Indiana Recovery of Deductions 616
Indiana allows taxpayers to claim a deduction for recovered itemized deductions under Code 616, but only under specific conditions. This deduction is available when you reported recovered itemized deductions as “other income” on line 8 of your federal Schedule 1 (Form 1040 or 1040-SR). The recovery must also be reported on Indiana Schedule A, Section 1, line 20B, to qualify for the deduction on your Indiana return.
Eligibility and Reporting
- Only recoveries reported as “other income” on federal Schedule 1, line 8, are eligible.
- The amount claimed must also be reported on Indiana Schedule A, Section 1, line 20B.
- Enter the deduction on the appropriate line of Form IT-40 or IT-40PNR, and code it as 616 under Schedule C, line 11.
- Indiana does not allow general itemized deductions from IRS Form 172 or IRS Publication 536 unless they are recoveries reported as other income.
Common Examples of Recoveries
Recoveries typically include:
- Tax refunds from prior years
- Reimbursements for previously deducted expenses
- Rebates for expenses that were itemized in earlier years
Important Notes
Indiana does not permit general itemized deductions from IRS Form 172 or IRS Publication 536. The only exception is when the recovery is reported as “other income” on federal Schedule 1 and also reported on Indiana Schedule A, line 20B. In such cases, the deduction is allowed under Code 616.
Source:
Form IT-40PNR Instructions
Form IT-40 Instructions
Indiana State Instruction
Disclaimer: Always verify details with the official Federal or State Department of Revenue Forms and Instructions.