Ind. residents to receive tax refunds from surplus

Indiana taxpayers will receive a $111 tax refund just for filing their 2012 income tax returns.

The automatic refund is the first of its kind in the state and was generated by a plan created by Gov. Mitch Daniels and approved by the Indiana General Assembly in 2011. The state’s $2.155 billion budget surplus reserve is 15 percent of the state’s budget.

The total surplus is $721 million. The remaining $360 million was used to strengthen the Judges’ Pension Fund, Prosecutors’ Pension Fund, State Police Pension Fund  , Pre-1996 Teachers’ Retirement Fund and Conservation, Gaming and Excise Officers’ Pension Fund.

According to the governor’s plan, funds in excess of 10 percent of the state budget are to be returned to taxpayers as a refund. In the future, that threshold will increase to 12.5 percent.

Indiana Department of Revenue Spokesman Bob Dittmer said the current per capita model replaced an earlier pro-rated model in which taxpayers received a
percentage.

Daniels said the per capita model is ideal for getting money back to taxpayers.

“We thought that any refund that did happen would be maybe more meaningful to low-income and moderate-income people,” Daniels said.

Any Indiana citizen who completes the IT 40, IT 40 EZ or IT 40 PNR forms is eligible for the refund. Joint filers can receive a $222 refund.

Dittmer said the process is simple. Qualifying individuals or couples will put $111 or $222, respectively, on the appropriate line on their tax return form.

“Say they get all their deductions, etc, get down to credits, at the bottom end of the calculations, if they end up owing us a dollar, they’ll keep that dollar and we’ll send them $110,” Dittmer said.

Daniels said one in four taxpayers will receive at least a 25 percent discount, one in seven will receive at least a 50 percent refund and one in 10 will receive all their tax dollars back.

According to the governor’s office, 3.26 million eligible taxpayers will receive the refund.

Daniels said returning the money to taxpayers rather than allocating it to other departments is fair.

“Past a point of rock-solid fiscal strength, it’s better to leave this money in the pockets of those who earned it than to let it burn a hole, as it tends to do, in the pocket of government,” Daniels said in a press release.