Indiana Homeowner's Residential Property Tax Deduction
The Indiana Homeowner’s Residential Property Tax Deduction allows eligible taxpayers to reduce their state taxable income by up to $2,500 ($1,250 if married filing separately) for property taxes paid on their principal residence. This deduction is available to individuals who paid Indiana residential real estate taxes on their primary home.
Eligibility Criteria
- Your Modified Indiana Adjusted Gross Income (AGI) must be less than $18,600.
- You must not be claiming the Homeowner’s Residential Property Tax Deduction on Schedule 2 (for Form IT-40) or Schedule C (for Form IT-40PNR), line 2.
- The property must be your principal place of residence — defined as your true, fixed home where you intend to return after being absent.
- Property taxes paid on summer homes or vacation homes are not deductible.
How to Claim the Deduction
- Complete the information area on Schedule 2 (for Form IT-40) or Schedule C (for Form IT-40PNR), line 2.
- Enter the address of your principal residence where the Indiana property tax was paid. If different from the address on the front of the return, include it here.
- If you had more than one principal residence during the year and paid Indiana property tax on both, list the additional residence on a separate piece of paper.
Important Notes
- You must maintain proof of payment for Indiana property taxes. Acceptable documents include Form 1098, property tax statements from your local assessor’s office, or cancelled checks.
- The deduction is not available if you are claiming other credits or deductions that conflict with this benefit.
- For nonresidents, only income derived from Indiana sources is subject to Indiana tax. However, property tax deductions are based on residency and payment location.
Modified Indiana AGI Calculation
To determine your Modified Indiana AGI for eligibility:
- Prepare your state tax return (Form IT-40 or IT-40PNR) through line 7.
- Add any Homeowner’s Residential Property Tax Deduction reported on Schedule 2 (IT-40) or Schedule C (IT-40PNR), line 2.
- Sum the amounts from steps 1 and 2 to get your Modified Indiana AGI.
Source:
Form IT-40
Form IT-40PNR
Indiana State Instruction
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions before filing.