credit, make sure to see the Final Step after Worksheet B in the
less than $1,000 ..................................................................................$140 next column.
between $1,000 and $2,999 ................................................................ $90
between $3,000 and $9,999 ................................................................ $80 Complete the following steps to see if you are eligible to claim this
credit.
Use Table B if:
You meet all the requirements listed above, and: Step 1
• You are age 65 or older and are single or widowed, • Did you pay property tax to Lake County (Indiana) on your
• You are filing a joint return and only one is age 65 or older,or residence during the year? ☐ Yes No☐
• You are filing a joint return and only one was an Indiana resident • If you answered “no,” STOP. You do not qualify for this credit.
for at least six months, or you are married but did not live with • If you answered “yes,” continue to Step 2.
your spouse during the tax year, are age 65 or older and are
married filing separately. Step 2
1. First, prepare your state tax return
(Form IT-40PNR) through line 7.
Table B
Enter amount from line 7 here ..............................1 __________
Only One Person Age 65 or Older
2. Enter any Homeowner’s Residential
If the income on Line 1 of Your Allowable Property Tax Deduction reported
Form IT-40 is: Credit* is:
on Schedule C, line 2 ...............................................2 __________
less than $1,000 ..................................................................................$100 3. Modified Indiana AGI. Add lines 1 and 2,
between $1,000 and $2,999 ................................................................ $50 enter result here and continue to Step 3 ...............3 __________
between $3,000 and $9,999 ................................................................ $40
Step 3
*Once you have located your credit on Table A or Table B, enter that If you are filing as a single individual or as married filing jointly:
amount on line 4. • If the amount from Step 2, line 3 is greater than $18,599, STOP.
You do not qualify for this credit.
Remember to file either Form SC-40 or Form IT-40, but not both. • If the amount from Step 2, line 3 is less than $18,000, go to
Worksheet A to figure your credit.
Line 5 – Indiana’s Earned Income Credit (EIC) • If the amount from Step 2, line 3 is between $18,000 and $18,599,
If you are eligible for an earned income credit on your federal tax go to Worksheet B to figure your credit.
return, you may be eligible for Indiana’s earned income credit, too.
Here are some important things to know: If you are filing as a married individual filing separately:
• You must be eligible for and have claimed an EIC on your federal • If the amount from Step 2, line 3 is greater than $9,299, STOP.
tax return. If not, STOP. You are not eligible to claim Indiana’s EIC. You do not qualify for this credit.
• Your income on Form IT-40, line 1 (or Indiana’s Schedule A, line • If the amount from Step 2, line 3 is less than $9,000, go to
36A), must be less than $49,399. If it is the same amount or more, Worksheet C to figure your credit.
STOP. You are not eligible to claim Indiana’s EIC. • If the amount from Step 2, line 3 is between $9,000 and $9,299, go
• Schedule IN-EIC must be completed and enclosed by all filers to Worksheet D to figure your credit.
claiming the EIC.
To figure the EIC, go to Indiana’s Publication EIC at www.in.gov/ Worksheet A:
dor/tax-forms/2022-individual-income-tax-forms. This publication Complete if the answer from Step 2, line 3 is less than $18,000 and
includes all worksheets and tables, along with any 2022 federal EIC you are filing as single or married filing jointly.
changes that Indiana is not following. A1 Enter the amount of Indiana
property tax you paid on your
Line 6 – Lake County (Indiana) Residential Income Lake County residence ................................. A1 $ ____________
Tax Credit A2 Maximum credit ........................................... A2 $ 300
You may be eligible to claim a Lake County (Indiana) Residential
Income Tax credit if you meet all three of the following requirements. A3 Enter the smaller of A1 or A2. This is
your credit. Enter here and on Schedule 5,
1. You paid property tax to Lake County (Indiana) on your line 6, and skip to the Final Step below .... A3 $ ____________
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.
Page 36 IT-40PNR Booklet 2022
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Schedule F: Credits Continued Lines 7 and 8: Economic Development for a Growing
Economy Credit (EDGE); Economic Development for
Worksheet B: Indiana AGI Phaseout a Growing Economy Retention Credit (EDGE-R)
Complete if the answer from Step 2, line 3 is between $18,000 and If you have business income (including partnership or S corporation
$18,600 and you are filing as single or married filing jointly. income) you may be eligible for one or both of these credits. These
credits are available to businesses who conduct certain activities that
B1 Allowable maximum Indiana AGI ............. B1 $ 18,600 are designed to foster job creation and/or job retention in Indiana.
B2 Enter the amount from Step 2, line 3... ...... B2 $ ____________
B3 Subtract B2 from B1 (if answer is zero This credit is available to owners of pass-through entities such as S
or a negative amount, STOP. corporations, partnerships, limited liability companies, etc. However, if all
You do not qualify for this credit) .............. B3 $ ____________ or part of your share of the credit is claimed by the pass-through entity,
you may not claim the previously-claimed credit on your own behalf.
B4 Multiply the amount on B3 by 0.5.
Round answer; see page 5 for
Contact the Indiana Economic Development Corporation (IEDC),
rounding instructions .................................. B4 $ ____________
One North Capitol, Suite 700, Indianapolis, IN, 46204, for eligibility
B5 Enter the amount of Indiana property tax requirements, or visit iedc.in.gov for additional information.
you paid on your Lake County residence ... B5 $ ____________
B6 Enter the smaller of B4 or B5. This is your To claim these credits you must complete and enclose Schedule IN-
credit. Enter here and on Schedule 5, line 6, EDGE or Schedule IN-EDGE-R, which are located online at www.
and continue to the Final Step below ......... B6 $ ____________ in.gov/dor/tax-forms/2022-individual-income-tax-forms.
Worksheet C: The information to be reported on Schedule IN-EDGE or Schedule
IN-EDGE-R is located on the Indiana Schedule IN K-1 or on the
Complete if the answer from Step 2, line 3 is less than $9,000 and
approved credit agreement letter from the IEDC.
you are a married individual filing separately.
C1 Enter the amount of Indiana Line 9 – Headquarters Relocation Credit
property tax you paid on your (refundable portion)
Lake County residence ................................. C1 $ ____________ A business with annual worldwide revenue of $50 million, at least
C2 Maximum credit ........................................... C2 $ 150 75 employees (for credits awarded before July 1, 2022), and which
C3 Enter the smaller of C1 or C2. This is relocates its corporate headquarters to Indiana may be eligible for
your credit. Enter here and on Schedule 5, a credit. The credit may be as much as 50% of the cost incurred in
line 6, and skip to the Final Step below .... C3 $ ____________ relocating the headquarters.
Beginning with the 2022 tax year, this credit must be reported
Worksheet D: Indiana AGI Phaseout on Schedule IN-OCC, found at www.in.gov/dor/tax-forms/2022-
Complete if the answer from Step 2, line 3 is between $9,000 and individual-income-tax-forms. Make sure to enclose this schedule with
$9,300 and you are a married individual filing separately. your tax filing.
D1 Allowable maximum Indiana AGI ............. D1 $ 9,300
D2 Enter the amount from Step 2, line 3... ...... D2 $ ____________ Some or all of this credit may be refundable. If the IEDC has ruled
some or all of this credit to be refundable, enter on this line the
D3 Subtract D2 from D1 (if answer is zero refundable amount of the credit less the portion of the credit used
or a negative amount, STOP. to offset your tax liability. You must maintain the documentation
You do not qualify for this credit) .............. D3 $ ____________ provided to you that supports the refundable portion of this credit as
D4 Multiply the amount on D3 by 0.5. DOR may request it.
Round answer; see page 5 for
rounding instructions ..................................D4 $ ____________ Caution. The combination of the headquarters relocation credit claimed
D5 Enter the amount of Indiana property tax here (offset amount) and on lines 29 through 31 (refundable amount)
you paid on your Lake County residence ... D5 $ ____________ may not exceed the total of the credit that is available. See the instructions
for the Headquarters Relocation Credit beginning on page 46.
D6 Enter the smaller of D4 or D5. This is your
credit. Enter here and on Schedule 5, line 6,
For more information (including limitations on the credit and the
and continue to the Final Step below ......... D6 $ ____________
application process), see Income Tax Income Tax Information Bulletin
#97, available at www.in.gov/dor/files/reference/ib97.pdf. This credit is
Final Step
administered by the IEDC. Contact them at One North Capitol, Suite
Remember, you are not eligible to claim both the Homeowner’s Property
700, Indianapolis, IN 46204, via website at iedc.in.gov, or by phone at
Tax Deduction and the Lake County Residential Income Tax Credit in the
(317) 232-8800.
same year. Therefore, if you are claiming this credit, make sure to remove
any Homeowner’s Property Tax Deduction reported on Schedule C, line 2.
IT-40PNR Booklet 2022 Page 37
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Schedule F: Credits Continued • You were not claimed as a dependent on another individual’s
Indiana income tax return in 2022.
Line 10 – Adoption Credit • You received Social Security income in 2022.
You are eligible to claim an adoption credit on your state tax return if ο This can include any benefit received from the Social Security
you claimed an adoption credit on your federal tax return. The amount Administration regardless of age, disability, or marital status.
of the credit is 20% of the federal credit allowed per child, or $2,500 ο This does not include benefits issued by a state, territory,
per child, whichever is less. If you are claiming a credit because of a or foreign county, Railroad Retirement Board benefits, or
federal carryover of the adoption credit, the total credit allowable for federal Civil Service Retirement benefits.
the child is limited to $2,500. ο Benefits received in 2022 but required to be repaid are not
considered to be received.
Federal adoption carryforward credits. ο You file a resident return before January 1, 2024. In the case
A carryforward credit claimed on federal Form 8839 may be allowed if it of an IT-40PNR, the return is considered a resident return for
is from the preceding five tax years (2017, 2018, 2019, 2020 and/or 2021). an individual if the individual is a full-year Indiana resident
To figure the credit, use the Adoption Credit Worksheet on page 39. and the individual’s spouse is a nonresident for all or part of
Use lines 6 through 30 if you are carrying forward a credit from a previous the year (or vice versa). If you or your spouse are a full-year
year. Complete only the lines applicable to the year(s) from which you are Indiana resident, you must complete Schedule H, Section 1
carrying forward a credit. If you are not claiming a credit based on any for both spouses.
federal adoption credit carryforward, skip lines 6 through 30.
If you are married filing jointly, your eligibility and your spouse’s
See Income Tax Information Bulletin #111 at www.in.gov/dor/files/ eligibility must be determined separately. Enter $200 if you or your
reference/ib111.pdf for more information about this credit. spouse (if married filing jointly) are eligible to claim the automatic
taxpayer refund if you meet the requirements above.
Maintain with your records a copy of the federal Form 8839, federal
Adoption Credit Carryforward Worksheets (if applicable), and federal If you are claiming this credit and filing this return on paper, you must
Form 1040 as DOR can require you to provide this information at a attach a copy of Form SSA-1099 if you (or your spouse if married filing
later date. jointly) received benefits other than Supplemental Security Income
(SSI). If you (or your spouse if married filing jointly) received only SSI,
Line 11 – 2022 Additional Automatic Taxpayer Refund please attach a letter from the Social Security Administration indicating
If you are filing this form, you may claim the credit only if you and qualification for benefits. Failure to include the required form will result
your spouse are married filing jointly and either you or your spouse in your credit being denied.
is a full-year Indiana resident. If you are single or married filing
separately, you may not claim the credit on this return. If you are filing this return electronically, you must provide the
information from boxes 1, 2, and 5 of the Form SSA-1099 you (or
If you or your spouse were not eligible for the combined $325 your spouse if married filing jointly) or check the box indicating SSI
automatic taxpayer refund issued during 2022, you or your spouse eligibility (if you are claiming based solely on receiving SSI). Failure
may be eligible for a $200 automatic taxpayer refund. You are eligible to properly provide the requested information will result in your
for this additional taxpayer refund only if the you (or your spouse if credit being denied.
married filing jointly) meet of the following criteria:
• You were not eligible to receive the combined $325 automatic Note. It is possible for one spouse to receive the $325 combined
taxpayer refund paid in 2022. If you had all or part of the $325 automatic taxpayer refund paid in 2022 and the other spouse to
offset due to other liabilities, you are considered eligible for the qualify for the $200 automatic taxpayer refund on this return.
