How To Get A Tax Credit From Illinois

Transcription

1 Indiana Depatment of Revenue Individual Income Tax Booklet IT-40 Cove Page (Individual Foms ae on the last pages.)

2 What fom do I file? Indiana has fou diffeent individual income tax etuns. See which one is ight fo you. Fom IT-40 This fom is available fo Indiana full-yea esidents. Note: If you wee a full-yea Indiana esident, but you e filing a joint etun and you spouse was not a full-yea Indiana esident, you must file fom IT-40PNR. Fom IT-40EZ This fom is available fo Indiana full-yea esidents who meet all of the following qualifications: ü have filed a fedeal Fom 1040EZ; ü have been an Indiana full-yea esident duing 1999; ü claim only the Rente s Deduction and/o Unemployment Compensation Deduction; and ü have only Indiana state and county tax withholding cedits. Note: If you have any othe taxable income, deductions and/ o cedits, you must file Fom IT-40. Fom IT-40PNR This fom is available fo Indiana pat-yea and full-yea nonesidents. Note: If you wee a full-yea Indiana esident, but you e filing a joint etun and you spouse was not a full-yea Indiana esident, you must file fom IT-40PNR. Fom IT-40RNR This fom is available fo individuals who meet both of the following equiements: You must: ü have been a full-yea esident of one of the following states: Kentucky, Michigan, Ohio, Pennsylvania o Wisconsin; and ü have eceived only the following types of income fom Indiana: wages, salaies, tips o othe compensation. Note: If you have any othe kind of Indiana-souce income, you'll have to file Fom IT-40PNR. No Recipocal Ageement with Illinois Illinois ended it's ecipocal tax ageement with Indiana on Januay 1, At the time of pinting, no new ageement has been eached. Illinois esidents with Indiana souce income should continue to file fom IT-40PNR. Indiana esidents with salay, wage, tip and/o commission income fom Illinois may be eligible to claim a cedit fo taxes paid to othe states. See Schedule 2, line 5 instuctions beginning on page 26 fo moe infomation Changes Homeowne's Residential Popety Tax Deduction Homeownes can deduct up to $2,500 of Indiana popety tax paid on thei pincipal esidence. See page 10 fo moe infomation. Indiana Eaned Income Cedit Cetain lowe income individuals who have both eaned income and a qualifying child may be eligible fo a cedit up to $408. See page 20 and the new Schedule IN-EIC fo moe infomation. Additional Exemption fo the Eldely Hoosie taxpayes age 65 o olde whose fedeal adjusted goss income is less than $40,000 ae eligible fo an additional $500 exemption. See page 15 fo moe infomation. Holocaust Victim's Settlement Payment Deduction Individual's eceiving a Holocaust victim's settlement payment may be eligible fo a deduction. See page 14 fo moe infomation. Diect Deposit You can now have you efund diectly deposited to you bank account. See page 31 fo details. Community Revitalization Enhancement Distict Cedit A state and local income tax liability cedit is available fo a qualified investment made within a community evitalization enhancement distict. See page 26 fo details. Additional Exemption fo Dependent Childen The $500 additional exemption fo cetain dependent childen has been inceased to $1,500. See page 15 fo details. Rente's Deduction Rentes ae now able to deduct up to $2,000 (inceased fom $1,500) of the ent paid on thei Indiana pincipal esidence. Also, ente's must complete and attach Schedule 1. See page 10 fo moe infomation. Tax Add-Back Popety taxes ae no longe added-back on line 2. See page 9 fo moe infomation. Individual Development Account Cedit The minimum necessay contibution to an individual development fund account has been educed to $100. See page 29 fo moe infomation. Eaned Income Deduction The eaned income deduction has been eliminiated. Instead, see page 20 fo infomation about the new eaned income cedit. Pesonal Compute Donation Cedit This cedit is no longe available.

3 Need Tax Foms o Infomation Bulletins? Use You Pesonal Compute Visit ou web site on the Intenet and download the foms you need. Ou addess is: Use You Fax Machine Indiana TaxFax: If you have access to a fax machine that has a telephone attached to it, call ou fax-on-demand system at (317) fom that telephone. The system allows you to eceive state tax foms and infomation bulletins though the same fax machine on you call. It is available 24 hous a day, 7 days a week. Use You Telephone To obtain foms by phone, call (317) , 24 hous a day, 7 days a week. When calling the Foms Ode Request Line, have the following infomation eady: name of fom o fom numbe needed, numbe of copies needed, contact peson s name, daytime phone numbe, and a complete mailing addess (including city, state and zip code.) Fo ou heaing impaied taxpayes, call ou Telephone Device fo the Deaf (TDD) Numbe, (317) to eceive assistance o equest infomation about you tax efund. Use You Local Libay o Post Office Tax foms may be available in you neighbohood at you local libay o post office. They ae also available at Depatmental distict offices listed on page 38. These offices ae open Monday though Fiday between 8:15 a.m. and 4:30 p.m. Use Lage Pint Foms The Depatment has lage pint IT-40 booklets and audio cassette tapes available fo sight impaied Hoosie taxpayes. The lage pint booklet o audio tape should allow you to complete you own tax etun. If you want a lage pint o audio IT-40 booklet, you may call (317) o wite to Indiana Depatment of Revenue, P. O. Box 6155, Indianapolis, Indiana Need Help With You Retun? Use Local Assistance Visit any of the distict offices listed on page 38 o take advantage of the Voluntee Income Tax Assistance (VITA) pogam o the Tax Counseling fo the Eldely (TCE) pogam. These pogams povide fee tax etun pepaation help to low income, eldely and taxpayes with special needs. Voluntees will help fill out fedeal and state foms fo those who qualify. You can find the neaest VITA/TCE location by calling the Intenal Revenue Sevice at If you need assistance with you income tax etun be sue to take you W-2s, 1099s, o WH- 18s and, if going to a distict office, a copy of you completed fedeal tax etun. Use the Automated Infomation Line You may call the Automated Infomation Line fom a touch-tone telephone to access 1) status of efunds; 2) peecoded tax topics; and 3) tax liability balances. The numbe is (317) This touch-tone phone sevice is available beginning at 8:00 a.m. on Mondays though 10:00 p.m. on Satudays. If you have a otay phone, call (317) fom 8:15 a.m. to 4:30 p.m., Monday though Fiday, and a Depatment epesentative will help you. The peecoded tax topics include infomation on Collection Pocedues, Business Registation Requiements and How to Registe a Business, Payment Plan Pocedues, Estimated Tax/IT Penalty, Use Tax Infomation, County Tax, and 1999 Tax Highlights. To eceive infomation on the daily balance due of a tax liability you will need a copy of you tax notice because you will need to ente the tax identification numbe o social secuity numbe shown on the notice. Call (317) and follow the instuctions. Intenet If you need help deciding which fom to file, o to get infomation bulletins o policy diectives on specific topics, visit ou web site at: Call Us To eceive help with basic tax questions, call us at (317) Monday-Fiday between the hous of 8:15 a.m. to 4:30 p.m. Ready To File You Retun? Use the Electonic Filing Pogam Moe than 442,000 Indiana taxpayes took advantage of the 1999 Electonic Filing Pogam to file thei state and fedeal individual income tax etuns electonically. This pogam povides Indiana taxpayes the oppotunity to file thei fedeal and state tax etuns electonically and eceive thei Indiana efunds in about half the time it takes to pocess pape, and even less if you use diect deposit, which deposits you efund diectly into you bank account. Even if thee is an amount due on eithe etun, Indiana taxpayes can still file electonically and feel comfotable knowing that the etuns wee eceived by the IRS and the Indiana Depatment of Revenue. Contact you tax pepae to see if they povide this sevice. O, if you complete you own etuns, many pepaes, banks, and cedit unions thoughout Indiana will tansmit you etuns electonically fo you. Visit the Depatment's website at: 4 Ou site contains options fo filing taxes, downloadable blank foms and instuctions, and on-line helpdesk and links.

