• DOR
• Individual Income Taxes
• Current: Individual Income Tax FAQs

• Joint Tax Return Gambling Losses Calculator
• Joint Tax Return Form

• Form 1099G:

There is one golden rule to keep in mind when deducting gambling losses on your tax return. You can’t, unfortunately, deduct losses that total more than your winnings. So, if you made $10,000 on gambling last year but lost $12,000, you can only deduct $10,000 in losses (nothing more). In Kalisch, 8 the taxpayer reported $41,979 in gambling income and claimed offsetting gambling losses in the same amount on his 1981 return. In its notice of deficiency, the IRS accepted the taxpayer’s income figure, but disallowed the deduction for gambling losses, because the taxpayer failed to substantiate them and because he had additional unreported winnings that exceeded his losses for the year. Aug 02, 2009  Answers. In the case of a husband and wife making a joint return for the taxable year, the combined losses of the spouses from wagering transactions shall be allowed to the extent of the combined gains of the spouses from wagering transactions.

General Income Tax Questions

• When is my tax return due?

  April 15th following the end of the tax year.

  If April 15 falls on a weekend or holiday, the due date for filing your tax return is the next business day. (ie: April 17, 2018 for 2017 taxes)

  Fiscal-year tax returns are due by the 15th day of the fourth month after the close of the fiscal year. (ie: Fiscal year end date July 1, returns are due November 15). You must complete the Fiscal Year date at the top of the income tax form you're filing.

• Who must file a tax return?

  You must file an Indiana individual income tax return if:

  • You lived in Indiana and had an income higher than your exemptions, or
  • You lived outside Indiana and received income from Indiana.
• Which tax return should I file?

  Indiana has several different individual income tax returns.

  • Use Form IT-40 for full-year nonresidents
    Use Form IT-40 if you (and your spouse, if filing jointly) were full-year Indiana residents.
  • Use Form IT-40PNR for part-year and full-year nonresidents​
    Use Form IT-40PNR if you (and 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-40RNR.
  • Use Form IT-40RNR for full-year residents of reciprocal states
    Use Form IT-40RNR if you (and your spouse, if filing jointly) were:
    • 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-40PNR if you have any other kind of Indiana-source income.

• How do I read a refund check?

  You can learn to read a refund check by checking out our diagram.

• I need more time to file my taxes. What should I do?

  You should file for a federal and/or state extension of time to file.

  Please note, this form only allows you to file your tax return after the original due date, April 15. Any payment made when you file your tax return is subject to interest, and penalty may be due, too.

• When do I file an amended (corrected) return?

  When there are changes to your income, exemptions or credits. This may result in a refund or tax due.

  • If you did not file an original return but you filed an amended federal return (1040X) then you will need to file the new figures as an original return on IT-40, or IT-40 PNR.
  • If you have already filed an original return, file an amended return using Form IT-40X.
• I have a gambling loss that I took on my federal return. Can I claim this on my state return?

  No. Indiana does not have a deduction for gambling losses.

• Does the DOR have a payment plan option?

  If the amount of tax due is more than $100, the DOR can establish a payment plan. The request can be made once your return is processed and you received a bill for the tax due.

  The DOR now offers INtax Pay. This online program allows eligible Hoosiers to pay and set up payments.

  This tool is available to customers who owes individual income taxes, and businesses who conduct retail sales.

  For more information, please contact us at (317) 232-2165.

• Does Indiana have an inheritance tax?

  Indiana's inheritance tax was repealed for individuals dying after Dec. 31, 2012.

• What are the filing requirements for deceased individuals?

  There are several requirements to meet if an individual died during the tax year, or died after December 31st of the tax year, but before filing his or his tax return.

  The executor, administrator, or the surviving spouse must file an Indiana income tax return for the individual if:

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

  The DOR may ask for a copy of the death certificate, so please keep a copy with your records. Make sure to enter the month and day of death for the taxpayer or spouse in the appropriate box located on the back of the appropriate form or schedule. For more information, please visit this page.

• Why have I not received my worker's compensation exemption certificate?

  To receive the worker's compensation exemption certificate you must meet several requirements.

• Why is there a tax lien on my vehicle title?