$325 combined automatic taxpayer refund and are not eligible to
claim the refund on this return.
Page 38 IT-40PNR Booklet 2022
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Schedule F: Credits Continued
Adoption Credit Worksheet
Child 1 Child 2 Child 3
1. First Name
2. Last Name
3. Year of Birth
4. Identification Number
5. Check if this child is NOT claimed as a dependent
6. Enter amount from 2017 Form 8839, line 11 $ $ $
7. Enter the amount from 2017 Form 8839, line 12 $ $ $
8. Divide line 6 by line 7; round answer to four decimal places
9. Enter the amount of 2017 carryforward credit used in 2022 (line 2 minus line 10 of the
2022 Adoption Credit Carryforward Worksheet from the Form 8839 instructions) $ $ $
10. Multiply line 8 by line 9; round to nearest whole dollar. Enter this amount on line 36 $ $ $
11. Enter amount from 2018 Form 8839, line 11 $ $ $
12. Enter the amount from 2018 Form 8839, line 12 $ $ $
13. Divide line 11 by line 12; round answer to four decimal places
14. Enter the amount of 2018 carryforward credit used in 2022 (line 3 minus line 12 of the
2022 Adoption Credit Carryforward Worksheet from the Form 8839 instructions) $ $ $
15. Multiply line 13 by line 14; round to nearest whole dollar. Enter this amount on line 37 $ $ $
16. Enter amount from 2019 Form 8839, line 11 $ $ $
17. Enter the amount from 2019 Form 8839, line 12 $ $ $
18. Divide line 16 by line 17; round answer to four decimal places
19. Enter the amount of 2019 carryforward credit used in 2022 (line 4 minus line 14 of the
2022 Adoption Credit Carryforward Worksheet from the Form 8839 instructions) $ $ $
20. Multiply line 18 by line 19; round to nearest whole dollar. Enter this amount on line 38 $ $ $
21. Enter amount from 2020 Form 8839, line 11 $ $ $
22. Enter the amount from 2020 Form 8839, line 12 $ $ $
23. Divide line 21 by line 22; round answer to four decimal places
24. Enter the amount of 2020 carryforward credit used in 2022 (line 5 minus line 16 of the
2022 Adoption Credit Carryforward Worksheet from the Form 8839 instructions) $ $ $
25. Multiply line 23 by line 24; round to nearest whole dollar. Enter this amount on line 39 $ $ $
26. Enter amount from 2021 Form 8839, line 11 $ $ $
27. Enter the amount from 2021 Form 8839, line 12 $ $ $
28. Divide line 26 by line 27; round answer to four decimal places
29. Enter the amount of 2021 carryforward credit used in 2022 (line 6 minus line 18 of the
2022 Adoption Credit Carryforward Worksheet from the Form 8839 instructions) $ $ $
30. Multiply line 28 by line 29; round to nearest whole dollar. Enter this amount on line 40 $ $ $
31. Enter amount from 2022 Form 8839, line 11 $ $ $
32. Enter the amount from 2022 Form 8839, line 12 $ $ $
33. Divide line 31 by line 32; round answer to four decimal places
34. Enter the amount from line 16 of Form 8839 reduced by the amount on line 13 of
Form 8839. If less than zero, enter 0 $ $ $
35. Multiply line 33 by line 34; round to nearest whole dollar. Enter this amount on line 41 $ $ $
IT-40PNR Booklet 2022 Page 39
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Schedule F: Credits Continued
Adoption Credit Worksheet (continued)
Child 1 Child 2 Child 3
36. Enter the amount on line 10 $ $ $
37. Enter the amount on line 15 $ $ $
38. Enter the amount on line 20 $ $ $
39. Enter the amount on line 25 $ $ $
40. Enter the amount on line 30 $ $ $
41. Enter the amount on line 35 $ $ $
42. Enter the sum of lines 36 through 41 $ $ $
43. Multiply line 42 by 20% (0.20) $ $ $
44. Enter $2,500 $ $ $
45. Enter the sum of any previous Indiana adoption credits claimed for the child $ $ $
46. Enter line 44 minus line 45. If less than zero, enter 0 $ $ $
47. Enter the lesser of line 43 and line 46. Enter this amount on IT-40, Schedule 5, line 10,
or IT-40PNR, Schedule F, line 10 $ $ $
Page 40 IT-40PNR Booklet 2022
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Schedule IN-DONATE Limitation
The combination of the amounts you wish to donate to these funds
cannot exceed the overpayment shown on Form IT-40, line 16.
Schedule IN-DONATE
Each of the following funds has been assigned a three-digit code • If the total of the donations designated on this schedule is more
number. When listing your contribution on Schedule IN-DONATE than your available overpayment, the donation(s) will be reduced
under line 1, enter the name of the fund, the three-digit code number on a pro rata basis. For example, Sam wants to donate $20 to
and the amount to be contributed. each fund, for a total of $60. His actual overpayment is $51. The
donations to the three funds will be evenly reduced to $17 each.
You may contribute all or a portion of your Form IT-40, line 16 • If you entered a donation to one or more of these funds, and
overpayment to the following funds: wish to apply some of your overpayment to next years estimated
tax account, the overpayment will be applied first to the selected
• Indiana Nongame Wildlife Fund 200 fund(s) and then to the estimated tax account. Any remaining
The Indiana Wildlife Diversity Program offers you the opportunity to overpayment will be refunded to you. For example, Aaron donated
play an active role in conserving Indiana’s nongame and endangered $100 to the Indiana Nongame Wildlife Fund, and is applying $50
wildlife. This program is funded through public donations to the to next year’s estimated tax account. His actual overpayment is
Indiana Nongame Wildlife Fund. The money you donate goes directly only $110. The full $100 will be applied to the selected fund; the
to the protection and management of more than 750 wildlife species remaining $10 will be applied to next year’s estimated tax account.
in Indiana - from songbirds and salamanders to state-endangered
Trumpeter swans and spotted turtles.
Schedule IN-W: Indiana Withholding
Enter both the name of the fund and the amount you wish to donate
under line 1, and enter 200 as the designated 3-digit code number. Statements
You must complete and enclose Schedule IN-W if you are reporting
Also, see the Limitation below.
any tax withheld on your behalf and when filing your IT-40, IT-40PNR
or IT-40RNR by paper. Enter information from each withholding
If you do not have an overpayment, but want to support the Wildlife
statement, including Form W-2, 1099, IN-MSID-A or Schedule IN K-1.
Diversity Section, do not change your tax return. You may make a
contribution online at www.in.gov/dnr/fish-and-wildlife/nongame-and-
If you have a withholding statement that withholds tax for multiple
endangered-wildlife/donate-to-the-indiana-nongame-wildlife-fund/.
Indiana counties, enter the Indiana state income and Indiana state tax
withheld once for that statement. Do not duplicate the Indiana state
• Military Family Relief Fund 201
income and Indiana state tax withheld on multiple lines.
The Indiana Department of Veterans Affairs’ Military Family Relief Fund
provides emergency grants to be used by military and veteran families.
Column A – Social Security Number
The funds can be utilized for needs such as food, housing, utilities,
Enter your or your spouse’s (if married filing jointly) social security
medical services, transportation, and other essential family support
number from your W-2, 1099, IN-MSID-A, IN K-1, or other form on
expenses which have become difficult to afford. The Military Family Relief
which Indiana state and/or local tax withholding is reported for you or
Fund has helped more than 2000 families since its inception in 2007.
your spouse (if married filing jointly).
Enter both the name of the fund and the amount you wish to donate
Column B – Form Code
under line 1, and enter 201 as the designated 3-digit code number.
Enter the appropriate form code listed on the Reference Chart
Also, see the Limitation below.
provided at the bottom of this schedule. Leave blank if your W-2,
1099, or other federal form type is not listed or if your withholding is
If you do not have an overpayment, but want to support the Military
from IN-MSID-A or IN K-1.
Family Relief Fund, you may make a contribution by writing a check
made payable to the Military Family Relief Fund and send it to the
Column C – Employer or Payer Identification Number
Indiana Department of Veterans Affairs, 302 W. Washington Street,
Enter the employer’s or State/payer’s identification number (ID).
Suite E-120, Indianapolis, IN 46204.
Column D – State Income
Read more about this fund and other programs available for Hoosier
Enter the amount of Indiana income.
veterans online at www.in.gov/dva.
Column E – State Tax Withheld
• Public K – 12 Education Fund 202
Enter the amount of Indiana State Tax withheld.
You may donate all or a portion of your overpayment to help fund
public education for kindergarten through grade 12 in Indiana. Enter
both the name of the fund and the amount you wish to donate under Important. Complete Columns F, G, and H only if there is Indiana
line 1, and enter 202 as the designated 3-digit code number. Also, see local withholding.
the following Limitation.
Column F – Local Income
Enter the amount of Indiana local income.
IT-40PNR Booklet 2022 Page 41
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Schedule IN-W: Indiana Withholding Statements Continued *Do not include any county tax reported on Schedule E: Other Taxes,
line 4.
Column G – Local Tax Withheld
Enter the amount of County Tax withheld. Note. See the Combined Limitation page 43.
Column H – Locality Code Important. You must enclose either a copy of your W-2s or other
Enter the appropriate Indiana 2-digit county code. Refer to the back withholding statements showing the non-Indiana locality amount
of Schedule CT-40, CT-40PNR or IT-40RNR for a list of county codes. withheld or a copy of the non-Indiana locality tax return.
Line 26 Remember, you can use this credit only if you have both:
Add Column E, lines 1 through 25. Enter this total on line 1 of IT-40 • A county tax amount on Form IT-40PNR, line 9, and
Schedule 5, or line 1 of IT-40PNR Schedule F, or line 7 of IT-40RNR • A local income tax that you had to pay outside Indiana.
Line 27 Line 2 – Community Revitalization Enhancement
Add Column G, lines 1 through 25. Enter this total on line 2 of IT-40 District Credit
Schedule 5, or line 2 of IT-40PNR Schedule F, or line 8 of IT-40RNR. A state and local income tax liability credit is available for a qualified
investment made within a community revitalization enhancement
Note. You must enclose your W-2s, 1099s, IN-MSID-As, IN K-1s, or district. The expenditure must be made under a plan adopted by an
other forms reporting Indiana state or county tax withholding with advisory commission on industrial development and approved by the
this completed schedule. Indiana Economic Development Corporation before it is made. The
credit is equal to 25% of the qualified investment made by the taxpayer
If you are reporting more than 25 withholding statements, complete during the taxable year.
and attach additional Schedule IN-W as needed, but do not complete
lines 26 and 27. On the first schedule, enter the total of state tax This credit is available to owners of pass-through entities such as
withheld (Column E) from all pages on line 26 and enter the total of S corporations, partnerships, limited liability companies, etc. It is
local tax withheld (Column G) from all pages on line 27. Use these nonrefundable and cannot be carried back. You may carry forward any
totals numbers on lines 1 and 2 of IT-40 Schedule 5 or IT-40PNR excess credit to the next tax year.