4 Whee s You Refund? The Automated Infomation Line allows you to check the status of you efund. Impotant: You will need a copy of you completed tax etun because you will need to know the fist social secuity numbe shown on you etun and the exact amount of you efund in whole dollas. When you call (317) you will eceive the latest infomation available on the status of you efund. This touch-tone phone sevice is available beginning at 8 a.m. Monday though 10 p.m. Satuday. Please wait appoximately 12 weeks fom the date you filed you etun befoe calling to check on the status of you efund. If you have a otay phone, you may call (317) fom 8:15 a.m. to 4:30 p.m., Monday though Fiday, and a Depatment epesentative will help you. A efund diectly deposited to you bank account may be listed on you bank statement as a cedit, deposit, etc. If you have eceived infomation fom the Depatment that you efund has been issued, and you ae not sue if it has been deposited in you bank account, call the ACH Section of you bank o financial institution fo claification. Moving? If you move to a new addess afte you file you tax etun and do not have a fowading addess on file with the post office, the Depatment needs to know whee to send you efund check and a tax booklet fo next yea. You can call the Depatment at (317) o visit a Depatmental distict office nea you to tell us you new addess. Public Heaing! Mak June 20, 2000 on you calenda now! In accodance with the Indiana Taxpaye Bill of Rights, the Depatment will conduct an annual public heaing on Tuesday, June 20, Please come and shae you ideas on how the Depatment of Revenue can bette administe Indiana tax laws. The heaing will be held at 9:00 a.m. in Rooms 1 & 2 of the Confeence Cente, Indiana Govenment Cente South, 402 West Washington Steet, Indianapolis, Indiana. If you can't attend, please submit you concens in witing to: Indiana Depatment of Revenue, Commissione s Office, 100 Noth Senate Avenue, Indianapolis, Indiana Befoe You Begin Impotant: Complete you fedeal tax etun fist. Please use ink. Name, Addess and Social Secuity Numbe The fist IT-40 in this booklet may have you name(s), social secuity numbe(s) and addess aleady filled in. If this infomation is accuate, the Depatment encouages you to use it. Howeve, if any infomation is incoect, don't use that fom; instead, pint the coected infomation on the second IT-40 in the booklet and file it. If you didn't eceive a peaddessed booklet please pint you lettes and numbes neatly in ink. Filling in the Boxes If you ae handwiting lettes and numbes in the boxes, please pint you lettes and numbes neatly. Unesolved Poblems? Example 1 Example 2 You Fist Name K a t h y n 2 1, Use the Taxpaye Advocate As pescibed by the Taxpaye Bill of Rights, the Depatment of Revenue has an appointed Taxpaye Advocate whose pupose is to facilitate the esolution of difficult taxpaye complaints and poblems. If you have a complex tax poblem that you have not been able to esolve though nomal channels, o a tax assessment places an undue hadship on you, you may eceive assistance fom the Office of the Taxpaye Advocate. Submit suppoting infomation and documents to: Indiana Depatment of Revenue, Office of the Taxpaye Advocate, P.O. Box 6155, Indianapolis, IN Using a Typewite If you wish to use a typewite to complete this fom, you must make enties in the appopiate aeas on the fom Example 3 Example 4 You Fist Name Kathyn 21, , Impotant: If a line does not apply to you, leave it blank. Do not use dashes o othe symbols to indicate that you have no enty fo that line. 5