  You are most likely in a state collection for taxes.

• How long should I wait on my refund before contacting the DOR?

  Please allow a minimum of 3 weeks for electronically filed returns, and 12 weeks for paper filed returns.

Deductions

• Can a college student claim the renter’s deduction?

  College students may claim the renter’s deduction only if the residence is:

  • Their principal place of residence; (the place where you have your true, fixed, permanent home and where you intend to return after being absent.)
  • The residence is subject to Indiana property tax.

  Information Bulletin 38 contains more information.

• Can parents of a college student claim the renter’s deduction on their tax return?

  No, this deduction is only available to the person who is living in the rented residence.

• Can I take the renter’s deduction and also the homeowner’s property tax deduction?

  These deductions are based on paying rent or property tax on your principal residence. If you paid Indiana property tax on your home and also paid rent on your home (maybe you sold your house in May and rented the remainder of the year), you can take both deductions. The property tax deduction is up to $2,500 and the rental deduction is up to $3,000.

Billings

• How do I get information about my tax bill?

  You can inquire about a tax bill by using the DOR's automated information line. You can find out your current balance due on any individual or business tax liability by calling (317) 233-4018.

  You will need to have:

  • Your tax identification number or Social Security number
  • The liability number or warrant number

  This information is located on the bill you received.

• What are my rights as an Indiana taxpayer?

  All Indiana taxpayers have certain rights and responsibilities that correspond to the Indiana tax laws.

  • Quality Customer service
  • Taxpayer advocate to help customers in the preservation of their rights
  • Taxpayer education and information
  • A fair collection process
  • Appointed hearing time and representation
  • Demand notices
  • Warrants for collection of tax
  • Judgment liens against property
  • Annual Public Hearing and Department Report
• What are my responsibilities as an Indiana taxpayer?

  Your responsibilities are:

  • To file your tax returns and pay any taxes due on time.
  • To notify us in writing when you have an address change.
  • To know the tax laws that relate to you as an individual or a business, and comply with those laws.
  • To contact us if you have any questions or concerns.
• What is the DOR’s delinquent tax collection process?

  Every customer has the right to a fair collection process.

  You have the right to protest a liability. If you protest a liability, the DOR is required to conduct a hearing on that case. You are entitled to be represented at your hearing when your case is presented. If a liability is not paid or protested within 60 days of the first notice, we will issue a 'Demand Notice' for payment before issuing a tax warrant. If we do not receive a payment, a warrant for the collection of tax will be issued. When a tax warrant is filed with your county clerk, it becomes a judgment lien (levy) against all your property within the county. The DOR intends for you to have every opportunity to rectify your account balance whether it is paying it right away or protesting it.

  Know your rights and responsibilities as an Indiana taxpayer.

Power of Attorney

• What is a Power of Attorney (POA-1) form?

  Customers wanting to authorize a representative to have Power of Attorney on their behalf for state tax matters needs to fill out a POA-1 form. Only when the DOR has received the properly completed POA-1 form can a DOR employee speak with the representative about specific tax types and periods indicated on the form.

• Where do I mail the completed POA-1 form?

  Customers or their POA representatives can mail the POA-1 form to the following address:
  Indiana Department of Revenue
  P.O. Box 7230
  Indianapolis, IN 46207-7230

• Can I fax the Department a copy of the POA-1 form?

  Customers or their POA representatives can fax the POA-1 form to the following number: (317) 615-2605.

• Can my certified public accountant (CPA) submit the POA-1 form for me?

  Yes, CPAs can submit the POA-1 form for their clients as long as the document is signed by the customer.

• Do I need to have the POA-1 form notarized if a family member is my POA?

  Regardless of whom customers designate as their POAs, the POA-1 form does not need to be notarized.

• Can the DOR speak to my family members without a POA-1 form on file?

  No, a POA-1 form must be on file. The DOR will speak to a family member only if he or she has been declared a POA representative on the customer’s POA-1 form. However, if a married couple filed a joint return, the DOR can speak to either spouse without a POA-1 form.

• My family member is on active duty in the military. How can he or she complete the form?

  The military family member can print the POA-1 form from the Department’s website. Then he or she can complete the POA-1 form, sign it, and submit it. He or she can submit it via mail or fax.