Schedule F, or lines 7 and 8 of IT-40RNR.
The allowable credit is the lesser of the available credit or the county
tax due on line 9 of Form IT-40PNR. Also, claim any unused
Schedule G: Offset Credits amount (within certain limitations) on Schedule G under line 6 (see
instructions for this credit on page 45).
The following credits cannot be refunded; their purpose is to help
reduce your state and/or county tax amounts due. See the Combined Contact the Indiana Economic Development Corporation, One North
Limitation areas after the instructions for line 3 and line 7. Capitol, Suite 700, Indianapolis, IN, 46204 for additional information.
Line 1 – Credit for Local Taxes Paid Outside of Indiana See the Restriction for Certain Tax Credits - Limited to One per
If you figured county tax on Form IT-40PNR, line 9, and had to pay a Project below for additional limitations. Also, see the Combined
local income tax outside Indiana, you may be able to take a credit. This Limitation below.
credit applies only if the tax you paid outside Indiana was to another
city, county, town, or other local governmental entity; and they did not Line 3 – Other Local Credits
refund the tax, or give you a credit for Indiana county tax. Currently, there are no other local credits available to be reported in
this space.
The credit can be used to reduce your county tax liability. Carefully
read instructions for Line B below. Restriction for Certain Tax Credits – Limited to One
per Project
Complete lines A, B and C to figure your credit. A taxpayer may not be granted more than one credit for the same
project. The credits that are subject to this limitation are the
A. Enter the amount of tax paid to the alternative fuel vehicle manufacturer credit, community revitalization
non-Indiana locality .............................................. A_________enhancement district credit, enterprise zone investment cost credit,
B. Multiply the amount of income taxed by Hoosier business investment credit, industrial recovery credit, and the
the non-Indiana locality by the rate from venture capital investment credit.
Schedule CT-40PNR, Section 1, line 4, or
Section 2, line 6. Enter result here ........................B _________ For more information see Income Tax Information Bulletin #59
available at www.in.gov/dor/files/reference/ib59.pdf.
C. Enter the amount of Indiana county
income tax shown on Form IT-40PNR, line 9 ..... C _________Apply this restriction first when figuring your credits. Then apply the
Combined Limitation.
The amount of the credit is the lesser of the amounts on A, B or C.
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Schedule G: Offset Credits Continued Group A
No Agreement (Credit taken on resident return)
Combined Limitation Alabama Louisiana New York
There is one final limitation if you claim more than one credit on lines
Arkansas Maine North Carolina
1 through 3 of Schedule G. These credits, when combined, cannot be
greater than the county tax shown on Form IT-40PNR line 9; if they California Maryland North Dakota
are, adjust the amounts before you enter them. See the following Order Colorado Massachusetts Oklahoma
of Application and example for guidance. Connecticut Minnesota Rhode Island
Delaware Mississippi South Carolina
Order of Application Georgia Missouri Utah
First, use the credits which cannot be carried over and applied Hawaii Montana Vermont
against your county tax in another year. This means apply any credit
Idaho Nebraska Virginia
for local taxes paid outside Indiana first, then apply any community
Illinois New Hampshire* West Virginia
revitalization enhancement district credit.
Iowa New Jersey
How to Adjust the Amount of Credit to be Entered Kansas New Mexico
(Example) Any foreign countries or U.S. possessions
Example. Megan is eligible to claim a $100 credit for local taxes paid * Capital gain, interest, and dividends only.
outside Indiana plus a $200 community revitalization enhancement
district credit (CREED), for a $300 total amount in offset credits. Her If you are personally subject to the District of Columbia Unincorporated
county tax due (IT-40PNR, line 9) is $160. Since her combined credits Business Franchise Tax (D-30) on income that you received while you
are more than her county tax due, she should reduce the last entry (the are an Indiana resident, you may claim a credit against your Indiana
$200 CREED credit) by the $140 difference to $60. She will enter the adjusted gross income tax for those taxes. Do not claim a credit for taxes
full $100 credit for local taxes paid outside Indiana on Schedule G, line paid to the District of Columbia from Form D-40 except as provided for
1, and the $60 limited CREED credit on line 3a. Group C states.
Note. Megan may use the $140 remaining CREED credit to offset any NOTE. If you are an owner or beneficiary of a partnership, S
state adjusted gross income tax due on this year’s tax return (IT-40PNR, corporation, trust, or similar pass-through entity and the entity is
line 8). See additional instructions for the CREED credit on page 45. subject to a tax imposed by another state at the entity level while you
are an Indiana resident, you cannot take a credit for the tax imposed
Line 4 – College Credit at the entity level, even if the tax is allowable as a credit against your
If you donated money or property to an Indiana college or university, personal tax liability imposed by that state. This disallowance does not
you may be able to take a credit of up to $100 on a single return or apply to composite or withholding taxes imposed by another state.
$200 on a joint return. To claim this credit you must complete and
enclose Schedule CC-40. For additional information, see Schedule
CC-40 at www.in.gov/dor/tax-forms/2022-individual-income-tax- Group A Worksheet
forms and Income Tax Information Bulletin #14 at www.in.gov/dor/ A. Enter the amount of tax paid to the other
files/reference/ib14.pdf. state. (This does not mean the tax withheld
from your wages, but the actual tax figured
Important. You must maintain documentation of your contributions. on the other state’s return) ..................................... A _________
DOR can require you to provide this information at a later date. B. Multiply the amount of income from the
other state (that is subject to Indiana tax)
Note. Tuition paid to a college or university is not a contribution, and by 3.23% (.0323) ......................................................B _________
does not qualify for this credit.
C. Enter the amount of Indiana state income
tax shown on Form IT-40PNR line 8 .................. C _________
See the Combined Limitation on page 50.
The lesser of the amounts on A, B or C is your allowable credit for
Line 5 – Credit for Taxes Paid to Other States
taxes paid to other states.
If you received income from another state while you were an Indiana
resident, you must report that income on your Indiana income tax
You must enclose a copy of the income tax return (not just the W-2
return. You may be able to take a credit for taxes paid to another state.
forms) you filed with the other state to claim this credit. If the other
If you had income from another state, and had to pay taxes to that
state’s return is not enclosed, the credit will not be allowed. Likewise,
state, read the following instructions carefully.
if you have a foreign tax credit, complete the Group A Worksheet and
enclose federal Form 1116. If Form 1116 was not required, enclose
If you were an Indiana resident during part or all of the tax year and
Forms 1099-INT and/or 1099-DIV (or a substitute statement) to verify
had income from any of the states listed in Group A below, you should
the foreign tax and amount of income being taxed.
first find out what the other state’s rules are concerning the taxation of
your income.
IT-40PNR Booklet 2022 Page 43
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Schedule G: Offset Credits Continued If you were a full resident of one of the reciprocal states and had other
types of income from Indiana, or were a part-year Indiana resident,
Example. Sarah owns an interest in a partnership. Her share of the you will need to file Form IT-40PNR.
partnership’s income is $100,000 and her share of the partnership’s
bonus depreciation is $10,000. The partnership derived 40% of its Note. Winnings from Indiana riverboats and lotteries are not eligible
income from Illinois sources, and Sarah paid $4,900 of state income for the reciprocal agreement.
tax to Illinois. Her Indiana state tax liability is $5,000.
Caution. You may have to make estimated tax payments to Indiana. If
She will enter the following: the reciprocal state employer does not withhold Indiana withholding
A. $2,000 (tax paid to Illinois) on your wage income, or does not withhold enough, see page 9 for
B. $1,421 (($100,000 income +$10,000 bonus depreciation) information on how to figure and pay estimated tax.
*.4 (share of partnership income from Illinois sources)
*.0323 (tax due to Indiana) If you were a full-year resident of one of the reciprocal states and your
C. $5,000 (Form IT-40 line 8) income from Indiana was from wages, salaries, tips and commissions,
you should file Form IT-40RNR, Reciprocal Nonresident Income
Sarah’s credit is $1,421, the lesser of A, B, and C. Tax Return. If you were a resident of one of the reciprocal states and
had other types of income from Indiana, or were a part-year Indiana
Exception 1 – Gambling winnings from other states. If you’re not resident, you will need to file Form IT-40PNR.
required to file another state’s income tax return to report gambling
winnings from that state, enclose the W-2G issued by that state. Use Group C
the amount of state tax withheld by that state on Line A of the Group Reverse Credit (Credit taken on nonresident return)
A Worksheet.
Arizona Oregon Washington D.C.
Exception 2. If you are subject to Indiana state income tax on income: If you were an Indiana resident during the tax year and had income
• earned while an Indiana resident, from one of the states in Group C, you must pay Indiana tax on all your
• earned from a non-United States country or territory, and income. You will also need to file a nonresident return with the other
• that is not currently subject to tax in that country but will be state and claim a credit on their tax return for the Indiana tax paid.
taxed in a later year,
enclose the following information with your return: If you were a resident of a Group C state and had income from Indiana, you
• The country or territory in which the income is subject to tax must file an Indiana nonresident return, figure your tax, and then claim a
• The type of income (dividends, interest, etc.) credit for taxes paid to other states on the Indiana nonresident return. Make
• The amount of income sure to attach a copy of the other state’s return to substantiate the credit.
• The reason the income is deferred by the country
• The tax that will be due upon the income upon recognition by the Note. If you are an owner or beneficiary of a partnership, S corporation,
foreign country trust, or similar pass-through entity and the entity is subject to a tax
• The credit for taxes paid to another state claimed on the income imposed at the entity level by your state of residence, you cannot take a
(include a computation similar to the Group A worksheet above). credit for the tax imposed at the entity level, even if the tax is allowable
as a credit against your personal tax liability imposed by that state. This
Group B disallowance does not apply to composite or withholding taxes imposed
Reciprocal Agreement (Wages, Salaries, Tips, and Commissions Only)
by another state.
Kentucky Ohio Wisconsin
Michigan Pennsylvania Group D
No State Income Tax (No credit allowed)
If you were an Indiana resident during the tax year and had income Alaska South Dakota Washington
from one of the states listed in Group B, you are covered by a reciprocal
Florida Tennessee Wyoming
agreement. However, this agreement only applies to income from wages,
salaries, tips and commissions. If you had other types of income from Nevada Texas
these states (such as business income, farm income, etc.), use the Group
If you were an Indiana resident during the tax year and had income
A Worksheet to figure your credit.
from one of the states in Group D, you are not allowed to claim
this credit. These states do not have an income tax. You must file an
Normally, employers in these states will withhold Indiana state tax
Indiana resident return and pay Indiana tax on all your income.
from your wages because of the reciprocal agreement. However, if the
state tax they withheld is not for Indiana, you must file a claim for
See the Combined Limitation on page 50.
refund with that state. You still have to include this income on your
Indiana return and pay the Indiana tax. You’ll get some or all of the
Line 6 – Other Credits
other state’s taxes back by filing a refund claim with them.
Each of the following credits has been assigned a three-digit code
number. When claiming the credit on Schedule G under line 6, enter the
name of the credit, the three-digit code number and the amount claimed.
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Schedule G: Offset Credits Continued Community Revitalization Enhancement District
Credit 808
Airport Development Zone Credits See the Schedule G line 3 instructions for details about this credit. This
The following credits have been repealed: credit is available to offset both your state and local tax liabilities, and
Airport Development Zone Employment Expense Credit 800 any unused remainder is available to be carried forward. Owners of
Airport Development Zone Investment Cost Credit 801 pass-through entities are eligible for this credit.