5 Attach W-2 Foms between Lines 1 and 25 Fom IT Indiana Full-Yea Resident Individual Income Tax Retun Due Apil 17, 2000 Revised 9/99 SF# 154 If you ae not filing fo the calenda yea Januay 1 though Decembe 31, 1999,ente peiod fom: to: You Social Spouse s Social Check the box if you ae Secuity Numbe Secuity Numbe maied filing sepaately. q You Fist Name Initial Last Name If filing a joint etun, Spouse s Fist Name Initial Last Name Pesent Addess (Numbe and Steet o Rual Route) School Distict Numbe (see page 34) City State Zip Code + 4 Foeign County (if applicable) Ente the 2-digit county code numbes (found on page 6 in the instuction booklet) fo the county whee you lived and woked on Januay 1, Taxpaye Spouse County whee County whee County whee County whee you lived you woked you lived you woked 1. Ente you Fedeal Adjusted Goss Income fom you fedeal etun (see page 9) Tax Add-Back: tax deducted fom fedeal Schedule C, C-EZ, E, and/o F only Net Opeating Loss Cayfowad fom fedeal Fom 1040, line 21, Othe Income Income taxed on fedeal Fom 4972 (attach Fom 4972: see page 10) Add lines 1 though 4...Total Indiana Income 6. Indiana deductions: Ente amount fom Schedule 1, line 19 and attach Schedule Line 5 minus line 6... Indiana Adjusted Goss Income 8. Numbe of exemptions claimed on you fedeal etun x $1,000. (If no fedeal etun was filed, ente $1,000 pe qualifying peson: see page 15.) Additional exemption fo cetain dependent childen (see page 15). Ente numbe x $1, Check box(es) below fo additional exemptions if, by Decembe 31, 1999: You wee: 65 o olde o blind. Spouse was: 65 o olde o blind. Total the Numbe of boxes checked x $1, Check box(es) below fo additional exemptions if, by Decembe 31, 1999: You wee: 65 o olde and line 1 above is less than $40,000. Spouse was: 65 o olde and line 1above is less than $40,000. Total the numbe of box(es) checked x $ Add lines 8, 9, 10 and Total Exemptions 13. Line 7 minus line 12 (if answe is less than zeo, leave blank)... State Taxable Income 14. State Adjusted Goss Income Tax: Multiply line 13 by 3.4% (.034) County Income Tax. See instuctions on page Use Tax due on out-of-state puchases (see page 19) Household Employment Taxes: Attach Schedule IN-H (see page 19) Add lines 14 though 17. Ente hee and on line 26 on the back... Total Tax 19. Indiana State Tax Withheld: (Fom box 18 of you W-2s, box A of WH-18s o fom 1099s) Indiana County Tax Withheld:(Fom box 21 of you W-2s, box B of WH-18s o fom 1099s) Estimated Tax Paid: Include any extension payment made on Fom IT Unified Tax Cedit fo the Eldely: see instuctions on page Eaned Income Cedit: Attach Schedule IN-EIC Indiana Cedits: Ente the total fom Schedule 2, line 12 and attach Schedule Add lines 19 though 24. Ente hee and on line 27 on the back...total Cedits AA BB CC DD If you have a loss (o negative enty), please indicate so by placing it in a backet. Example: ( 1.00 ) Please ound all enties to neaest whole dolla (see instuctions, pg 7) Tun the page Maied Filing Sepaately If you file you fedeal income tax etun as maied filing sepaately, you also must file maied filing sepaately with Indiana. If you ae, fill in the two social secuity numbe boxes on the top of the fom and check the box diectly to the ight of those boxes. Ente the name of the peson filing the etun on the top line, but do not ente you spouse's name on the second name line. School Distict Numbe Ente the 4-digit school distict numbe fo whee the pimay taxpaye lived on Januay 1, Pimay taxpaye is the fist name listed at the top of the tax etun. The list of school distict numbes can be found on pages 34 and 35. Note: If the pimay taxpaye did not live in Indiana on Januay 1, 1999, ente the code numbe "9999." If the school distict numbe is not enteed, the pocessing of you etun will be delayed. County Infomation Ente the 2-digit code numbes fo the county(s) whee you and you spouse, if filing joint, lived and woked on Januay 1, You can find these code numbes on the chat below. See the instuctions beginning on page 15 fo moe infomation, including the definitions of the county whee you live and wok, details fo militay pesonnel, etied individuals, homemakes, unemployed, out-of-state files, etc. Indiana County 2-Digit Code Numbe Chat Use the chat below to find the 2-digit county code numbe to fill in at the top of Fom IT-40. You will need to find the code numbe fo the county(s) whee you lived and woked on Januay 1, If you woked at home, wee etied o wee unemployed on Januay 1, 1999, ente the county numbe whee you lived in both boxes. Impotant: If you woked outside Indiana on Januay 1, 1999, ente code # 00 unless you woked in any of the following states: Illinois, Kentucky, Michigan, Ohio, Pennsylvania o Wisconsin. See the 2-digit code numbes fo those states in the box following Whitley County below. 2-Digit County Code Numbe County # Name Adams Allen Batholomew Benton Blackfod Boone Bown Caoll Cass Clak Clay Clinton Cawfod Daviess Deabon Decatu DeKalb Delawae Dubois Elkhat County # Name Fayette Floyd Fountain Fanklin Fulton Gibson Gant Geene Hamilton Hancock Haison Hendicks Heny Howad Huntington Jackson Jaspe Jay Jeffeson Jennings County # Name Johnson Knox Kosciusko LaGange Lake LaPote Lawence Madison Maion Mashall Matin Miami Monoe Montgomey Mogan Newton Noble Ohio Oange Owen 6 County # Name Pake Pey Pike Pote Posey Pulaski Putnam Randolph Ripley Rush St. Joseph Scott Shelby Spence Stake Steuben Sullivan Switzeland Tippecanoe Tipton County # Name Union Vandebugh Vemillion Vigo Wabash Waen Waick Washington Wayne Wells White Whitley Out-of-State code except the following: Illinois Kentucky Michigan Ohio Pennsylvania Wisconsin

6 Foeign o Militay Addesses The US Post Office equies that the full foeign county name appea in all addesses. Standad two-chaacte abbeviations fo povinces and teitoies should be enteed in the State aea on the tax etun. Oveseas militay addesses must contain the APO, FPO designation in the city field along with a two-chaacte state abbeviation of AE, AP, o AA and the zip code. Place these thee o two lette designations in the city name aea. Refund Check Addess You efund check will be issued in the name(s), addess and social secuity numbe(s) shown on the font of you tax etun. It is vey impotant that this infomation is coect and legible. Any wong infomation will cause poblems and delay you efund. Please ound off you amounts to the neaest dolla. To do this, dop amounts of less than 50. Example: $ ounds down to $ Incease amounts of 50 o moe to the next highe dolla. Example: $ ounds up to $ Losses o Negative Enties If you ae epoting a loss o a negative amount on lines 1, 5 and/o 7, put backets aound the numbe. Example: (1.00). Discove Cad Payment Attach you Discove Cad Payment Coupon in the uppe left-hand cone on the font of the etun. See instuctions on page 32. Attaching W-2s and Enclosing Checks and Foms You should staple you W-2s, 1099s o WH-18s to the fom in the space to the left of lines 1 though 25 on the font of Fom IT-40. To help us pocess you fom please make sue these attachments don't cove the county box infomation above line 1 o the boxes at the bottom of the fom unde line 25. Do not staple you check o money ode to the fom as this will delay pocessing you etun. Just enclose them in the same envelope with you etun. Attaching Schedules When assembling you tax etun, schedules should be attached to the back of Fom IT-40 in an "attachment sequence ode". This numbe is located in the uppe ight-hand cone of the schedule. Fo example, attach Schedules 1 & 2 (attachment sequence No. 01) fist and then Schedule CT-40 (attachment sequence No. 02) second. Attach by placing one staple in the uppe left-hand cone. If you have a schedule that is blank (has no enty) do not attach it unless you have completed infomation on the back of it. Who Should File/Filing Status You may need to file an Indiana income tax etun if: you lived in Indiana and eceived income, o you lived outside Indiana and had any income fom Indiana. Note: If you and you spouse file a joint fedeal etun, you must file a joint etun fo Indiana. If you and you spouse file sepaate fedeal etuns, you must file sepaate etuns fo Indiana. Thee ae fou types of etuns available. The type you need to file is geneally based on you esidency status. Read the following to decide if you ae a full-yea esident, pat-yea esident, o nonesident of Indiana and which type of etun you should file. Full-Yea Residents Full-yea esidents must file eithe Fom IT-40, Indiana Full-Yea Resident Individual Income Tax Retun, o Fom IT-40EZ fo Full- Yea Indiana Resident Files with No Dependents. If you filed a 1999 fedeal Fom 1040EZ, wee a full-yea esident of Indiana, claim only the ente's deduction and/o unemployment compensation deduction, and have only Indiana state and county tax withholding cedits, file the simplified Fom IT-40EZ. If you have any othe deductions o cedits you must file Fom IT-40. You ae a full-yea Indiana esident if you maintain you legal esidence in Indiana fom Januay 1 though Decembe 31. You do not have to be physically pesent in Indiana the entie yea to be consideed a full-yea esident. Residents, including militay pesonnel, who leave Indiana fo a tempoay stay ae consideed esidents duing thei absence. Retied pesons spending the winte months in anothe state may still be full-yea esidents if: 1) they maintain thei legal esidence in Indiana and intend to etun to Indiana duing pat of the taxable yea; 2) they etain thei Indiana dive s license; o 3) they etain thei Indiana voting ights. Indiana allows $1,000 fo each exemption claimed on you fedeal etun, plus an additional $1,500 fo cetain dependent childen (see instuctions on page 15 fo moe infomation). If you did not have to file a fedeal etun, you should complete a sample fedeal etun to see how many exemptions you ae able to claim. If you wee a full-yea esident of Indiana and you goss income (the total of all you income befoe deductions) was geate than you exemptions, you must file Indiana Fom IT-40 o IT-40EZ. If you goss income is less than you total exemptions, you may file a etun to get a efund of any Indiana state and/o county tax withheld by you employe; howeve, you'e not equied to file unde these cicumstances. 7

