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Hoosiers start receiving $125 automatic tax refund

Indiana is aiming to complete the refund statewide by Sept. 1.

INDIANAPOLIS — Indiana Gov. Eric Holcomb announced Hoosiers should expect to start receiving $125 Automatic Taxpayer Refunds in the coming weeks.

Refunds began Wednesday, May 4 through direct deposits for residents who have filed their income taxes and provided their bank information on their return. The direct deposits are expected to continue through July.

Paper checks will be issued beginning in late July and continue through August, with the goal of completing all refunds by Sept. 1.

“I’m beyond thrilled that this spring and summer we are returning money back into the hands of Hoosier taxpayers, where it belongs,” Holcomb said in a statement. “Our conservative fiscal leadership and pro-growth policies makes this tax refund possible for all Hoosier households.”

That processing timeline is four months longer than the May 1 completion target that the governor’s office stated when announcing the refund amount in December.

State officials on Wednesday cited “supply chain issues” in the paper industry for delays in the mailing of checks.

“There are multiple steps required to handle the high volume of ATRs, so we encourage Hoosiers to be patient throughout this process, as it will most likely extend to this fall,” a Department of Revenue statement said.

Holcomb announced in December that over 4 million taxpayers would be receiving a $125 refund after filing their 2021 taxes. An estimated $545 million in refunds will be going back to Hoosiers or to support teacher pensions.

The one-time direct deposit will arrive in bank accounts beginning in May and continue through July if a taxpayer:

  • filed an Indiana resident tax return for 2020 before Jan. 3, 2022; and
  • filed a 2021 Indiana resident tax return by April 18, 2022; and
  • listed direct deposit checking or savings account information for your 2021 Indiana income tax refund.

Taxpayers will receive a mailed check from the Auditor of State starting in July through August if they:

  • do not meet the requirements for direct deposit; or
  • filed for an extension of time to pay on their 2021 Indiana resident tax return; or
  • included directed deposit information for an account associated with refund advance loans or similar arrangements; or
  • could not otherwise have a direct deposit sent to their bank account.

Whenever possible, one refund of $250 will be issued by direct deposit or check for married couples filing jointly, as long as each is eligible for the refund.

The credit will result in a 12% cut in the average Hoosier's annual income tax liability. The typical taxpayer liability is around $1,000.

Residents will not have to take any action to receive the tax refund, which is in addition to and separate from any refund they may receive after filing their 2021 state income tax returns.

Those payments are being made because of a big jump in state tax collections helped by federal COVID-19 relief funding. That revenue jump increased the state government's cash reserves to a record $3.9 billion as of last summer, triggering the taxpayer refund law for the first time since 2012.

Even with the refund payments, continued strong tax collections are projected to push state government’s overall budget surplus to more than $5 billion by the end of June.

Hoosiers can visit the Department of Revenue website for information about when to expect to receive their refund.

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