• Can anyone be my POA, or does it have to be an attorney or a CPA?

  Customers can designate anyone, including family members, CPAs or attorneys, to be their POA representative.

• If I submit my POA-1 form to my local district office, will my POA representative be able to speak with an employee at any Indiana Department of Revenue office?

  Yes, the POA representative may speak with any DOR team member after the POA-1 form has been processed in the DORs system. However, depending on how the form was received, there may be a delay before the POA-1 is visible statewide.

• I’ve entered my representative’s company name on the POA-1 form. Can the DOR talk with anyone who works at that firm?

  A company cannot be represented on the POA-1 form. By law, the DOR can accept only an individual’s name as a POA representative. The DOR will not accept a POA-1 form that does not have a designated POA representative from a company.

• Can I give blanket permission for my POA representative to receive information for all my tax types and years?

  Yes, please check the box on page 2 to indicate that you want to grant authority for all periods and tax types.

• How much will it cost me to file the POA-1 form?

  There is no cost to the taxpayer or POA representative to file a POA-1 form.

• Do I need to complete a POA-1 if I am listed as the personal representative on the individual tax return?

  If you are listed as an authorized personal representative on the tax return, a POA-1 is not required to discuss that specific return with you. However, if you have additional questions outside of the tax return itself, other tax years, or other submitted forms, the POA-1 will be required.

Form IT-40 PNR

• I am an Indiana resident in the military. My spouse is not an Indiana resident. We filed a joint federal return. How do we file with Indiana?

  You will need to file using Form IT-40PNR. Indiana will tax all of your income, plus any income your spouse may have received from Indiana sources.

• I worked in Indiana for six months. Then I worked six months in another state. How should I file my Indiana taxes?

  Since this question has a variety of different scenarios, it would be best to refer to page 6 of the Form IT-40PNR tax booklet. Then you would need to see what the guidelines are for the other state(s).

• Do I have to figure county tax?

  If you lived or worked in Indiana on Jan. 1, you will need to figure county tax.

Use Tax Liability

• Who owes Indiana Use Tax?

  Generally, any type of business entity (individual, partnership, corporation, etc) that makes purchases of tangible personal property are subject to use tax unless you previously paid at least a seven percent sales tax on the purchase to the vendor. Use tax can be thought of as a mirror of the sales tax. Both our sales tax and use tax rates are seven percent.

  Use tax is due on property brought into Indiana for use, storage or consumption, unless the Indiana Code (IC 6-2.5-5) contains an applicable exemption for your purchase. If you paid at least seven percent sales tax at the time of purchase you do not owe a use tax. However, if you did not pay at least a seven percent sales tax you may owe use tax.

• What type of purchases might cause me to become liable for Use Tax?
  • Catalog purchases by phone or mail from out-of-state vendors
  • Internet purchases from out-of-state vendors
  • Items withdrawn from your inventory for personal use or to give away
  • Any purchase for which a statutory exemption is not available per the Indiana Code (IC 6-2.5-5)
• What are some common examples of purchases I may make that become subject to the Indiana Use Tax?
  • A dentist operates his/her business as a sole proprietorship. The dentist buys toothbrushes from an out-of-state supply house to give away to their patients during their annual exam. The vendor did not collect any sales tax on this sale. The dentist owes seven percent use tax on these purchases as there is not an existing statutory exemption for this type item given away. The dentist should report the use tax on form ST-115.
  • An auto repair shop purchases shop rags and other cleaning materials from an-out-of-state vendor. The vendor did not collect sales tax on the invoice. The auto repair shop should report these purchases on their next sales tax return, form ST-103, as being subject to use tax and remit the seven percent use tax due.
  • A manufacturer purchases new office furniture for their corporate office use from an out-of-state distributor. The distributor collects their state's six percent sales tax on the selling price. The manufacturer owes an additional 1 percent Indiana use tax on this purchase since the property is being used, stored or consumed within Indiana. The manufacturer should report this use tax liability on their ST-103 sales tax return.
  • A law firm maintains an extensive legal library. Many of their legal books, manuals and publications are from out-of-state publishers who do not collect sales tax on items shipped into Indiana. The law firm owes seven percent Indiana use tax on these type of purchases and can remit these on their ST-103 return, if they are a registered retail merchant, or they can use the form ST-115.
  • An individual orders magazines, clothing and novelty items from various out-of-state catalog companies. Sometimes the individual orders the items via mail, sometimes via the telephone and sometimes online over the Internet. This individual should report these purchases to Indiana as being subject to our use tax of seven percent. The individual can report these purchases on their Individual Income Tax Returns (IT-40) or they may use a Form ST-115.
• What about items I purchase at garage sales and auctions?

