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Indiana Add-Backs

Although most of the expenses and deductions used to figure your federal taxes are allowed on your Indiana tax return, some need to be “added back” to calculate the correct income used to figure Indiana income tax due. 

For example, interest earned from a direct obligation of a state or political subdivision other than Indiana is taxable to Indiana if the obligation was acquired after Dec. 31, 2011. An individual who received $421 in interest from bonds issued by another state and purchased after Dec. 31, 2011, will have to “add back” $421 to the amount of income used to calculate the tax obligation for Indiana.

You must complete your federal tax return, Form 1040/1040-SR, through the federal adjusted gross income (AGI) line before beginning to figure your Indiana individual income tax return.

A complete list of add-backs can be found in the current year IT-40 instruction booklet.

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