Airport Development Zone Loan Interest Credit 802
If you did not use all of the available community revitalization
However, any previously approved yet unused credit is available to be enhancement district credit on Schedule G, line 3, the remaining
claimed. credit should be claimed on this line.
Enter the appropriate 3-digit code under line 6 if claiming any of these For more information, contact the Indiana Economic Development
credits. See the Combined Limitation on page 50. Corporation, One North Capitol, Suite 700, Indianapolis, IN, 46204,
or visit their website at iedc.in.gov.
Alternative Fuel Vehicle Manufacturer Credit 845
This credit has been repealed. However, any previously approved yet Note. If you have not used all of the community revitalization
unused credit is available to be claimed. Enter code 845 under line 6 if enhancement district credit, the unused portion should be carried
claiming this credit. over to next year’s tax return.
See the Restriction for Certain Tax Credits – Limited to One per Enter code 808 under line 6 if claiming this credit. See the Restriction
Project and the Combined Limitation on page 50 for additional for Certain Tax Credits - Limited to One per Project and the
limitations. Combined Limitation on page 50 for additional limitations.
Indiana’s CollegeChoice 529 Education Savings Plan Economic Development for a Growing Economy –
Credit 837 Nonresident Employees (EDGE-NR) 865
You may be eligible for a credit for contributions made to Indiana’s This credit is for incremental state income tax amounts that would
CollegeChoice 529 education savings plan. Also, you may make have been withheld on employees from reciprocal states if those
contributions to this fund for Indiana K-12 education purposes. While employees had been subject to Indiana state tax withholding. Owners
there are many 529 college savings plans available both in Indiana and of pass-through entities such as S corporations, partnerships, limited
nation-wide, only contributions made to this specific CollegeChoice liability companies, etc., are eligible for this credit. Unlike the EDGE
529 Education Savings Plan are eligible for this credit. and EDGE-R credits, the EDGE-NR credit is a non-refundable credit.
For more information about this credit, see Income Tax Information This credit is administered by the IEDC. Contact them at One North
Bulletin #98 at www.in.gov/dor/files/reference/ib98.pdf. This plan is Capitol, Suite 700, Indianapolis, IN 46204, via website at iedc.in.gov, or
administered through the Indiana Education Savings Authority. More by phone at (317) 232-8800.
information can be obtained online at www.in.gov/tos/iesa and at
www.collegechoicedirect.com. See Schedule IN-529 at www.in.gov/ The approved credit must be reported on Schedule IN-OCC, found at
dor/tax-forms/2022-individual-income-tax-forms to figure your www.in.gov/dor/tax-forms/2022-individual-income-tax-forms. Make
credit. This schedule must be enclosed when claiming the credit. sure to enclose this schedule with your tax filing. If you are claiming
this credit as an owner of a pass-through entity such as S corporations,
Enter code 837 under line 6 if claiming this credit. See the Combined partnerships, limited liability companies, etc., make sure to keep
Limitation on page 50. Schedule IN K-1 with your records as DOR can require you to provide
this information.
Coal Gasification Technology Investment Credit 806
A credit may be available for a qualified investment in an integrated About Enterprise Zone Credits
coal gasification power plant or a fluidized bed combustion technology. Certain areas within Indiana have been designated as enterprise zones.
This credit is available to owners of pass-through entities such as Enterprise zones are established to encourage investment and job
S corporations, partnerships, limited liability companies, etc. You growth in distressed urban areas. Visit www.aiez.org/#mem to look up
must file an application for certification with the Indiana Economic contact information for a particular enterprise zone.
Development Corporation (IEDC). For more information, contact
the Indiana Economic Development Corporation, One North Capitol, Sole proprietors who operate and/or invest in a business located in a zone
Suite 700, Indianapolis, IN, 46204, or visit their website at iedc.in.gov. and owners of pass-through entities such as S corporations, partnerships,
Also, see Income Tax Informa tion Bulletin #99 at www.in.gov/dor/ limited liability companies, etc., are eligible to claim the enterprise zone
files/reference/ib99.pdf. employment expense credit and/or the enterprise zone loan interest
credit. Contact the Indiana Economic Development Corporation, One
Enclose the certificate of compliance issued by IEDC to support this North Capitol, Suite 700, Indianapolis, IN, 46204, or visit their website at
credit. Enter 806 under line 6 if claiming this credit. iedc.in.gov for more information about these credits.
See the Combined Limitation on page 50.
IT-40PNR Booklet 2022 Page 45
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Schedule G: Offset Credits Continued Film and Media Production Tax Credit 869
Effective July 1, 2022, a credit is available for expenses incurred for
Enterprise Zone Employment Expense Credit 812 qualified film and media production expenses. The amount of the
This credit is based on qualified investments made within Indiana. It is taxpayer’s credit is equal to the taxpayer’s qualified film and media
the lesser of 10% of qualifying wages, or $1,500 per qualified employee, up production expenses multiplied by a percentage determined by the
to the amount of tax liability on income derived from the enterprise zone. Indiana Economic Development Corporation, but not more than 30%
of the expenses.
For more information see Income Tax Information Bulletin #66
at www.in.gov/dor/files/reference/ib66.pdf and Indiana Schedule Note. Certification for this credit must be obtained from the Indiana
EZ, Parts 1, 2 and 3 at www.in.gov/dor/tax-forms/enterprise-zone- Economic Development Corporation. See iedc.in.gov/indiana-advantages/
forms. Also, you may contact the Indiana Economic Development investments/film-and-media-tax-credit for further information.
Corporation, One North Capitol, Suite 700, Indianapolis, IN, 46204,
call (317) 232-8827, or visit their website at iedc.in.gov. This credit must be reported on Schedule IN-OCC, found at www.
in.gov/dor/tax-forms/2022-individual-income-tax-forms. Make sure
Note. Schedule EZ must be enclosed if claiming this credit. to enclose this schedule with your tax filing.
Enter code 812 under line 6 if claiming this credit. Also, see the
Combined Limitation on page 50. Enclose the certification letter from the IEDC with the return,
otherwise the credit will be denied.
Enterprise Zone Investment Cost Credit 813
This credit is based on qualified investments made within Indiana. Foster Care Donations Credit 867
It can be up to a maximum of 30% of the investment, depending on Effective starting in taxable year 2022, a credit for donations to
the number of employees, the type of business and the amount of qualifying foster care organizations is available. The credit is 50%
investment in an enterprise zone. of the donation made to qualifying organizations, up to a maximum
of $10,000 per taxable year. In addition, no more than $2,000,000 in
For more information about this credit, see Income Tax Information credits can be awarded during a state fiscal year. See www.in.gov/
Bulletin #66 at www.in.gov/dor/files/reference/ib66.pdf, contact the dor/tax-forms/foster-care-credit-donation-information for further
Indiana Economic Development Corporation, One North Capitol, information regarding the application and approval process.
Suite 700, Indianapolis, IN, 46204, or visit their website at iedc.in.gov.
This credit must be reported on Schedule IN-OCC, found at www.
Note. See the Restriction for Certain Tax Credits - Limited to in.gov/dor/tax-forms/2022-individual-income-tax-forms. Make sure
One per Project and the Combined Limitation on page 50 for to enclose this schedule with your tax filing.
additional limitations.
Enclose the approval letter from the Department of Revenue with the
Enter code 813 under line 6 if claiming this credit. return, otherwise the credit will be denied.
Enterprise Zone Loan Interest Credit 814 Headquarters Relocation Credit 818
This credit can be for up to 5% of the interest received from all Some or all of this credit may be available to be refunded. See below
qualified loans made before January 1, 2018, for use in an Indiana for more information.
enterprise zone.
A business may be eligible for a credit if it meets one of two sets of
For more information, and how to calculate this credit, see Income criteria. The first set of criteria (“first test”) is that the business meets
Tax Information Bulletin #66 at www.in.gov/dor/files/reference/ all of the following:
ib66.pdf and Indiana Schedule LIC at www.in.gov/dor/tax-forms/ • Has an annual worldwide revenue of $50 million;
enterprise-zone-forms. • Has at least 75 Indiana employees (for credits awarded before July
1, 2022); and
Note. Schedule LIC must be enclosed if claiming this credit. Contact • Relocates its corporate headquarters to Indiana.
the Indiana Economic Development Corporation, One North Capitol,
Suite 700, Indianapolis, IN, 46204, call (317) 232-8827, or visit their The second set of criteria (“second test”) is that the business meets
website at iedc.in.gov for additional information. either (1) or (2), meets (3), and meets (4) or (5):
1. Received at least $4 million in venture capital in the six months
Enter code 814 under line 6 if claiming this credit. Also, see the immediately preceding the business’s application for this tax credit.
Combined Limitation on page 50. 2. Closes on at least $4,000,000 in venture capital not more than six
months after submitting the business’s application for this tax credit.
Ethanol Production Credit 815 3. Has at least 10 Indiana employees (for credits awarded before July
This credit has been repealed. However, any previously approved yet 1, 2022).
unused credit is available to be claimed. 4. Relocates its corporate headquarters to Indiana.
5. Relocates the number of jobs equal to 80% of the business’s total
Enter code 815 under line 6 if claiming this credit. See the Combined payroll during the immediately preceding quarter to an Indiana
Limitation on page 50 for additional limitations. location.
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Schedule G: Offset Credits Continued Note. See the Restriction for Certain Tax Credits - Limited to
One Per Project and the Combined Limitation on page 50 for
The credit may be as much as 50% of the cost incurred in relocating additional limitations.
the taxpayer’s headquarters. For more information (including
limitations on the credit and the application process), see Income Tax The approved credit must be reported on Schedule IN-OCC, found at
Information Bulletin #97, available at www.in.gov/dor/files/reference/ www.in.gov/dor/tax-forms/2022-individual-income-tax-forms. Make
ib97.pdf. This credit is administered by the IEDC. Contact them at sure to enclose this schedule with your tax filing. If you are claiming
One North Capitol, Suite 700, Indianapolis, IN 46204, via website at this credit as an owner of a pass-through entity such as S corporation,
iedc.in.gov, or by phone at (317) 232-8800. partnership, limited liability company, etc., make sure to keep
Schedule IN K-1 with your records as DOR can require you to provide
Beginning with the 2022 tax year, this credit must be reported on Schedule this information.
IN-OCC, found at www.in.gov/dor/tax-forms/2022-individual-income-
tax-forms. Make sure to enclose this schedule with your tax filing. Hoosier Business Investment Credit – Logistics 860
This credit is for qualified expenditures for certain logistics investments.
Submit a copy of the certificate from the IEDC verifying the amount Owners of pass-through entities are eligible for this credit.
of tax credit for the taxable year with the return. Otherwise, the credit
will be denied. This credit is administered by the Indiana Economic Development
Corporation (IEDC), One North Capitol, Suite 700, Indianapolis, IN,
Enclose proof of the relocation costs as well as proof of employment 46204. Visit the IEDC website at iedc.in.gov or call (317) 234-4046,
of the minimum number of employees in Indiana and, if applicable, and get Income Tax Information Bulletin #95 at www.in.gov/dor/files/
payroll in both Indiana and everywhere. See the Combined reference/ib95.pdf for additional information.
Limitation on page 50 for additional limitations.
Note. See the Restriction for Certain Tax Credits - Limited to
Important. If the IEDC has granted a refundable credit under the One Per Project and the Combined Limitation on page 50 for
second test, see the instructions on page 37 for completing Schedule additional limitations.
