Indiana Other Add-Backs
When filing your Indiana state income tax return as a nonresident or part-year resident, you may need to make certain adjustments to your federal adjusted gross income (AGI) to comply with Indiana tax law. These adjustments are known as "add-backs" and are required to ensure that your Indiana taxable income reflects the state’s specific rules, which may differ from federal guidelines.
What Are Indiana Other Add-Backs?
Indiana Other Add-Backs refer to specific income items or deductions that must be added back to your federal AGI when calculating your Indiana state taxable income. These are typically required because Indiana does not conform to certain federal tax provisions or has its own unique tax rules.
Common Examples of Other Add-Backs
- Bonus Depreciation: If you claimed bonus depreciation on your federal return, Indiana may require you to add it back.
- IRC Section 179 Expensing: The federal deduction for business equipment under Section 179 may need to be added back for Indiana purposes.
- State and Local Tax Deduction (SALT): If you deducted SALT on your federal return, Indiana may require an add-back for state tax purposes.
- Uncertain Federal Conformity Items: If federal legislation passed after January 1, 2023, modifies federal AGI and Indiana has not yet adopted it, you may add back those items as an “other” add-back.
Where to Report Other Add-Backs
Other add-backs are typically reported on Form IT-40PNR, specifically on Line 2a, where you list required Indiana add-backs. You should refer to the Form IT-40PNR instruction booklet for a complete list of required add-backs under Schedule B: Add-Backs.
Additionally, if you are filing Form IT-40, you may use Code 151 to deduct the add-backs required for Indiana purposes. However, do not include modifications from prior-year Indiana adjustments such as bonus depreciation catch-up modifications.
Important Notes
- Always complete your federal return (Form 1040/1040-SR) before completing your Indiana return.
- If you are unsure whether Indiana will adopt a new federal provision, you may choose to add it back as an “other” add-back. If Indiana later adopts the provision, you can file an amended return to recover the add-back.
- For full-year nonresidents, certain types of income (e.g., interest from bonds, dividends, unemployment compensation) are not subject to Indiana income tax and should not be included in the add-backs.
Source:
Form IT - 40PNR Instructions
Form IT - 40 Instructions
Schedule IT - 40PNRA Instructions
Disclaimer: Always verify with the official Federal or State Department of Revenue Forms and Instructions for the most accurate and up-to-date information.