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DOR > En Español  > Señora Hinojosa Habla De Impuestos > Deductions and Credits for You Deductions and Credits for You

March 4, 2009

In these tough financial times everyone is looking for ways to reduce his or her state tax burden. This is especially important to keep in mind when filing your taxes.

The state allows deductions that reduce the amount of your income that is taxable. For example, three deductions people may take include:

  • Property Tax Deduction - Hoosier homeowners are eligible to take off the amount of property tax paid on their Indiana home. You can deduct the amount of property tax paid or $2,500, whichever is less.
  • Renter’s Deduction - Most renters also get a tax break. Rent paid on your Indiana residence (up to $3,000) can be taken off your state income tax return.
  • Unemployment Compensation Deduction - Indiana may tax a smaller amount of unemployment compensation than what is being taxed on your federal income tax return.

The state also allows tax credits that reduce the amount of the tax you must pay. For example, three credits people may take are:

  • Earned Income Credit - If you claimed earned income credit on your federal tax return, then Indiana will credit you 6 percent of that earned income credit on your state tax return.
  • State and County Tax Withholding Credit - You can claim the Indiana state and Indiana county tax amounts withheld from your pay as credits when you file your Indiana income tax return.
  • College Credit - If you donated money or property to an Indiana college or university, you may be able to take a credit. Note that the tuition paid to a college or university is not considered a contribution.

For more information on these deductions and credits check out the Department’s new Spanish Web site where you can find the translated IT-40 booklet. In this booklet you can find descriptions for all the deductions and credits that are available. Just visit, www.in.gov/dor/3326.htm

If you have any questions and would like to speak with a bilingual representative at the Indiana Department of Revenue, please call (317) 232-2240 (press 2 for Spanish) from 8 a.m. to 4:30 p.m., Monday through Friday. Or you can submit questions via e-mail to jevans@dor.in.gov

If you have any suggestions for this blog, please e-mail those suggestions to Señora Hinojosa at feedback@dor.in.gov

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