  Items sold at garage sales are generally exempted under Indiana's casual sale statute. A casual sale exemption is applicable when the seller is not in the 'business' of selling merchandise and the seller has already paid an original sales or use tax on the item. (Information Bulletin 20)

  Items purchased at auctions are slightly more complex. Naturally, if the auctioneer collects the seven percent sales tax you will not owe any additional use tax. Also, if the auction takes place on the premises of the owner of the tangible personal property the items are considered to be 'casual sales,' and therefore, exempt from sales and/or use tax. However, if the merchandise to be sold is moved to a location not owned by the owner of the merchandise, the sales become subject to sales and/or use tax. All sales at auction 'houses' are subject to the sales or use tax. (Information Bulletin 20)

• What if I've paid sales tax to another state?

  The Indiana use tax rate is seven percent, same as our sales tax rate.

  Depending on the tax rate of another state you may or may not owe use tax:

  • If paid sales tax of seven percent or more to the other state you do not owe use tax to Indiana
  • If paid sales tax of less than seven percent to the other state, your Indiana use tax will be the difference between the Indiana seven percent use tax and the amount you paid to the other state.

Form 1099G - Issued by the Indiana Department of Revenue

• What is this statement?

  The Form 1099G is a report of income you received from the DOR during 2018. The Internal Revenue Service (IRS) requires government agencies to report certain payments made during the year, because these payments are considered taxable income for the recipients. The DOR must report any refund, credit or offset of state and/or county income tax made during 2018 to individuals who claimed itemized deductions on their federal income tax returns for the year in Box 3. We must also include any interest paid on those refunds, credits or offsets.

• What should I do with this statement? Do I need to report the amount shown?

  The Form 1099G is a report of income you received from the DOR during 2018. It is not a bill, and you should not send any type of payment in response to the statement. If a professional preparer handles your taxes, you should give this statement to the preparer, along with your other tax information, such as W-2s. If you prepare your own taxes, you should review the federal return instructions for reporting state tax refunds, or visit the IRS website for more information.

• Why did I receive this statement?

  The DOR's records show that we issued you a refund or overpayment credit during 2018 for the taxable year shown in Box 3. You may be required to report the refund or credit as income on your 2018 federal income tax return.

• Do I have to report my refund as income?

  You may have to report a state refund received in 2018 as income if you claimed itemized deductions on your 2017; federal income tax return.

  In computing itemized deductions on your federal income tax return, you are allowed to deduct all of the state and county income taxes paid during the year. Most people deduct the amount of state and county income tax withheld, as shown on Form W-2, plus any Indiana estimated tax payments made during the year. Since this deduction reduces federal taxable income, if any part of the state and/or county tax deducted on the federal return is later refunded (as a result of filing your Indiana state income tax return), then that amount has to be reported as taxable income for the year in which the refund is issued.

  Example: Sally Smith's 2017 W-2 showed $1,000 Indiana state withholding and $200 Indiana county withholding. She deducted the total $1,200 state and county withholding as an itemized deduction on her 2017 federal tax return. When she filed her 2017 Indiana state tax return, she got a $300 refund, which was issued June 1, 2017. This means that she only paid $900 in state and county taxes altogether for 2017, rather than the $1,200 she claimed. Therefore, Sally will be required to report the $300 difference on her 2018 federal tax return. (Note: Sally will also claim the $300 as a deduction on her Indiana tax return on Schedule 2, line 3. See the IT-40 instruction booklet for more information.)

• This statement shows a refund amount that includes interest. What am I supposed to report as income?