7 Pat-Yea Residents and Full-Yea Nonesidents If you wee a pat-yea esident and eceived income while you lived in Indiana, you must file Indiana Fom IT-40PNR, Pat-Yea Resident o Nonesident Individual Income Tax Retun. If you wee a legal esident of anothe state (see below) and had income fom Indiana (except cetain inteest, dividends, o etiement income), you must file Fom IT-40PNR. Full-Yea Residents of Kentucky, Michigan, Ohio, Pennsylvania o Wisconsin If you wee a full-yea esident of Kentucky, Michigan, Ohio, Pennsylvania o Wisconsin, and you only income fom Indiana was fom wages, salaies, tips o commissions, then you need to file Fom IT-40RNR, Indiana Recipocal Nonesident Individual Income Tax Retun. Deceased Taxpayes If an individual died duing 1999, o died afte Decembe 31, 1999, but befoe filing thei tax etun, the executo, administato, o suviving spouse must file a tax etun fo them if: a) the deceased was unde the age of 65 and had goss income ove $1,000; b) the deceased was age 65 o olde and had goss income ove $2,000; o c) the deceased was a nonesident and had goss income fom Indiana. You must attach a copy of the death cetificate to the tax etun if the individual died duing Make sue to ente the month and day of death fo the taxpaye o spouse in the appopiate box located on the back of the IT-40. Fo example, a date of death of Januay 9, 1999, would be enteed as 01/09/1999. Note: The date of death should not be enteed hee if the individual died afte Decembe 31, 1999, but befoe filing the tax etun. The date of death infomation will be shown on the individual's 2000 tax etun, and a copy of the death cetificate should be attached to that etun. Signing the decedent's tax etun If a joint etun is filed by the suviving spouse, the suviving spouse should sign his/he own name and afte the signatue wite: Taxpaye and Suviving Spouse. If filing a etun fo a deceased individual, an executo o administato appointed fo the deceased s estate must file and sign the etun (even if this isn't the final etun), indicating thei elationship afte thei signatue (e.g. administato). If an executo o administato has not been appointed, the peson filing the etun should sign and give thei elationship to the deceased (e.g. "John Doe, nephew"). completing the affidavit and etuning it to the Depatment, a new efund check will be issued to the suviving spouse, executo o administato of the estate. Only one tax etun should be filed on behalf of the peson who died. Militay Pesonnel If you wee an Indiana esident when you enteed the militay sevice, you emain an Indiana esident even if you ae stationed outside of Indiana. You must epot all you income to Indiana on Fom IT-40, Indiana Full-Yea Resident Individual Income Tax Retun. If you changed you legal esidence (militay home of ecod) duing 1999, you ae a pat-yea esident and should file Fom IT- 40PNR, Pat-Yea Resident o Nonesident Individual Income Tax Retun. You also must attach a copy of Militay Fom DD2058 to the tax etun. As an Indiana pat-yea esident you will be taxed on the income you eaned while you wee a esident of Indiana, plus any othe income fom Indiana souces. If you legal esidence is a state othe than Indiana, you should file IT-40PNR, Pat-Yea Resident o Nonesident Individual Income Tax Retun, because you would be consideed a nonesident of Indiana. You militay income may have to be epoted on the tax etun you may need to file fo you state of esidence. If you ae a full-yea Indiana esident in the militay, you spouse is a legal esident of anothe state and you filed a joint fedeal etun, you will need to file Fom IT-40PNR. Refe to the instuctions on page 16 fo an explanation of county of esidence fo militay pesonnel. When To File The due date fo filing you tax etun is Apil 17, Howeve, you may file as ealy as Januay 1, You tax etun must be postmaked by Apil 17th to be consideed timely filed. Fiscal yea tax etuns ae due by the fifteenth (15) day of the fouth (4th) month afte the close of the fiscal yea. You must complete the Fiscal Yea date at the top of the fom. Penalties Fo Late Payments If you don't file you tax etun and pay the amount of tax owed by the due date, Indiana law equies you to pay penalty and inteest on the late payment. See the instuctions fo penalty and inteest on page 31. If you (the suviving spouse, administato, o executo) have eceived a efund and cannot cash the efund check, contact the Depatment to get a widow s o distibutee s affidavit. Afte 8

8 Extensions If you can't file by the due date and you don't owe any tax amount with you tax etun, you ae not equied to file fo an extension of time to file. Howeve, if you ae expecting a efund, you might need an extension of time to file if you ae claiming the Unified Tax Cedit fo the Eldely. See the instuctions fo the Unified Tax Cedit fo the Eldely on page 20. If you can t meet the filing deadline and expect to owe tax with you etun, you should apply fo an automatic extension. The extension allows additional time to complete and file you income tax etun; howeve, the extension does not povide additional time to pay the amount of tax owed. To make the extension valid, you must pay at least 90% of the tax due (Fom IT-40, line 35 minus lines 31 and 32) by Apil 17, Thee ae two ways to get an extension fo filing you Indiana tax etun. One way is to file Indiana s extension Fom IT-9 by Apil 17, This extends the filing date to June 15, Remembe, you must pay at least 90% of the tax due fo the extension to be valid. A copy of Fom IT-9 is on page 36. Indiana also ecognizes valid fedeal extension dates plus 30 days. So, if you file fo a fedeal extension, simply attach a copy of the Fedeal Fom 4868 to you Indiana etun when filing. Again, 90% of the tax due must still be paid by Apil 17, Militay pesonnel on duty outside of the U.S. and Pueto Rico on the filing due date will be allowed an automatic sixty (60) day extension of time to file. A statement must be attached to the etun veifying that you wee outside of the U.S. o Pueto Rico on Apil 17, Militay pesonnel in a pesidentially declaed combat zone have an automatic extension of 180 days afte they leave the combat zone. Also, if they ae hospitalized outside the United States as a esult of such sevice, the 180 day extension peiod begins afte being eleased fom the hospital. The spouse of such seviceman must use the same method of filing fo both fedeal and Indiana (e.g. single o joint). When filing the etun, wite "Combat Zone" acoss the top of the fom (above you social secuity numbe). Note: Valid extensions ae only fo filing puposes. Inteest will be due on any tax that emains unpaid duing the extension peiod. Income and Indiana Additions: Line-by-Line Instuctions Line 1 - Fedeal Adjusted Goss Income Ente the amount you epoted as you Fedeal Adjusted Goss Income on line 33 of fedeal Fom 1040, line 18 of fedeal Fom 1040A, o line 4 of fedeal Fom 1040EZ. This is you income befoe the standad o itemized deductions o exemptions allowed on the fedeal income tax etun. If you wee not equied to file a fedeal etun, epot the amount you would have shown on you fedeal etun if you had been equied to file. If the amount is a loss, o (negative enty), place it in a backet. Line 2 - Tax Add-Back If you did not complete Fedeal Schedules C, C-EZ, E, o F (which includes sole popietoship income, fam income, ental, patneship, S copoation, and tust and estate income o loss), then do not complete this line. If you did complete one o moe of these fedeal schedules, and if you claimed deductions fo taxes based on o measued by income and levied at any state level by any state of the United States on those schedules, then you must add these taxes back to you Indiana income. Ente the total amount of these taxes on this line. Change: Peviously, the deduction fo taxes levied on popety by any subdivision of any state on fedeal Schedules, C, C-EZ, E o F, wee equied to be added back on this line. Beginning with tax yea 1999, you ae no longe equied to add these taxes back. Note: Income, losses and/o expenses fom vaious othe schedules and foms may flow though to fedeal Schedules C, E and F. Fo example, patneship income fom fedeal Schedule K- 1 (Fom 1065) may be included on fedeal Schedule E, while expenses fom fedeal Fom 8829 may be included on fedeal Schedule C. Make sue to check those vaious othe foms and schedules to see if they also include deductions fo any taxes based on o measued by income and levied at any state level fom which you po ata shae must be added back hee. Whee To Mail You Retun Mail you completed etun, plus all attachments, to: Indiana Depatment of Revenue P.O. Box 40 Indianapolis, IN Line 3 - Net Opeating Loss Add-Back If you epoted a net opeating loss deduction (on line 21 of you fedeal Fom 1040) that was caied fowad fom pio yeas, you must complete this line. Wite the amount of the net opeating loss deduction as a positive figue. (You will claim an Indiana net opeating loss deduction on Schedule 1, line 14.) Note: If you fedeal adjusted goss income this yea is a loss, and you haven't included a net opeating loss as a deduction on line 21 of you 1999 fedeal Fom 1040, then leave this line blank. 9