F, line 9. Maintain the documentation provided to you that supports
the refundable portion of this credit as DOR may request it. The approved credit must be reported on Schedule IN-OCC, found at
www.in.gov/dor/tax-forms/2022-individual-income-tax-forms. Make
Historic Building Rehabilitation Credit 819 sure to enclose this schedule with your tax filing. If you are claiming
This credit has been repealed. However, any previously approved yet this credit as an owner of a pass-through entity such as S corporations,
unused credit is available to be claimed. partnerships, limited liability companies, etc., make sure to keep
Schedule IN K-1 with your records as DOR can require you to provide
Enter code 819 under line 6 if claiming this credit. See the Combined this information.
Limitation on page 50 for additional limitations.
Indiana’s Research Expense Credit 822
Important. The credit will need to be recaptured if, within five years Indiana has a research expense credit that is similar to the federal
of the completion of the project: credit for research and experimental expenses paid in carrying on your
• Ownership of the property, and/or trade or business in Indiana. Owners of pass-through entities such as S
• Additional modifications are undertaken to the property that do corporations, partnerships, limited liability companies, etc., are eligible
not meet required standards. to claim this credit. Enclose your Schedule IN K-1 to support your claim.
Report any recapture on Schedule E, line 3. See Line 3 instructions on A completed Form IT-20REC must be kept with your records as DOR
page 33 for more information. can require you to provide this information. Get Form IT-20REC at www.
in.gov/dor/tax-forms/2022-corporatepartnership-income-tax-forms.
Hoosier Business Investment Credit 820
This credit is for qualified investments, which include the purchase Enter code 822 under line 6 if claiming this credit. Also, see the
of new telecommunications, production, manufacturing, fabrication, Combined Limitation on page 50.
processing, refining or finishing equipment. Owners of pass-through
entities such as S corporations, partnerships, limited liability Individual Development Account Credit 823
companies, etc., are eligible for this credit. A credit is available for qualified contributions made to a community
development corporation participating in an Individual Development
This credit is administered by the Indiana Economic Development Account (IDA) program. Owners of pass-through entities such as S
Corporation (IEDC), One North Capitol, Suite 700, Indianapolis, IN, corporations, partnerships, limited liability companies, etc. may are
46204. Visit the IEDC website at iedc.in.gov or call (317) 232-8800 for eligible to claim this credit.
additional information.
The organization must have an approved program number from the
Also, see Income Tax Information Bulletin #95 at www.in.gov/dor/ Indiana Housing and Community Development Authority (IHCDA)
files/reference/ib95.pdf. before a contribution qualifies for pre-approval. Applications for the
credit are filed through the IHCDA.
IT-40PNR Booklet 2022 Page 47
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Schedule G: Offset Credits Continued Enter code 827 under line 6 if claiming this credit. See the Combined
Limitation on page 50 for additional limitations.
S corporations and partnerships may take this credit and pass through
the unused portion to their shareholders and partners. Natural Gas Commercial Vehicle Credit 858
This credit has sunset. No new credit will be allowed for vehicles
To request additional information about the definitions, procedures placed in service after Dec. 31, 2016. However, any previously
and qualifications for obtaining this credit, contact: Indiana Housing approved yet unused credit is available to be claimed. This
and Community Development Authority, 30 S. Meridian St., Suite carryforward credit is available to owners of pass-through entities such
1000, Indianapolis, IN 46204, telephone number (317) 232-7777. as S corporations, partnerships, limited liability companies, etc.
Keep the approval certification from IEDC or letter of assignment with The carryforward portion of the previously approved credit must
your records as DOR can require you to provide this information. be reported on Schedule IN-OCC, found at www.in.gov/dor/tax-
forms/2022-individual-income-tax-forms. Make sure to enclose this
Enter code 823 under line 6 if claiming this credit. Also, see the schedule with your tax filing. If you are claiming this credit as an
Combined Limitation on page 50. owner of a pass-through entity, such as S corporations, partnerships,
limited liability companies, etc., make sure to keep Schedule IN K-1
Industrial Recovery Credit 824 with your records as DOR can require you to provide this information.
This credit is based on a taxpayer’s qualified investment in a vacant
industrial facility located in a designated industrial recovery site. If the Note. See the Combined Limitation page 50 for additional
Indiana Economic Development Corporation approves the application limitations.
and the plan for rehabilitation, you are entitled to a credit based on the
“qualified investment.” The minimum age for a facility to be eligible Neighborhood Assistance Credit 828
for this credit has been reduced from 20 years to 15 years. This credit If you made a contribution or engaged in activities to upgrade areas
is available to owners of pass-through entities such as S corporations, in Indiana, you may be able to claim a credit for this assistance.
partnerships, limited liability companies, etc. Contact the Indiana Housing & Community Development Authority,
Neighborhood Assistance Program, 30 S. Meridian, Suite 1000,
Note. Except for in situations described in the next sentence, a Indianapolis, IN 46204, telephone number (317) 232-7777 (800-872-
taxpayer is entitled to receive this credit only for a qualified investment 0371 outside Indianapolis), for more information.
made before January 1, 2020. A taxpayer is entitled to receive a credit
for a qualified investment made after December 31, 2019, and before Owners of pass-through entities such as S corporations, partnerships,
January 1, 2030, if the taxpayer is awarded a credit under: limited liability companies, etc., are eligible for this credit.
• An application approved by the Indiana Economic Development
Corporation (IEDC) before January 1, 2020; or Important. Do not report fees paid to your neighborhood association
• An agreement entered into by the taxpayer and IEDC before on this line. They are not eligible for this credit.
January 1, 2021.
Important. Any unused credit existing before Jan. 01, 2020, is still Enter code 828 under line 6 if claiming this credit. Also, see the
eligible for carryforward for an unlimited number of years. Combined Limitation on page 50.
For additional information regarding procedures for obtaining this New Employer Credit 850
credit, contact the Indiana Economic Development Corporation, One This credit has been repealed. However, any previously approved yet
North Capitol, Suite 700, Indianapolis, IN 46204, call (317) 232-8800, unused credit is available to be claimed.
or visit their website at iedc.in.gov.
Enter code 850 under line 6 if claiming this credit. See the Combined
Note. See the Restriction for Certain Tax Credits - Limited to One Limitation on page 50 for additional limitations.
per Project and the Combined Limitation on page 50 for additional
limitations. Enter code 824 under line 6 if claiming this credit. Public School Educator Expense Credit 861
If you are an eligible educator working for an Indiana school
Military Base Investment Cost Credit 826 corporation, you may be entitled to a credit for qualified expenses
This credit has been repealed. However, any previously approved yet paid for certain classroom supplies. The credit can be as much as $100
unused credit is available to be claimed. You must enclose approval ($200 if married filing joint and both spouses meet the requirements,
certification from IEDC or a letter of assignment with your return. but not more than $100 each).
Enter code 826 under line 6 if claiming this credit. See the Combined You are an eligible educator if, during the taxable year, you are
Limitation on page 50 for additional limitations. employed as a Kindergarten -12 Indiana public school:
• Teacher
Military Base Recovery Credit 827 • Librarian
This credit has been repealed. However, any previously approved yet • Counselor
unused credit is available to be claimed. You must enclose approval • Principal
certification from IEDC or a letter of assignment with your return. • Superintendent
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Schedule G: Offset Credits Continued Redevelopment Tax Credit 863
You may be eligible for a credit if you make a qualified investment for
Public school means a school maintained by an Indiana school the redevelopment or rehabilitation of real property located within a
corporation, and includes charter schools. Private schools, parochial qualified redevelopment site.
schools and homeschools are not public schools.
This credit is administered by the Indiana Economic Development
Qualified expenses are amounts you paid or incurred during the tax Corporation (IEDC), One North Capitol, Suite 700, Indianapolis, IN,
year for certain classroom supplies, which include books, supplies, 46204. Visit the IEDC website at iedc.in.gov or call (317) 232-8800 for
computer equipment (including related software and services), additional information.
other equipment, and supplementary materials that you use in the
classroom. For courses in health and physical education, expenses for The approved credit must be reported on Schedule IN-OCC, found
supplies are qualified expenses only if related to athletics. at www.in.gov/dor/tax-forms/2022-individual-income-tax-forms.
Make sure to enclose this schedule with your tax filing. Also, see the
Non-qualified expenses are certain expenses not allowed when Combined Limitation on page 50.
figuring this credit. They include:
• Certain expenses for professional development courses related to Residential Historic Rehabilitation Credit 831
the curriculum, or to the students, that the educator teaches. A credit is available for the repair and rehabilitation of residential
• COVID-19 protective items, such as face masks; disinfectant for property that is listed on the Indiana Register of Historic Sites and
use against COVID-19; hand soap; hand sanitizer; disposable Structures, is at least 50 years old, and will be used as your primary
gloves; tape, paint, or chalk to guide social distancing; physical residence. All work must meet the Secretary of the Interior’s Standards
barriers (for example, clear plexiglass); air purifiers; and other for Rehabilitation of Historic Properties.
items recommended by the CDC to be used for the prevention of
the spread of COVID-19. For more information about this credit, see Income Tax Information
Bulletin #87A at www.in.gov/dor/files/reference/ib87a.pdf. Also, contact
Reimbursements. You must reduce your expenses for the qualified the Office of Community and Rural Affairs at One North Capitol, Suite
supplies by any reimbursements you received that were not included 600 Indianapolis, IN 46204-2027, call (317) 233-3762, or visit www.
in box 1 of your Form W-2. in.gov/ocra.
Example 1. Jonah spent $40 for qualified supplies; he was reimbursed Enter code 831 under line 6 if claiming this credit. Also, see the
for $30 out of petty cash, none of which was included on his W-2. He Combined Limitation on page 50.
will claim the $10 difference as a credit.
Riverboat Building Credit 832
Figure the credit. The amount of the credit is the lesser of: This credit has been repealed. However, any previously approved yet
• The total amount paid for qualified supplies, less any unused credit is available to be claimed.
reimbursements for those qualified supplies not included on line
1 of your W-2, or Enter code 832 under line 6 if claiming this credit. See the Combined
• $100. Limitation below for additional limitations.
Example 2. Liam was an 8th grade teacher for four months at an School Scholarship Credit 849
Indiana public school. During that time period he spent $314 for A credit is available for donations to certain scholarship-granting
qualified supplies. He is eligible to claim a $100 credit. organizations (SGOs). The amount of a taxpayer’s credit is equal
to 50% of the amount of the contribution made to the SGO for a
Example 3. Chris and Pat are employed as teachers at an Indiana public school scholarship program. In some cases, the department may
high school. They are filing a joint tax return. During the year Chris round the credit down to the nearest dollar if the department receives
spent $74 for qualified supplies; Chris’s credit is $74. Pat spent $214 for information that the credit should be the amount as rounded down.
qualified supplies; Pat’s credit is $100 (limited to the lesser of the amount
Pat spent or $100). They will claim a $174 combined credit. While there are no limits to how much a donor can contribute to a
qualified SGO, the entire tax credit program cannot award more than
Important. Make sure to keep a copy of the expense receipts used to $18.5 million in credits per state fiscal year of July 1, 2022 – June 30, 2023.
figure this credit as DOR can require you to provide this information
at a later date. To qualify for the credit, you must make a contribution to a scholarship
granting organization that is certified by Department of Education.
Note. Claiming an educator expense deduction on your federal tax Visit the Indiana Department of Education’s website at www.in.gov/doe/
return in no way prohibits you from being eligible to claim this credit students/indiana-choice-scholarship-program for additional information.
on your state tax return.