  You may need to report both amounts as income. If so, the interest would be included with the other interest income you report on your federal return. For information on federal reporting requirements, visit the IRS website.

• I have checked my records and I'm sure this statement is incorrect. What should I do?

  Please contact us at (317) 232-2118, or write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207, to request a letter of correction. Be sure to include your Social Security number, and explain why you believe the Form 1099G is incorrect.

• I itemized my deductions last year, but haven't yet received a Form 1099G. Is it too late to get one?

  We usually mail out the Form 1099G statements around Jan. 1. If it's after the end of January and you still haven't gotten your statement, contact us at (317) 232-2118, or write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207, to request this information. Be sure to include your Social Security number with your request.

• The Social Security number on my Form 1099G is wrong. Would you send a corrected statement to me?

  Yes. Please contact us at (317) 232-2118, or write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207. Give us both the incorrect Social Security number from the statement and your correct number. We'll issue a corrected statement to you.

• I claimed a refund from Indiana for 2016, but the Indiana Department of Revenue applied the money to a tax bill I owed for another year. Does this mean the statement is wrong? Do I still have to report this as income?

  Indiana law requires refunds to be applied to outstanding billings or to other agency offsets. The application of funds doesn't change the fact that you claimed an overpayment for the year on your tax return. Even though you didn't actually receive a check, an overpayment transaction took place, and you are subject to the same federal reporting requirements as if you had received a refund check.

• I did show an overpayment on my 2016 state tax return, but I had the money applied as a credit (estimated tax payment) to my 2017 account. Since I didn't get a refund, do I still have to report this?

  A refund and a credit are simply different types of overpayment transactions. We must include any overpayment allowed on your 2017 tax return, whether issued as a refund or as a credit, on our Form 1099G. As a result, you are subject to the same federal reporting requirements as if you had received a refund check.

• This statement says the refund was issued for 2016, but I already reported that refund on my 2017 federal tax return. Can you correct the statement? If not, what should I do?

  We are required to report refund transactions in the year they actually occur. Since your 2015 refund was issued in 2018, we cannot issue a Form 1099G as if the transaction took place in 2016. You should contact the Internal Revenue Service, or visit their website, to find out whether you should amend your 2017 federal return, or take some other action to correct the reporting error.

• This statement shows a refund of $800 for 2017. I did get a refund for that amount, but I amended my state return a few months later, and had to pay $500 back. Shouldn't the statement say my net refund was $300?

  Under federal law, the DOR is required to report the actual refund or credit amount. We cannot net the amount against other transactions. Therefore, your Form 1099G is correct as issued. For information on how to report the income and deduct your payment on your 2018 federal return, visit the IRS website.

• This statement says the refund was issued for 2015. Why should I have to report that now? Why was a 2015 refund issued in 2018?

  Our records apparently show that a refund for 2015 was issued on your account during 2018, and that you claimed itemized deductions for 2015. Since the transaction took place in 2018, the income would be reported on your 2018 federal return. If you don't have a record of filing an amended Indiana tax return for 2015, or of resolving a claim or dispute related to your 2015 return during 2018, you may contact us for an explanation at: Indianapolis main office, (317) 232-2240; write to us at P.O. Box 7207, Indianapolis, IN, 46206-7207; or call or visit one of our District Offices located throughout the state.

Form 1099G - Issued by the Department of Workforce Development

The Form 1099G issued by the Department of Workforce Development is a report of unemployment compensation issued to you.

Joint Tax Return Gambling Losses Calculator

For information about this statement, contact the Department of Workforce Development at:

Joint Tax Return Form

Indiana Department of Workforce Development
Benefit Administration Section
10 N Senate Avenue
Indianapolis, IN 46204-2277

Contact them via their website, or call them toll free at 800-891-6499.

Military

• Which Indiana income tax form do I file?

  You have special filing considerations if Indiana is your military home of record. Read the following to see which set of circumstances fits you.

  • If you are single, file Form IT-40.
  • If you are married and:

  1. Filed a separate federal income tax return, file a separate Indiana return on Form IT-40;
  2. Filed a joint federal income tax return, and your spouse is also a full-year Indiana resident, file Form IT-40; or
  3. Filed a joint federal income tax return, and your spouse is either a part-year Indiana resident or a full-year Indiana nonresident, file Form IT-40PNR This form will help you to separate the income to be taxed by Indiana.
• How do I report my spouse's income?