9 Line 4 - Lump Sum Distibution If you completed Fedeal Fom 4972, you must complete this line because the income epoted on that fom is also taxable fo Indiana puposes. The amount you should show on this line includes the capital gains epoted on Pat II plus the odinay income epoted on Pat III of Fedeal Fom Ente as a positive amount. Indiana Deductions Schedule 1 Line 1 - Rente s Deduction You may be able to take the ente s deduction if: a) you paid ent on you pincipal place of esidence, and b) the place you ented was subject to Indiana popety tax. You pincipal place of esidence is the place whee you have you tue, fixed, pemanent home and whee you intend to etun afte being absent. If you ented a manufactued home o paid ent fo you manufactued home lot, you may claim the ente s deduction if the above equiements ae met. Rent paid fo summe homes o vacation homes is not deductible. You cannot claim the ente s deduction if the ental popety was exempt fom Indiana popety tax. Examples of this type of popety ae: a) govenment owned housing, including Section 8 housing; b) popety owned by a nonpofit oganization; c) student housing; d) popety owned by a coopeative association; and e) popety located outside of Indiana. Change: How do I epot my deduction? You must claim this deduction on line 1 of Schedule 1 (you can no longe claim this deduction at the top of the back page of the IT-40). Fist, complete the infomation aea by enteing: the addess whee ented if it's diffeent fom the addess on the font of the etun (wite SAME if it is not diffeent); the landlods name and addess; the total amount of ent paid; and the numbe of months you lived thee. If you moved duing the yea o had moe than one landlod, you must list the same infomation fo each place that you ented. Attach additional pages if necessay. Change: Beginning with the 1999 tax yea, the maximum amount of you deduction has been inceased to $2,000, up fom $1,500 in pio yeas. Ente on line 1 the smalle of the total amount of ent paid o $2,000. Example: Bill paid $400 in ent at his fist apatment, moved to anothe location and paid $2,300 fo the emainde of the yea. His deduction will be limited to $2,000 even though he paid $2,700 altogethe. Impotant: You must maintain copies of you ental eceipts, landlod identifying infomation, and lease ageements as the Depatment can equie you to povide this infomation. Fo moe infomation about this deduction, contact the Depatment to get Income Tax Infomation Bulletin #38. Line 2 - Homeowne's Residential Popety Tax Deduction You may be eligible to take a deduction of up to $2,500 of the Indiana popety taxes (esidential eal estate taxes) paid duing 1999 on you pincipal place of esidence. You "pincipal place of esidence" is the place whee you have you tue, fixed home and whee you intend to etun afte being absent. Note: Popety tax paid fo summe homes o vacation homes is not deductible. How do I claim my deduction? Fist, complete the infomation aea on Schedule 1, line 2. a. Ente the addess of you pincipal esidence whee the Indiana popety tax was paid if it's diffeent fom the addess on the font of the etun (wite SAME if it is not diffeent). If you had moe than one pincipal esidence duing the yea, and you paid Indiana popety tax on that esidence, list the additional esidence(s) on a sepaate piece of pape. Example: Sue and Mack maied in Decembe They sold each of thei homes in Decembe and bought a new one. Since Sue paid popety tax on he home duing 1999, and Mack paid popety tax on his home duing 1999, they will be eligible to claim a popety tax deduction on the combined taxes paid on both homes if they ae filing a joint etun (see the limitation on d below). b. Ente the numbe of months you lived thee. If you claim moe than one esidence, indicate the numbe of months lived at the othe esidence(s) on the sepaate sheet of pape. c. Ente the amount of Indiana popety tax paid. If you claim moe than one esidence, ente the combined amount of Indiana popety tax paid on all pincipal esidences. d. Ente the lesse of $2,500 o the amount of Indiana popety tax paid. 10

