Full-Year Resident Individual Income Tax Booklet

1 2016 INDIANAI ndex begins on page 53IT-40 Full-Year Resident Individual Income Tax Booklet FAST FRIENDLY FREEWAIT! YOU MAY QUALIFY FOR FREE ONLINE TAX FILING! More than 85 percent of Indiana taxpayers filed electronically in 2016 . 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 pen-alty 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 .

2 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 to see if you qualify or learn more about INfreefile on page 265(R13 / 9-16)About the cover: This year , Indiana s tax booklets showcase the Indiana Bicentennial Torch Relay, which inspired and unified Hoosiers as one of the major commemorative events of the 2016 Bicentennial celebration. The torch, passed from one torch bearer to another, passed through all of Indiana s 92 counties and covered 3,200 miles over a five week period between September 9, 2016 and October 15, 2016 . Featured photos highlight relay stops in Gibson, Marion, Perry and Sullivan counties.

3 Photos courtesy of Sadie 3IT-40 Booklet 2016 Which Indiana Tax Form Should You File?Indiana has three different Individual Income tax returns. Read the following to find the right one for you to IT-40 for Full-Year ResidentsUse Form IT-40 if you (and your spouse, if filing jointly) were Full-Year Indiana IT-40 PNR for Part- year and Full-Year NonresidentsUse Form IT-40 PNR if you (and/or your spouse, if filing jointly): Were Indiana residents for less than a Full-Year or not at all, or Are filing jointly and one was a Full-Year Indiana Resident and the other was not a Full-Year Indiana Resident , and Do not qualify to file Form IT-40 RNR for Full-Year Residents of Reciprocal StatesUse Form IT-40 RNR if you (and your spouse, if filing jointly) were.

4 Full-Year residents of Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin, and The only type of Income from Indiana was from wage, tip, salary or other compensation.* *You are required to file Form IT-40 PNR if you have any other kind of Indiana-source If you have Income that is being taxed by both Indiana and an-other state, you may have to file a tax return with the other PersonnelSee the instructions on page 8 to determine which form to file. Mili-tary personnel stationed in a combat zone should see the instructions on page 7 for extension of time to file ChangesUpdate: Line 1 of Form IT-40 assumes conformity with the Internal Revenue Code for federal changes adopted after Jan. 1, 2016 . If the 2017 Indiana General Assembly does not conform to the most current changes to the Internal Revenue Code, you may have to amend your tax return at a later date to reflect any differences between Indiana and federal law.

5 You may wish to periodically check the department s homepage at for Service Annuity Deduction IncreaseThe ceiling for the Civil Service Annuity Deduction has increased to $16,000. See page 18 for more Family Relief Fund DonationYou may donate all or a portion of your refund to help provide emer-gency grants to be used by military and veteran s families. See the instructions for Schedule IN-DONATE on page 37 for more Add-Backs EliminatedThe following add-backs have been eliminated: Lump Sum Distribution Discharge of Debt of a Principal Residence Qualified Disaster Assistance Property** Qualified Refinery Property** Qualified Film or Television Production** Qualified Preferred Stock* Certain Trade of Business Deductions Based on Employment of Unauthorized Aliens*See page 14 for information about this add-back.

6 **See instructions beginning on page 14 for information on how the elimination of these add-backs might impact your future state tax Deductions No Longer AvailableThe following deductions are no longer available. Indiana Lottery Winnings Deduction* Insulation Deduction Law Enforcement Reward Deduction Medical Care Savings Account Deduction (Indiana) Non-Indiana Locality Earnings Deduction Solar-Powered Roof Vents or Fans Deduction*The Indiana Lottery Winnings Annuity Deduction is still available, although it has a new 3-digit identification code number (629). See instructions on page 19 for additional Offset Credits No Longer AvailableThe following credits have been repealed. County Credit for the Elderly Employer Health Benefit Plan Credit Historic Building Rehabilitation Credit* Maternity Home Credit Small Employer Qualified Wellness Program Credit*Note.

7 A credit may still be available to be carried forward provided there was an unused amount available prior to it being repealed. See instructions about this credit on page 43 for more County Residential Income Tax Credit UpdateThe Lake County Residential Income Tax Credit worksheet has changed. See page 36 for more Booklet 2016 Page 4 School Corporation InformationThe school corporation information previously reported on the state Income tax return is no longer IT-40 EZIndiana s Form IT-40EZ is no longer available. Instead, Full-Year Indi-ana residents must file using Form IT-40. Need Tax Forms or Information Bulletins?Use Your Personal ComputerVisit our website and download the forms you need. Our address is Use Your TelephoneCall the forms order request line (317) 615-2581 to have forms mailed to you.

8 Have the following information ready to leave on the voice mail system: Name of form or form number needed Number of copies needed Contact person s name Daytime phone number A complete mailing address (including city, state and zip code)Visit a District Office or LibraryTax forms are available at district offices located throughout the state. These offices are open Monday - Friday, 8 to 4:30 Visit for a list of these offices, including ad-dresses and telephone numbers. Also, contact your library to find out if they stock any state tax forms. Need Help With Your Return?Local HelpYou may be eligible to take advantage of the IRS Volunteer Return Preparation Program (VRPP). This program offers free tax return help to low Income , elderly and special needs individuals .

9 Volunteers will fill out federal and state forms for those who qualify. Call the IRS at 1-800-829-1040 to find the nearest VRPP location. Be sure to take your W-2s, 1099s and a copy of last year s state and federal tax returns. Automated Information LineCall the automated information line at (317) 233-4018 to get the status of your refund, billing and payment plan information, a copy of your tax return, or prerecorded tax topics. If you wish to check for billing information, be sure to have a copy of your tax notice. The system will ask you to enter the tax identification number shown on the notice. If you have a rotary phone, please call (317) 232-2240, 8 to 4:30 , Monday - Friday, and a representative will help AddressIf you need help deciding which form to file, or need to get informa-tion bulletins or policy directives on specific topics, visit our website at us at (317) 232-2240 Monday - Friday, 8 to 4:30 , for help with basic tax To File Your Return?

10 Use an Electronic Filing ProgramMore than 85 percent of Hoosier taxpayers used an electronic filing program to file their 2015 state and federal Individual Income tax returns. Electronic filing provides Indiana taxpayers the opportunity to file their federal and state tax returns immediately, and receive their Indiana refunds in about half the time it takes to process a paper return. It takes even less time if you use direct deposit, which depos-its your refund directly into your bank account. Even if there is an amount due on either return, Indiana taxpayers can still file electroni-cally and feel comfortable knowing that the returns were received by the IRS and the Indiana Department of Revenue (department). Use an electronic vendor or contact your tax preparer to see if he or she provides this service.