The approved credit must be reported on Schedule IN-OCC, found
Enter code 861 under line 6 if claiming this credit. See the Combined at www.in.gov/dor/tax-forms/2022-individual-income-tax-forms.
Limitation on page 50. Make sure to enclose this schedule with your tax filing. Also, see the
Combined Limitation below.
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Schedule G: Offset Credits Continued How to Adjust the Amount of Credit to Enter
(Examples)
Venture Capital Investment Credit Example. Tanya is eligible to claim both a $200 College Credit and a 835
A taxpayer that provides qualified investment capital to a qualified $300 Credit for Taxes Paid to Other States, for a $500 total amount of
Indiana business may be eligible for this credit. offset credits. Her state adjusted gross income tax due (IT-40PNR, line
8) is $360. Since her combined credits are $140 more than her state
Certification for this credit must be obtained from the Indiana tax due, she should reduce the last entry (the $300 Credit for Taxes
Economic Development Corporation Development Finance Office, Paid to Other States) by the $140 difference to $160. She will enter the
VCI Credit Program, One North Capitol, Suite 700, Indianapolis, IN full$200 College Credit on Schedule G, line 4, and the $160 limited
46204, telephone number (317) 232-8800, or visit iedc.in.gov. Credit for Taxes Paid to Other States on line 5.
Beginning with the 2020 tax year, this credit must be reported on Example. Matthew has a $500 Indiana College Choice 529 Savings
Schedule IN-OCC, found at www.in.gov/dor/tax-forms/2022- Plan Credit and a $600 Industrial Recovery Credit. His state adjusted
individual-income-tax-forms. Make sure to enclose this schedule with gross income tax due (IT-40PNR, line 8) is $700. He will report the
your tax filing. If you are claiming this credit as an owner of pass- full $500 Indiana College Choice 529 Savings Plan Credit on Schedule
through entity such as S corporation, partnership, limited liability G, line 6a, and enter $200 of the Industrial Recovery Credit on line 6b.
company, etc., make sure to keep Schedule IN K-1 with your records He will carry the $400 remaining unused Industrial Recovery Credit
as DOR can require you to provide this information. over to next year’s tax return.
See the Restriction for Certain Tax Credits - Limited to One per
Project and the Combined Limitation below for additional limitations.
Schedule H
Venture Capital Investment Credit – Qualified Indiana Section 1: Residency Information
Investment Fund 868
A taxpayer who provides qualified investment capital (either debt or Your (and Spouse’s) Information
equity capital) to a qualified Indiana investment fund may be eligible Tell us where you were a resident during 2022 by completing this area.
for this credit. Enter the 2-letter name for the other state(s) where you lived.
Note. Certification for this credit must be obtained from the Indiana Complete the area asking for the time period you lived in Indiana
Economic Development Corporation, Development Finance Office, VCI and/or other state(s). If you lived in more than one state other than
Credit Program, One North Capitol, Suite 700, Indianapolis, IN 46204. Indiana, let us know where and when.
This credit must be reported on Schedule IN-OCC, found at www. Note. If you were a resident of a foreign country during all or a part
in.gov/dor/tax-forms/2022-individual-income-tax-forms. Make sure of 2022, enter the 2-letter code “OC” for other country. In addition,
to enclose this schedule with your tax filing. indicate whether or not you filed a tax return with the state/country
you were a resident of in 2022.
Apply online through the IEDC’s website at iedc.in.gov or call (317)
232-8800 for more information. Schedule H
Enclose the certification letter from the IEDC with the return, Section 2: Additional Required Information
otherwise the credit will be denied.
Line 1 – Federal Filing Information
You must place an “X” in the “yes” or “no” box to answer the question:
Restriction for Certain Tax Credits - Limited to One “Are you filing a federal income tax return for 2022?”
Per Project
A taxpayer may not be granted more than one credit for the same
Line 2 – Extension of Time to File Information
project. The credits that are included are the alternative fuel vehicle
Place an “X” in the box on line 2a if you have a federal extension of
manufacturer credit, community revitalization enhancement district
time to file (you filed federal Form 4868, Form 2350, or made an
credit, enterprise zone investment cost credit, Hoosier business
online extension payment). Place an “X” in the box on line 2b if you
investment credit, industrial recovery credit, and the venture capital
have an Indiana extension of time to file (you filed Form IT-9 or made
investment credit. Apply this restriction first when figuring your
an online extension payment).
credits. Then apply the Combined Limitation below.
Line 3 – Farmers and Fishermen
Combined Limitation Farmers and fishermen have special filing considerations. If at least
There is one final limitation if you have more than one credit to be
two-thirds (2/3) of your gross income is from farming or fishing,
entered on lines 4 through 7 of Schedule G. These credits, when
mark the box provided on Schedule H, line 3. This will make sure
combined, cannot be greater than the state adjusted gross income
that a penalty for the underpayment of estimated tax is not assessed
tax shown on Form IT-40PNR line 8; if they are, adjust the amounts
provided you have followed through by:
before you enter them. This includes any credits reported on Schedule • Paying all your estimated tax on or by Jan. 17, 2023, and filing
IN-OCC, and carried to line 7 of Schedule G.
your Form IT-40PNR by April 18, 2023, or
Page 50 IT-40PNR Booklet 2022
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Schedule H, Section 2: Additional Required Information Continued 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.
• Filing your Form IT-40PNR by March 1, 2023, and paying all the
tax due at that time. You are not required to make an estimated You may decide at any time to revoke the authorization for DOR to
tax payment if you use this option. speak with your personal representative. You will need to provide a
signed statement indicating you revoke this authorization. Include
Important. If you have checked the box, you must keep the completed your name, Social Security number and the year of your tax return.
Schedule IT-2210 with your records as DOR may request it at a later date. Mail your statement to Indiana Department of Revenue, P.O. Box 40,
Indianapolis, IN 46206-0040.
Line 4 – Non- or Partially- Responsible Spouse
Place an X in this box if you are a spouse who claims to not be liable Paid Preparer Information
for all or part of a tax liability because the remaining liability is that of Have your paid preparer complete this area (even if the paid preparer
the other spouse. You may be filing as a spouse who claims to not be is the same individual designated as your personal representative). The
liable for all or part of a tax liability if: paid preparer must provide:
• You have a tax liability reported on a joint return for which you • The name of the firm that he/she represents,
are not responsible; • The preparer’s tax identification number (PTIN), and
• You have a tax liability reported on a joint return, but you are • The firm’s address or his/her address if self-employed.
responsible only for a portion of the liability; or
• You have received an assessment from the Indiana Department Opt-Out Designation
of Revenue and you are not liable for all or part of the assessment There are many benefits to electronic filing, which include:
because the assessment arises from the tax attributable to your • Elimination of math errors
spouse. • Faster refunds
If filing as a non- or partially- responsible spouse who claims to not Paid preparers are required to electronically file all Indiana individual
be liable for all or part of a tax liability, complete and submit Schedule income tax returns if they prepare more than 10 tax returns annually.
IN-40PA (www.in.gov/dor/tax-forms/miscellaneous-individual- If you use a paid preparer and do not want your tax return to be filed
forms), along with any supporting documentation. electronically, you must complete a state Form IN-OPT. This form
requires your signature (and your spouse’s, if filing jointly), and must
Line 5 – Date of Death be maintained by your paid preparer with his or her records. Get Form
If the taxpayer and/or spouse died during 2022, and this return is IN-OPT at www.in.gov/dor/tax-forms/2022-individual-income-tax-
being filed with his/her name on it, make sure to enter the month forms for more information.
and day of death in the appropriate box. For example, a date of death
of Jan. 9, 2022, would be entered as 01/09/2022. See instructions Make sure you keep a copy of your completed tax return, including
beginning on page 6 for more information. all required enclosures, such as W-2s and schedules.
Note. If the taxpayer and/or spouse died before 2022, or after Dec. 31,
2022, but before filing his or her tax return, do not enter his/her date
of death in this box. County Tax: Schedule CT-40PNR
If you live or work in an Indiana county as of January 1 of the tax year,
you will probably owe county tax. Complete the county tax Schedule
Personal Representative Information CT-40PNR to figure if you do owe, and how much it will be.
Typically, DOR will contact you (and your spouse, if filing jointly) if
there are any questions or concerns about your tax return. If you wish
County Where You Lived Defined
to allow DOR to discuss your tax return with someone else (e.g. the
The county where you lived is the county where you maintained your
person who prepared it, a relative or friend, etc.), you will need to
home on Jan. 1, 2022. If you had more than one home on this date,
complete this area.
then your county of residence as of Jan. 1, 2022, was:
• Where you were registered to vote. If this did not apply, then your
First, you must check the “Yes” box, which follows the sentence,
county of residence was
“I authorize DOR to discuss my tax return with my personal • Where your personal automobile was registered. If this did not
representative.”
apply, then your county of residence was
• Where you spent the majority of your time in Indiana during 2022.
Next, enter the name of the individual you are designating as your
personal representative, that person’s telephone number, and that
Did You Move During the Year?
person’s complete address.
If you moved your residence to a different Indiana county (or out of
state) during the year, but after Jan. 1, 2022, the county where you
If you complete this area, you are authorizing DOR to be in contact
lived for tax purposes will not change until next year.
with someone other than you concerning information about this tax
return.
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County Tax Continued Special Note to Married Taxpayers Filing a Joint Return
• If you lived in different Indiana counties on Jan. 1, 2022 you need
County Where You Worked Defined to figure your county tax separately on Section 1.
The county where you worked (county of principal employment) is the • If both of you lived out-of-state on Jan. 1, 2022, but worked in
county where your main place of business was located or where your different Indiana counties, you must figure your tax separately on
main work activity was performed on Jan. 1, 2022. If you began working Section 2.
in another county (or out of state) after Jan. 1, 2022, the county where • If only one of you is subject to county tax, then you may use all of
you worked for tax purposes will not change until next year. the exemptions from Schedule D, line 8, except for your spouse’s
personal exemption, to figure your tax.*
Example. Jessie worked in Marion County, Indiana, on Jan. 1, 2022.
She quit that job and began a new one in Johnson County, Indiana, on *Example. On Schedule D Jack and Sue claim $2,000 on line 1,
Feb. 10, 2022. She will enter the Marion County two-digit code “49” in one exemption ($1,000) on line 2, and one additional dependent
the County Where You Worked box on the front of Form IT-40PNR exemption ($1,500) on line 3. The line 6 amount is $4,500. The line 7
even though she changed jobs during the year. amount is .40. Jack can use $1,400 (the $3,500 exemption amount x .40
= $1,400) to figure his county tax.
If you had more than one job on Jan. 1, 2022, your principal place of
employment is the job where you worked the most hours and earned
the most income.
County Tax Schedule CT-40PNR
If, on Jan. 1, 2022, your county of principal employment was not in Section 1: Line-by-Line Instructions
Indiana, write county code “00” (out-of-state) in the County Where
You Worked box on the front of the IT-40PNR. Where Did You Live?
Did you live in an Indiana county on Jan. 1, 2022? If “yes,” complete
Exception. If you worked in any of the following states on Jan. 1, 2022, Section 1 for yourself, and skip Section 2. If your answer is “no,” skip
enter their two-digit code number (instead of 00): Section 1 and go to Section 2: Line-By-Line instructions.
If you are filing a joint return, did your spouse live in an Indiana
State Use Code # State Use Code # county on Jan. 1, 2022? If yes, complete Section 1 for your spouse, and
Illinois 94 Ohio 97 skip Section 2. If your answer is no, skip Section 1 and go to Section 2:
Line-By-Line instructions.