10 Schedule 1: Deductions cont'd... How do I find out how much Indiana popety tax I paid on my pincipal esidence? Indiana counties annually send statements to homeownes showing how much popety tax is due on thei popety. Add togethe the 1999 sping and fall installments if you paid both of them. Sometimes motgage companies pay the Indiana popety tax fom an escow account. If you motgage company pays it, they should send you a Fom 1098 (o its equivalent) showing the amount of popety tax paid. If you can't locate the infomation, contact you local county teasue's office o you motgage company. Impotant: You must maintain copies of poof that you paid you Indiana popety tax as the Depatment can equie you to povide this infomation. This could include the Fom 1098, the popety tax statement fom you local assesso's office, cancelled checks, etc. Line 3 - State Tax Refund Repoted on Fedeal Retun If you epoted you state income tax efund as income on you fedeal etun, you should deduct it on you Indiana tax etun. This amount is shown on you fedeal income tax etun, Fom 1040, line 10, as Taxable efunds, cedits, o offsets of state and local income taxes. Since Indiana does not tax this income, if it was included as income on line 1 of the Fom IT-40, you should claim this amount as a deduction. Line 4 - Inteest on U.S. Govenment Obligations Deduction If the amount on line 1 of Fom IT-40 includes inteest income, you may be able to take a deduction. If any pat of you inteest income included on line 1 is fom a diect obligation of the U.S. Govenment, you can deduct these amounts. Examples of U.S. Govenment obligations include U.S. Savings Bonds, U.S. Teasuy Bills and U.S. Govenment Cetificates. This inteest is usually epoted on fedeal Schedule B. The potion of inteest income epoted fom a tust, estate, patneship o S copoation that is fom U.S. Govenment obligations is also deducted on this line. Lines 5 and 6 - Taxable Social Secuity and/o Tie 1 & 2 Raiload Retiement Benefits Deduction The income on line 1 of Fom IT-40 may include social secuity and/o tie 1 aiload etiement benefits (issued by the United States Raiload Retiement Boad) that ae taxable fo fedeal puposes. These amounts ae usually shown on the line indicated as "social secuity benefits" on fedeal Fom 1040, line 20b o Fom 1040A, line 13b. Indiana does not tax these types of income. Theefoe, ente on line 5 the amount epoted as being taxable on you fedeal income tax etun, Fom 1040, line 20b o Fom 1040A, line 13b. The income on line 1 of Fom IT-40 may include tie 2 aiload etiement benefits (issued by the United States Raiload Retiement Boad.) Indiana does not tax tie 2 aiload etiement benefits; theefoe, ente on line 6 any tie 2 benefits that ae included as taxable pensions and annuities on fedeal Fom 1040, line 16b o Fom 1040A, line 11b. Note: Do not ente any othe types of pension o etiement income on these lines. Ente only the amount of social secuity, tie 1 &/o tie 2 aiload etiement benefits (issued by the United States Raiload Retiement Boad) that ae taxed on you fedeal income tax etun. Line 7 - Militay Sevice Deduction If the income on line 1 of Fom IT-40 includes active o eseve militay pay eceived by you, you will be eligible to take a deduction (egadless of you age.) Also, if you ae etied fom the militay o the suviving spouse of a peson who was in the militay, and you included militay etiement income, you may be able to take this deduction if: a) you wee at least 60 yeas of age by Decembe 31, 1999; b) you wee eceiving militay etiement o suvivo s benefits in 1999; and c) the total benefits eceived as etiement income wee epoted on you fedeal etun. This deduction is equal to the actual amount of militay income eceived (i.e. militay pay, etiement pay, and/o suvivo s benefits) o $2,000, whicheve is less. If both you and you spouse eceived militay income, you may each claim the deduction fo a maximum of $4,000. Fo moe infomation about this deduction, contact the Depatment to get Income Tax Infomation Bulletins #6 and #27. Note: When cetain U.S. savings bonds ae edeemed to pay expenses fo highe education, the inteest may be excluded fom fedeal adjusted goss income. Theefoe, do not ente any inteest fom U.S. savings bonds that is shown on you fedeal Schedule B, line 3 (because it has aleady been excluded fom income). Fo moe infomation about this deduction, contact the Depatment to get Income Tax Infomation Bulletin #19. 11

11 Schedule 1: Deductions cont'd... Impotant: If you ae claiming this deduction you must attach you militay W-2 foms, etiement pay statement and/o suvivo s benefit statement to the tax etun. Note: If you eceived both militay pay and etiement pay o suvivo s benefits duing the tax yea, the total deduction cannot be geate than $2,000 pe qualifying peson. Fo example, if you eaned $3,000 in militay pay the fist half of the yea and $1,500 in etiement pay the second half of the yea, you can deduct only $2,000 of you income. Line 8 - Non-Indiana Locality Eanings Deduction If you eceived income subject to both Indiana state income tax and a local tax in anothe state, you may be allowed to deduct up to $2,000. Example: You eaned $8,000 in Smith City, Kentucky. You employe withheld a Smith City (local) tax fom you wages. Since you wages wee taxed by a non-indiana locality (Smith City), you ae eligible to take a $2,000 deduction. You may deduct the amount of you income taxed by a non-indiana locality o $2,000, whicheve is less. If you and you spouse both qualify, you may each claim the deduction fo a maximum of $4,000 (limited to no moe than $2,000 pe peson.) You must attach poof the tax was paid to a locality outside Indiana to be allowed this deduction. A W-2 fom is sufficient poof as long as the W-2 fom shows an amount and the non-indiana locality whee the tax was paid. The name of the locality is usually found in box 19, Locality Name, of the W-2 fom. A copy of a non- Indiana locality tax etun will also seve as poof of tax paid. Line 9 - Insulation Deduction If you installed new insulation, weathe stipping, double pane windows, stom doos o stom windows in you Indiana home duing 1999, you may be able to take the insulation deduction. To take the insulation deduction the following equiements must be met: a) the insulating items must have been installed in you pincipal place of esidence located in Indiana; b) the pat of you home whee the insulating items wee installed must have been built befoe Januay 1, 1996; c) the insulating items must be an upgade and not a eplacement o like-kind item (e.g., eplacing a double pane window with a new double pane window won t qualify, but eplacing a double pane window with a tiple pane window will qualify); and d) the deduction must be taken in the yea the insulating items wee installed. You ae allowed to deduct the actual cost of the qualifying items plus the amount paid fo labo up to a maximum of $1,000. (You cannot include the cost of labo that you did youself.) When claiming the deduction attach a sepaate sheet stating: the item puchased; the puchase pice; the place of puchase; the date of puchase; the date of installation; and the amount paid fo labo. Fo moe infomation about this deduction, contact the Depatment to get Income Tax Infomation Bulletin #43. Line 10 - Disability Retiement Deduction To take this deduction you must have: a) been pemanently and totally disabled at the time of etiement; b) etied on disability befoe Decembe 31, 1999; c) been unde the age of 65 at the end of 1999; and d) eceived disability etiement income duing If you meet these qualifications, you should complete Schedule IT and have it signed by you docto to claim this deduction. Fo moe infomation about this deduction, contact the Depatment to get Income Tax Infomation Bulletin #70 and Schedule IT This schedule must be attached to you tax etun when claiming this deduction. This deduction is limited to up to $5,200 pe qualifying individual. Note: Social secuity disability income does not qualify fo this deduction because Indiana does not tax this income. Line 11 - Civil Sevice Annuity Deduction If the income on line 1 of Fom IT-40 includes fedeal civil sevice annuity payments, you may be able to take a deduction if you wee at least 62 yeas of age by Decembe 31, To figue you deduction take the amount of annuity payments eceived o $2,000, whicheve is less, and subtact all social secuity and tie 1 and tie 2 aiload etiement benefits eceived. Fo example, if you civil sevice annuity fo 1999 was $6,000, and you eceived social secuity benefits of $1,200, you deduction would be figued in the following manne: Lesse of the amount of the annuity ($6000) o $ $2,000 Social secuity benefits ,200 Allowable deduction... $ 800 If you and you spouse both eceived annuities, you may each take this deduction fo a maximum of $4,000 ($2,000 apiece), poviding you both meet the age equiement. This deduction is available only to the annuitant and is not available to the annuitant s beneficiay. Fo moe infomation about this deduction, contact the Depatment to get Income Tax Infomation Bulletin #6. 12