  If your spouse maintains his/her Indiana residency during your enlistment, all of his/her income will be taxed by Indiana, regardless of where you are stationed.

  If your spouse is a part-year or full-year Indiana nonresident, income received during his/her Indiana residency, as well as income from Indiana sources, will be taxed by Indiana.

  More examples can be found on our Information for Military Service members page.

• Will I owe Indiana county tax?

  Maybe. Indiana military personnel have special county tax filing considerations.

• Do I qualify for the National Guard and Reserve Component Members Deduction?

  There is a deduction available for certain members of the reserve components of the Army, Navy, Air Force, Coast Guard, Marine Corps or the Merchant Marine, or a member of the Indiana Army National Guard or the Indiana Air National Guard.

  A deduction is available for the income received as a result of service on involuntary orders during the period the above members were deployed and mobilized for full-time service, or during the period the above member's Indiana National Guard unit was federalized.

  If you meet the above-requirements, see instructions in the IT-40 Instruction booklet for details on how to figure your deduction.

Rules concerning income tax and gambling vary internationally.

• 1United States

United States[edit]

In the United States, gambling wins are taxable.

The Internal Revenue Code contains a specific provision regulating income-tax deductions of gambling losses. Under Section 165(d) of the Internal Revenue Code, losses from “wagering transactions” may be deducted to the extent of gains from gambling activities.^[1] Essentially, in order to qualify for a deduction of losses from wagering, the taxpayer can only deduct up to the amount of gains he or she accrued from wagering. In Commissioner v. Groetzinger, the Supreme Court Justice Blackmun alludes to Section 165(d) which was a legislative attempt to close the door on suspected abuse of gambling loss deductions.^[2]

Wagering Transaction[edit]

The Internal Revenue Service has ruled that a “wagering transaction” consists of three elements.^[3] First, the transaction must involve a prize. Second, the element of chance must be present. Finally, the taxpayer must give some consideration.

Section 165(d) and Professional Gamblers[edit]

In Bathalter v. Commissioner, a full-time horse-race gambler had gains of $91,000 and losses of $87,000.^[4] The taxpayer deducted the expenses under Section 162.^[5] The service argued that Section 165(d) precluded the taxpayer from engaging in gambling as a 'trade or business.'^[4] The Tax Court held that the taxpayer's gambling was a business activity and allowed the deductions.^[6] In essence, the court held that Section 165(d) only applies when a taxpayer is at a loss instead of a net gain and “serves to prevent the [taxpayer] from using that loss to offset other income.” ^[7] However, if the taxpayer has a net gain, as the horse-race gambler did, then the taxpayer may deduct the expenses under Section 162, and Section 165(d) does not apply.^[8]

Section 165(d) and Recreational Gamblers[edit]

In addition, in Valenti v. Commissioner, the court reiterated that Section 165(d) applies to professional gamblers as well as recreational gamblers.^[9] The court stated, '... it has been held both by this Court and various courts of appeals that wagering losses cannot be deducted, except to the extent of the taxpayer's gains from wagering activities, and it has been so held even where such activities were conducted as a trade or business as opposed to a hobby.'^[10] Therefore, for example, if a recreational gambler visits a casino one Saturday and accumulates $600 of losses and $200 of gains, that recreational gambler may deduct $200 of the wagering losses (because she can only deduct an amount up to the amount of wagering gains she accrued).

United Kingdom[edit]

In the United Kingdom, wins (unless in the course of a trade) are not taxable and losses are not deductible.

Germany[edit]

In Germany, wins are taxable since July 2012 by 5% of the winnings (profit).

See also[edit]

References[edit]

1. ^IRC Section 165(d).
2. ^480 U.S. 23, 32 (1987).
3. ^Technical Advice Memorandum 200417004.
4. ^ ^abT.C. Memo 1987-530.
5. ^IRC Section 162.
6. ^Id.
7. ^Id.
8. ^Id.
9. ^T.C. Memo 1994-483.
10. ^Id.