Kentucky 95 Pennsylvania 98
Michigan 96 Wisconsin 99 Line 1
If you are completing Section 1, state taxable income means:
Principal Employment Income • state taxable income from Line 7 of Form IT-40PNR; plus
You must figure your principal employment income if, on Jan. 1, 2022, • any Indiana-source income from wages, tips, or other
you lived out-of-state and were employed in an Indiana county. Your compensation earned while you are a resident of a reciprocal state
principal employment income is income you earned from your main (Kentucky, Michigan, Ohio, Pennsylvania, or Wisconsin).
Indiana work activity (job) for the entire year. See instructions for
Section 2, line 1 on page 54 for more information. If you are filing a single return or are married filing separately, enter in
Column A your state taxable income.
Military Personnel
If you were stationed in Indiana, your county of residence is the If you are filing a joint return and you both lived in the same Indiana
county where you lived on Jan. 1 of the year you entered the military county on Jan. 1, 2022, enter in Column A your combined state taxable
service. If, on Jan. 1, 2022, you were stationed outside Indiana and income. Leave Column B blank.
your family was with you, write county code “00” (out-of-state) in all
the county boxes on Form IT-40PNR (you won’t owe a county tax). Example. On Jan. 1, 2022, Jack and Diane lived in the same Indiana
county. They will enter their combined state taxable income in
If, however, you maintained your home in an Indiana county and/or Column A.
your spouse and family were still living in an Indiana county on Jan.
1, 2022, you are considered to be a resident of that county and will be If you are filing a joint return and you and your spouse lived in different
subject to county tax. Indiana counties on Jan. 1, 2022, enter each person’s share of state taxable
income in the appropriate columns.
Retired Persons, Homemakers or Unemployed
If you were retired, a homemaker, or were unemployed on Jan. 1, Following are three examples for when a taxpayer and spouse file
2022, put your county of residence two-digit code number in both married filing jointly but live in different Indiana counties on
the Indiana County where you lived and Indiana County Where You January 1 of the tax year.
Worked boxes on Form IT-40. Do not write the word “Retired,”
“Homemaker” or “Unemployed” over the boxes. Example 1. Simon and Tina married in 2022 and are filing a joint
return. On Jan. 1, 2022, Simon lived in Greene County (Indiana) and
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County Tax Continued Their total exemptions before proration are $4,500 ($1,000 each
for Sam and Molly, $1,000 for Sebastian, plus the $1,500 additional
Tina lived in Clay County (Indiana). Their federal adjusted gross dependent exemption for Sebastian).
income is $55,400. Their proration percentage from Schedule A,
Line 21D is .549. None of their income is derived from wages from a Sam’s Indiana wage income is $49,000; Molly’s is $45,000. They
reciprocal state. Their state taxable income (subject to tax in Indiana) claimed a $2,500 homeowner’s property tax deduction. They moved
of $29,302 includes the following breakdown: to Minnesota in November of the tax year and earned $31,333 after
moving there. Their proration amount is 75% (.75).
Simon: $23,000 wages
Molly will use all of the prorated exemptions except for Sam’s personal
+ 200 (½ joint interest income)
exemption ($1,000 x .75 = $750) when figuring her share of income
- 549 exemption* subject to county tax since she has the higher county tax rate.
19,651 income for CT-40PNR Section 1, line 1 Column A
Their individual share of the $88,125 state taxable income reported
on line 7 of their Form IT-40PNR is to be reported on Schedule CT-
Tina: $10,000 wages 40PNR between Column A and Column B in the following way:
+ 200 (½ joint interest income)
- 549 exemption* Sam: $49,000 wages
9,651 income for CT-40PNR Section 1, line 1 Column B - 1,250 (½ property tax deduction)
- 750 exemption total (after proration)*
* Exemptions. Schedule D line 8 is .549 x $2,000 = $1,098. Simon and
Tina will each use one-half of that total, or $549. 47,000 amount for CT-40PNR Section 1, line 1 Column A
Example 2. Same facts as the example above, except that Simon and Molly: $45,000 wages
Tina moved to Ohio but Simon continued to work in Indiana. Simon’s - 1,250 (½ property tax deduction)
wages from the period after moving to Ohio were $5,000, not included
on Line 7 of the IT-40 PNR. Simon would use $25,000 ($20,000 - 2,625 exemption total (after proration)*
earned while an Indiana resident plus $5,000 earned from Indiana 41,125 amount for CT-40PNR Section 1, line 1 Column B
sources while an Ohio resident) instead of $20,000, which would
make his income for CT-40PNR, Section 1, line 1 Column A $24,651 *Sam’s prorated exemption total is $750 ($1,000 x .75). Molly’s
($25,000+$200-$549). prorated exemption total is $2,625 ($3,500 x .75).
Use of exemptions when separating income. Sam will enter $47,000 on line 1A and Molly will enter $41,125 on line
Each individual must use his/her own personal exemption when 1B.
figuring his/her share of net income subject to county tax. Additional
exemptions, such as for dependents, age 65 or older, etc., should be Line 2
divvied up in whole* in a way that provides the most benefit to the Find your county on the County Income Tax Chart located on the
individuals. This usually results with the individual with the higher back of Schedule CT-40PNR. Find the rate from the County Tax Rate
county tax rate using all of the exemptions except for his/her spouse’s column and enter it here.
personal exemption.
Line 4
*Exemptions must be assigned in whole (before applying the proration Add the amounts from line 3, Columns A and B. If you were a Perry
percentage). For example, a $1,000 exemption may not be separated County (Indiana) resident and worked in the Kentucky counties of
into $700 to be used by one spouse, with the remaining $300 to Breckinridge, Hancock or Meade, review Lines 5 and 6 instructions.
be used by the other spouse. The full $1,000 (times the proration Otherwise, skip to line 7.
percentage) must be used by one spouse only.
Lines 5 and 6
Note. The total amount of exemptions used in Section 1 may not be If you:
greater than the total amount of exemptions reported on Schedule D, • Were a Jan. 1, 2022 Perry County resident,
line 8. • Worked in the Kentucky counties of Breckinridge, Hancock and/
or Meade; and
Example 3. Sam and Molly married in January 2022 and are filing • The income from those counties was subject to either a Kentucky
a joint return. On Jan. 1, 2022, Sam lived in County A, which has a county income tax or a local income tax for a locality in those
county tax rate of .01. Molly lived in County B, which has a county counties,
tax rate of .025. They claim their five-year old son Sebastian as a review the following instructions. Otherwise, skip these lines and go
dependent, and also claim him as an additional dependent exemption. to line 7.
IT-40PNR Booklet 2022 Page 53
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County Tax Continued Example. Jo Anne and her husband John are Illinois residents. They
moved to Indiana two years ago when John, who is in the military,
Line 5 – If the Kentucky counties of Breckinridge, Hancock and/or was stationed in Indiana. She has an Indiana job. Jo Anne reported
Meade, or a locality located within these counties figured a locality tax her $35,000 Indiana-source wage income on Schedule A, lines 2A
on your income, enter the amount of that income here. and 2B. She reported the $35,000 as a military spouse earned income
deduction on Schedule C, line 11. That $35,000 income is not subject
Line 6 – Multiply the amount on line 5 by .0181 and enter the result to Indiana county tax. She will not enter it on Schedule CT-40PNR,
here. Continue to line 7. Section 2, line 1B.
Line 7 If you had more than one job at different times during the year
Subtract any entry on line 6 from the amount on line 4. Continue with (not including part-time employment), and that income is taxed on
Section 2 below if you are married filing jointly and your spouse needs Indiana Schedule A, Column B, add the income from those jobs and
to complete it. Otherwise, enter the result here and on line 9 of Form enter here.
IT-40PNR.
Example. Sarah had two full-time jobs in Indiana during the year. She
earned $13,000 from her first job, which she held from January through
County Tax Schedule CT-40PNR April. She began a new job in May and worked through year’s end,
earning $21,000. She should enter the $34,000 combined amount here.
Section 2: Line-By-Line Instructions
If you worked two or more jobs at the same time, enter the portion
Where Did You Work? you earned from your main job.
Did you work in an Indiana county on Jan. 1, 2022? If “yes,” complete
this section. If your answer is “no,” you will not owe any county tax.
Example. Daniel had two jobs at the same time. On Job #1 he worked
Do not complete this section on your behalf.
30 hours a week and earned $270 a week. On Job # 2 he worked
10 hours a week and earned $80 a week. Daniel should enter only
If you are filing a joint return, did your spouse work in an Indiana
the amount he earned from Job #1 ($270 per week) as his principal
county on Jan. 1, 2022? If yes, complete this section. If your answer is
employment income.
“no,” your spouse will not owe any county tax. Do not complete this
section on your spouse’s behalf.
Reciprocal state residents (see instructions on page 8 and under
Line 4 below) with Indiana-source income from wages, tips or other
Line 1 compensation may owe county tax on that income and certain
Enter your principal employment or business income that is included
business income described above even though it’s not taxed on
on Indiana Schedule A, Section 1, Column B* (if you are a resident
Schedule A, Section 1, Column B.
of a reciprocal state [Kentucky, Ohio, Pennsylvania, Michigan or
Wisconsin], see Reciprocal state residents below). This can include
Example. Fred and Deanna are full-year Michigan residents. Deanna
income from wages, tips, salaries and commissions; net self-
earned $55,000 wage income from an Elkhart, Indiana employer,
employment income from federal Schedule C/C-EZ; Schedule IN K-1,
which is the county where she worked as of Jan. 1, 2022. Fred received
and/or net farm income from federal Schedule F. This can include
$10,000 winnings from an Indiana riverboat. Fred’s gambling income
the portion of income from a trade or business, including income
is subject to Indiana state tax (he will report it on Schedule A, line 20,
listed on a IN Schedule K-1 and derived from the primary county of
Column B); however, his winnings are not subject to Indiana county
employment you are actively involved in the business. Do not include
tax (he lived and worked in Michigan on Jan. 1, 2022).
passive-source income like nonbusiness interest and dividends,
pension, capital gains, farm rental, unemployment compensation, etc.
Conversely, while Deanna’s wage income is not subject to Indiana
adjusted gross income tax, it is subject to county tax. Enter her $55,000
Do not include income from a part-time job if you held it at the same
wage income on CT-40PNR, Section 2, line 1B. See Reciprocal state
time you had a full-time job.
residents under Line 4 instructions below and the Example for more
information on how to figure her county tax.
Example. During 2022, Jake received income from the following Indiana
sources (included on Indiana Schedule A, Section 1, Column B):
Line 2
• $15,000 from his full-time job (held for the entire year)
You may use certain deductions to lower the amount of income to be
• $1,850 from his part-time job
taxed. These deductions must have been claimed on Indiana Schedule
• $50 nonbusiness interest income
A, Section 2, Column B, or Indiana Schedule C and must have a direct
• $800 pension income
relationship to the income being taxed on line 1.
Jake will enter his $15,000 principal employment income on line 1.
The allowable deduction from your Indiana Schedule C can include
the enterprise zone employee deduction if the deduction is directly
*Exception. A spouse of a nonresident military servicemember who
related to the income reported on line 1.
claims the nonresident military spouse earned income deduction on
Schedule C, line 11, will not owe county tax on that income.