12 Schedule 1: Deductions cont'd... Line 12 - Nontaxable Potion of Unemployment Compensation If you epoted unemployment compensation on you fedeal income tax etun, Foms 1040, line 19 o 1040A, line 12, then this amount is also included on line 1 of Fom IT-40. Indiana can diffe fom the fedeal govenment in detemining the taxable potion. You should use the woksheet at the bottom of this page to detemine you Indiana taxable unemployment income. If, afte completing the woksheet, thee is a diffeence between state and fedeal taxable unemployment compensation, ente the amount fom line 7 of the woksheet as a deduction. Line 13 - Indiana State Lottey Winnings If you win any pize money fom the Indiana Hoosie Lottey Commission, eithe by winning an instant game, a pull-tab game o an on-line game such as Lotto Cash o Hoosie Lottey Poweball, you must epot those winnings as income on you fedeal income tax etun. Howeve, Indiana does not tax winnings paid by the Hoosie Lottey Commission. Theefoe, if you epoted these winnings on you fedeal etun and they ae included on line 1 of Fom IT-40, ente this amount as a deduction. Note: Winnings fom othe state lotteies, Indiana pai-mutuel hose aces o out-of-state tacks, Indiana o out-of-state iveboats and othe gambling winnings ae taxable in Indiana and should not be deducted fom you taxable income. Line 14 - Indiana Net Opeating Loss Deduction You may take a deduction fo the Indiana potion of the total fedeal net opeating loss deduction you added back on line 3 of Fom IT-40. (This will be a net opeating loss deduction fom an ealie yea(s) caied fowad to 1999.) The amount you deduct will be stated as a positive figue. Attach the following copies to you state tax etun: a) fedeal Foms 1045 and 1045 Schedule A; o b) a detailed beakdown showing the fedeal loss calculation; and c) a completed Indiana Schedule IT-40NOL. Impotant: The deduction will be denied if these schedules ae not attached to you tax etun. Line 15 - Entepise Zone Employees Cetain aeas within Indiana have been designated as entepise zones. Entepise zones ae established to encouage investment and job gowth in distessed uban aeas. Entepise zones have been established in potions of the following cities: Andeson Fot Wayne Maion Bedfod Gay Michigan City Bloomington Gissom Aeoplex Muncie Connesville Hammond Richmond East Chicago Indiana Amy Ammo South Bend Elkhat Indianapolis Tee Haute Evansville Kokomo Fot Haison Lafayette If you lived in an entepize zone and woked fo a qualified employe* in that zone you may be able to take this deduction. You employe will povide you with Fom IT-40QEC if you e eligible to claim this deduction. The amount of the deduction is one-half ( 1 /2) of the eaned income shown on that fom o $7,500, whicheve is less. Fom IT-40QEC must be attached to the Fom IT-40. Fo additional infomation about this deduction, contact the Depatment fo Income Tax Infomation Bulletin #66. *A qualified employe cannot be a not-fo-pofit oganization, patneship, o S copoation. Unemployment Compensation Woksheet Note: If you wee maied but filing sepaately, and you lived with you spouse at any time duing 1999, ente -0- on line 3 of the woksheet. Howeve, if you wee maied but filing sepaately, and lived apat fom you spouse the entie yea, ente $12,000 on line 3.! 1. Unemployment compensation included on IT-40, line Fedeal adjusted goss income fom Fom 1040, line 33, Fom 1040A, line 18, o Fom 1040EZ, line 4 3. Ente $12,000 if single, o $18,000 if maied filing a joint etun Subtact line 3 fom line 2. If zeo o less, ente Ente one-half ( 1 /2) of the amount on line Taxable unemployment compensation fo Indiana puposes: ente the amount fom eithe line 1 o line 5, whicheve is smalle Subtact line 6 fom line 1. Cay this amount to Schedule 1, line

13 Schedule 1: Deductions cont'd... Line 16 - Recovey of Deductions If you did not complete the othe income line 21 on you fedeal Fom 1040, then do not complete this line. Indiana does not allow you to claim itemized deductions fom fedeal Schedule A. Howeve, if you epoted ecoveed itemized deductions as othe income on line 21 of you 1999 fedeal Fom 1040, use that amount as a deduction on this line. Line 17 - Human Sevices Tax Deduction You might be able to take the human sevices tax deduction if you lived in Indiana, and: a) eceived Medicaid payments; b) wee not living at home; and c) wee eceiving cae in a hospital, skilled nusing facility, o an intemediate cae facility. To detemine you deduction, equest Income Tax Infomation Bulletin #80. Line 18 - Othe Deductions If you take any of the following deductions make sue to list the type of deduction claimed and the amount being claimed. You employe will povide you with Fom IT-40QEC if you ae eligible to claim this deduction. The amount of the deduction is one-half (½) of the eaned income shown on that fom o $7,500, whicheve is less. Fom IT-40QEC must be attached to the Fom IT-40. Fo additional infomation about this deduction, contact you employe to see if you e woking in an established aipot development zone. Holocaust Victim's Settlement Payment Deduction In the case of an eligible individual, subtact the amount of a Holocaust victim's settlement payment included in the individual's fedeal adjusted goss income. An eligible individual is one who diectly eceived a settlement payment, o an hei of an individual who is eligible to eceive a settlement payment. Holocaust victim's settlement payment is a payment eceived: as a esult of the settlement action entitled "In e Holocaust Victim's Asset Litigation"; unde the Geman Act Regulating Unesolved Popety Claims; unde any foeign law poviding payment fo Holocaust claims; o as a esult of a settlement of any othe Holocaust claim, including insuance claims and claims elating to looted at, financial assistance o slave labo wages. You must attach a copy of you fedeal tax etun to veify the claimed deduction. Impotant: Do not claim itemized deductions fom fedeal Schedule A. Law Enfocement Rewad Deduction If you epoted an amount you eceived as a ewad as othe income on line 21 of you fedeal Fom 1040, you may be eligible fo this deduction. If you eceived a ewad fo poviding infomation to a law enfocement official o agency; if the infomation assisted in the aest, indictment, o the filing of chages against a peson; and if you ae not compensated fo investigating cimes, the peson convicted of the cime o the victim of the cime; then you can deduct the lesse of the amount eceived o $1,000. Medical Savings Account Deduction You may be eligible fo a deduction if you employe deposited funds in cetain medical cae savings accounts. If you eceived Fom IN-MSA fom the account povide you should deduct any medical withdawals and exempt inteest income epoted in Box 2 and/o Box 7. Note: You ae not eligible to claim this deduction if you also claimed a medical savings account deduction on fedeal Fom 1040, line 25. Make sue you attach Fom IN-MSA o you claimed deduction will be denied. Aipot Development Zone Deduction Cetain aeas within Indiana have been designated as aipot development zones. Cuently, zones ae established within the City of Gay. Aeas within the City of Tee Haute and Allen County ae also eligible to designate zones. If you lived in an aipot development zone and woked fo a qualified employe in that zone you may be able to take this deduction. Remembe you Sales and Use Tax obligation. See instuctions on page