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County Tax Continued While his wage income is not subject to Indiana income tax, it is
subject to county tax. He will complete Schedule CT-40PNR, Section
The allowable deductions reported on Indiana Schedule A, Section 2, 2, Column A, entering his $65,000 wage income on lines 1 and 3. He is
can include the educator expense deduction, certain business expenses not eligible to claim any exemptions on line 4.
of reservists, performing artists and fee-based government officials,
health savings account deduction, deductible part of self-employment Line 6
tax, SEP, SIMPLE and qualified plans, self-employed health insurance Find your county on the County Income Tax Chart the back of
deduction, and/or IRA deduction, if the deduction is directly related Schedule CT-40PNR. Find the rate from the County Tax Rate column
to the income reported on line 1. If you have a deduction that is not and enter it here.
directly related to the income being taxed on Line 1, do not claim
these deductions. Note. If you have figured a tax in Section 1 and Section 2, add
amounts from Section 1, line 9 and Section 2, line 8, and enter on
Example. Ann is an Illinois resident teaching in Indiana. Her Indiana Form IT-40PNR, line 9.
wages were $51,000, which she reported on Schedule A, lines 1A
and 1B. She claimed a $250 educator expense deduction on Indiana
Schedule A, Section 2, lines 22A and 22B. She will claim the $250
educator expense deduction on line 2.
Example. Tim and Jane file a joint tax return and are full-year Illinois
residents. Jane does not owe county tax, but Tim does because his
business is located in an Indiana county. Jane has a $21,000 wage
income and a $2,000 IRA deduction. Tim has $23,000 net income
from his Indiana photography shop and claimed a $700 self-employed
SEP deduction. He will enter his $23,000 income on line 1 of Section 2
and the $700 SEP deduction on line 2 of Section 2. He is not eligible to
take the IRA deduction because the wage income that it is in relation
to is not being taxed for county tax purposes (it is associated with
Jane’s income).
Line 4
If you are married filing jointly, enter a portion of the your exemption(s)
(personal, over 65 and/or blind) included on Schedule D, line 9. All
other filers should enter the total exemptions from Schedule D, line 9.
You cannot claim your spouse’s personal exemption. Exemptions for
dependents, and age 65 or older or blind can be claimed by either
spouse, as long as the total of line 4, Columns A and B is not greater
than the total reported on Schedule D, line 9.
Example. On Schedule D Jack and Sue claim $2,000 on line 1,
one dependent exemption ($1,000) on line 2, and one additional
dependent exemption ($1,500) on line 3. The line 7 amount is $4,500.
The line 8 amount is .40. Jack can use $1,400 (the $3,500 exemption
amount x .40 = $1,400) to figure his county tax.
Reciprocal state residents (see instructions on page 8) with
Indiana-source income from wages, tips or other compensation
(reciprocal income) may not use any exemptions to reduce their
reciprocal income for county tax calculation purposes.
Example. Alex lived in Michigan and worked in Indiana on Jan.1 of
the year, earning $65,000 wages (reciprocal income) from his Elkhart
County job.
He also had $5,000 income from his St. Joseph County, Indiana
business (rental income, which is not reciprocal income).
IT-40PNR Booklet 2022 Page 55
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NOTES:
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NOTES:
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Human Services Deduction ............................................................. 24
Index to Instructions
Indiana Lottery Winnings Annuity Deduction ............................. 25
Indiana Net Operating Loss Deduction ......................................... 22
2022 Changes ............................................................................................ 3 Indiana-only Tax-exempt Bonds Deduction ................................. 25
Indiana Partnership Long-Term Care Policy
A Premiums Deduction .............................................................. 25
Add-Backs Infrastructure Fund Gift Deduction ............................................... 25
Bonus Depreciation Add-Back ........................................................ 17 Interest on U.S. Government Obligations Deduction .................. 20
Conformity Add-Back Nonresident Military Spouse Earned Income Deduction ........... 26
Conformity Add-Back – Negative Entry..................................... 18 Nontaxable Portion of Unemployment Compensation ............... 22
Conformity Add-Back – Positive Entry ...................................... 18 Olympic/Paralympic Medal Winners Deduction ......................... 27
Discontinued Add-Backs: How and When to Report a Private School/Homeschool Deduction ......................................... 22
Final Catch-Up Modification ................................................. 19 Qualified Patents Income Exemption Deduction ......................... 27
Employer Student Loan Payment Add-Back ................................. 18 Railroad Unemployment and Sickness Benefits Deduction ........ 27
Excess Federal Interest Deduction Modification .......................... 19 Recovery of Deductions ................................................................... 27
Federal Repatriated Dividend Deduction Add-Back ................... 19 Repayment of Previously Taxed Income Deduction .................... 27
Meal Deduction Add-Back .............................................................. 18 State Tax Refund Reported on Federal Return .............................. 20
OOS Municipal Obligation Interest Add-Back ............................. 17 Taxable Social Security and/or Railroad Retirement
Qualified Preferred Stock ................................................................. 19 Benefits Deduction................................................................... 21
Section 179 Expense Add-Back ....................................................... 18 Dependents, Definitions and Special Rules for .......................... 31–33
Student Loan Discharge Add-Back ................................................. 18
Treatment of Previously Discontinued Add-Back ........................ 17 E
Adoption Credit .................................................................................... 38 Exemptions
Adoption Credit Carryforward Worksheets ............................... 39–40 Additional Exemption for Age 65 or Older ................................... 29
Amended (Corrected) Tax Return ....................................................... 4 Age 65 or Older or Blind .................................................................. 29
Amount Due ......................................................................................... 11 Dependent Exemptions, Additional ............................................... 30
Annual Public Hearing .......................................................................... 4 Extension
Extension Filing Deadline .................................................................. 8
C Extension of Time to File ................................................................... 7
Combined Limitation .................................................................... 43, 50 Extension of Time to File Information ........................................... 50
County Tax Instructions ................................................................ 51–55 Form IT-9 ............................................................................................. 8
County Where You Lived Defined ..................................................... 51 Penalty and/or Interest ....................................................................... 8
County Where You Worked Defined ................................................. 52 Where to Report Your Extension Payment ...................................... 8
Credits
Economic Development for a Growing Economy F
Credit (EDGE) .......................................................................... 37 Farmers and Fishermen ....................................................................... 50
Economic Development for a Growing Economy File Your Return
Retention Credit (EDGE-R) ................................................... 37 Electronic Filing Program .................................................................. 4
Estimated Tax Paid ............................................................................ 35 INfreefile ............................................................................................... 4
Headquarters Relocation Credit ...................................................... 37 Foreign Country Code ........................................................................... 5
Indiana’s Earned Income Credit (EIC) ........................................... 36 Form IT-40PNR, Completing ......................................................... 8–12
Indiana State and County Tax Withheld ........................................ 35
Lake County (Indiana) Residential Income Tax Credit ............... 36 H
Unified Tax Credit for the Elderly ................................................... 35
Help With Your Return
D Information Line ................................................................................. 4
Internet Address .................................................................................. 4
Deceased Taxpayer Local Help ............................................................................................ 4
Date of Death ..................................................................................... 51 Telephone ............................................................................................. 4
Refund Check for a Deceased Individual ......................................... 7 Homeowner’s Residential Property Tax Deduction ......................... 20
Signing the Deceased Individual’s Tax Return ................................ 7
Deductions I
Civil Service Annuity Deduction .................................................... 23
Important Information About Possible Year-End
COVID-related Employee Retention Credit Disallowed
Federal Legislation ................................................................... 17
Expenses Deduction ................................................................ 24
Indiana Nongame Wildlife Fund ........................................................ 41
Disability Retirement Deduction .................................................... 24
Individual Taxpayer Identification Number (ITIN) .......................... 5
Enterprise Zone Employee Deduction ........................................... 24
Information Bulletins, Obtaining ......................................................... 3
Government or Civic Group Capital Contribution
Interest ................................................................................................... 11
Deduction.................................................................................. 24
IT-40PNR Booklet 2022 Page 59
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L Retired Persons, Homemakers or Unemployed ............................... 52
Returned Checks and Payments ......................................................... 12
Losses ...................................................................................................... 5 Rounding Required ................................................................................ 5
M S
Married Filing Requirements Sales/Use Tax Worksheet ..................................................................... 33
Married Filing Jointly ......................................................................... 5 Schedule A
Married Filing Separately ................................................................... 5 Proration ............................................................................................. 15
Married Persons Who Live Apart Filing Status ............................... 5 Section 1: Income or Loss .......................................................... 13–15
Military Family Relief Fund ................................................................ 41 Section 2: Adjustments to Income ............................................ 15–17
Military Personnel Schedule B: Add-Backs .................................................................. 17–20
Military Address .................................................................................. 5 Schedule C: Deductions ................................................................. 20–28
Military Personnel, County .............................................................. 52 Schedule D: Exemptions ................................................................ 28–30
Military Retirement Income and/or Survivor’s Schedule E: Other Taxes ................................................................ 33–34
Benefits Deduction............................................................. 21, 25 Schedule F: Credits ......................................................................... 35–41
Military Service Deduction .............................................................. 21 Schedule G: Offset Credits ............................................................ 42–50
National Guard and Reserve Component Members Schedule H
Deduction............................................................................ 21, 26 Section 1: Residency Information ................................................... 50
Nonresident Military Spouse Earned Income Deduction ........... 21 Section 2: Additional Required Information ........................... 50–51
Residency .............................................................................................. 7 Schedule IN-DEP ........................................................................... 30–31
Move During the Year .......................................................................... 51 Schedule IN-DEP-A ............................................................................. 31
Moving? ................................................................................................... 4 Schedule IN-DONATE ........................................................................ 41
Schedule IN-PRO ................................................................................. 34
N Schedule IN-W: Indiana Withholding Statements .......................... 41
Negative Entries ...................................................................................... 5 Schedules, Enclosing .............................................................................. 6
Non- or Partially- Responsible Spouse .............................................. 51 Social Security Number ................................................................... 5, 32
Nonresidency and Income Taxable to Indiana ................................... 8
T
O Tax Forms, Obtaining ............................................................................ 3
Offset Credits Taxpayer Advocate ............................................................................... 12
College Credit .................................................................................... 43 Taxpayer Refund, Additional Automatic .......................................... 38
Community Revitalization Enhancement District Credit ........... 42
Credit for Local Taxes Paid Outside of Indiana ............................ 42 U
Credit for Taxes Paid to Other States .............................................. 43 Unemployment Compensation Worksheet ...................................... 23
Other Credits ............................................................................... 44–50
Other Local Credits ........................................................................... 42 W
Opt-Out Designation ........................................................................... 51
Order of Application ............................................................................ 43 W-2s, Enclosing ...................................................................................... 6
Wagering Taxes ..................................................................................... 17
P Website ..................................................................................................... 4
What if You Can’t File on Time? ........................................................... 7
Paid Preparer Information .................................................................. 51 When Should You File?.......................................................................... 7
Payment Options .................................................................................. 11 Where to Mail Your Tax Return ......................................................... 12
Penalty .................................................................................................... 11 Which Indiana Tax Form Should You File? ........................................ 3
Personal Representative Information ................................................ 51 Who Should File? ................................................................................... 6
Principal Employment Income ........................................................... 52
Proration Amount ................................................................................ 29 Z
Public K – 12 Education Fund ............................................................ 41
ZIP/Postal Code ..................................................................................... 5
R
Refund
Direct Deposit .................................................................................... 11
Refund Offsets ................................................................................... 10
Statute of Limitations for Refund Claims ....................................... 11
When to Expect Your Refund .......................................................... 10
Where’s Your Refund? ....................................................................... 10
Renter’s Deduction ............................................................................... 20
Restriction for Certain Tax Credits .............................................. 42, 50
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