14 Indiana Exemptions: Lines 8-11 Line 8 - Exemptions You ae allowed a $1,000 exemption on you Indiana tax etun fo each exemption you claim on you fedeal etun. Ente the total numbe of fedeal exemptions claimed in the space povided. Example - John and Lisa have a 12 yea old daughte named Saah. On John and Lisa's joint fedeal etun they claim themselves and Saah as exemptions fo a total of 3. They'll ente 3 in the box on line 8 fo a total of $3,000 exemptions. If you do not have to file a fedeal etun, you will need to complete a sample fedeal etun to see how many fedeal exemptions you ae allowed to claim. Impotant: If no exemption is claimed on you fedeal etun, you can still claim youself (even if you ae claimed on a paent s o guadian s etun) and any qualifying dependents on this etun. Line 10 - Age 65 o Olde o Blind If you and/o you spouse (if filing a joint etun) ae age 65 o olde, you (o both of you) can take an additional $1,000 exemption. If you and/o you spouse (if filing a joint etun) ae legally blind, you (o both of you) can take a $1,000 exemption. Mak the boxes applying to you and/o you spouse. Ente the total numbe of boxes maked on this line x $1,000. Line 11 - Additional Exemption fo Age 65 o Olde An additional $500 exemption is available fo you and/o you spouse if you ae age 65 o olde and the amount on line 1 (you fedeal adjusted goss income) is less than $40,000. Mak the boxes applying to you and/o you spouse. Ente the total numbe of boxes maked on this line x $500. County Tax: Schedule CT-40 Instuctions Line 9 - Additional Exemption fo Dependent Child An additional exemption, which has been inceased to $1,500, is allowed fo cetain dependent childen. Caefully ead the following Dependent Child Definition to see if you ae eligible to claim this additional exemption. Dependent Child Definition: Accoding to state statute, the dependent child must be a son, stepson, daughte, stepdaughte, and/o foste child who is you child (and/o you spouse's child if filing a joint etun). He/she must be eithe unde the age of 19 by Decembe 31, 1999, o be a full-time student who is unde the age of 24 by Decembe 31, If any dependent(s) you ae eligible to claim on you fedeal etun also meet the Dependent Child Definition above, ente that numbe in the box on line 9. Example - John and Lisa claimed thei 12 yea old daughte Saah as an exemption on thei fedeal etun. Since Saah is thei daughte, is unde the age of 19 and was claimed as an exemption on he paent's fedeal tax etun, John and Lisa will claim one (1) exemption on line 9 fo a total of $1,500. Note: Not all dependent childen eligible to be claimed as exemptions on the fedeal tax etun will be eligible fo this additional exemption. Fo instance, if you claimed a gandson o nephew as an exemption on you fedeal tax etun, you should also claim an exemption fo them on line 8. Howeve, since he doesn't meet the Dependent Child Definition above, you won't be able to claim the additional exemption on line 9. If, on Januay 1, 1999, you and you spouse (if filing a joint etun) lived and/o woked in an Indiana county that has a tax, you must complete Schedule CT-40 to figue you county tax. A county has a tax if it has tax ates next to its name on the chat on page 21. Note: If the county on the chat has the initials NA in the ate columns, it doesn t have a county tax. It is listed fo the 2-digit county code numbe only. When to attach the completed Schedule CT-40 to you state tax etun: You must attach Schedule CT-40 to you etun if, on Januay 1, 1999, you wee: Single o maied filing sepaately, you lived in a county not having a tax but woked in a county that does have a tax; Maied filing joint and each lived in diffeent counties; o Maied filing joint, you both lived in a county not having a tax but one o both of you woked in a county that does have a tax. Any othe filing situation is not equied to attach Schedule CT-40. Note: It's OK to attach the Schedule CT-40 to you tax etun even if it's not equied. Fo instance, if you need to attach Schedules 1 and 2, and the completed CT-40 is on the back of it, you may go ahead and send it in. 15

15 County Tax instuctions cont'd... County Whee You Lived Defined The county whee you lived is the county whee you maintained you home on Januay 1, If you had moe than one home in Indiana on this date, then you county of esidence as of Januay 1, 1999, was: a) whee you wee egisteed to vote. If this did not apply, then you county of esidence was: b) whee you pesonal automobile was egisteed. If this did not apply, then you county of esidence was: c) whee you spent the majoity of you time in Indiana duing If you moved to anothe Indiana county afte Januay 1, 1999, the county whee you lived fo tax puposes will not change until next yea. If, on Januay 1, 1999, you lived in a county having a tax, then you will owe county tax on all of you Indiana adjusted goss income. If, on Januay 1, 1999, you lived in a county having no tax, then county tax will be figued on you income fom you pincipal employment if the county whee you woked on Januay 1, 1999 has a tax (see definition below). County Whee You Woked Defined The county whee you woked (county of pincipal employment) is the county whee you main place of business was located o whee you main wok activity was pefomed on Januay 1, If you began woking in anothe county afte Januay 1, 1999, the county whee you woked fo tax puposes will not change until next yea. If you had moe than one job on Januay 1, 1999, you pincipal place of employment is the job whee you woked the most hous and eaned the most income. Example 1 - Jessie woked in Maion County on Januay 1, She quit that job and began a new one in Johnson County on Febuay 10, She will ente the Maion County 2-digit code (49) as the county whee she woked even though she changed jobs duing the yea. If, on Januay 1, 1999, you county of pincipal employment was not in Indiana, wite county code 00 (out-of-state) in the County Whee You Woked box. Exception: If you woked in any of the following states on Januay 1, 1999, ente thei 2-digit code numbe (instead of 00): State Use Code # Illinois Kentucky Michigan Ohio Pennsylvania Wisconsin Pincipal Employment Income You must figue you pincipal employment income only if, on Januay 1, 1999, you lived in a county not having a tax but woked in a county that did have a tax. You pincipal employment income is income you eaned fom you main wok activity (job) fo the entie yea. See instuctions fo Section 2, line 1 on page 17 fo moe infomation. Militay Pesonnel If you wee stationed in Indiana, you county of esidence is the county whee you lived on Januay 1 of the yea you enteed the militay sevice. If, on Januay 1, 1999, you wee stationed outside of Indiana and you family was with you, wite county code 00 (out-of-state) in all the county boxes (you won t owe a county tax.) If, howeve, you maintained you home in an Indiana county and/o you spouse and a family wee still living in an Indiana county on Januay 1, 1999, you ae consideed to be a esident of that county and will be subject to county tax. Retied Pesons, Homemakes o Unemployed If you wee etied, a homemake, o wee unemployed by Januay 1, 1999, put you county of esidence 2-digit code numbe in both the Indiana County Whee You Lived and Indiana County Whee You Woked boxes. Do not wite the wod Retied, "Homemake", o "Unemployed" ove the boxes. Special Note to Maied Taxpayes Filing a Joint Retun If you lived in diffeent counties on Januay 1, 1999, both of you need to figue you county tax sepaately on Section 1. If both of you lived in a county on Januay 1, 1999, that had no tax but woked in a county that did have a tax, you must figue you tax sepaately on Section 2. If only one of you is subject to county tax, then you may use all of the exemptions fom Fom IT-40, line 12, except fo you spouse s, to figue you tax. See the Index on page 39 fo help in locating infomation by topic. 16

16 County Tax instuctions cont'd... County Tax Schedule CT-40 Section 1: Line-by-line Instuctions Line 2 If you claimed a non-indiana locality eanings deduction on Schedule 1, line 7, ente that amount on this line in Column A. If you ae completing Column B instead, and you spouse is the one taking this deduction, then ente it in Column B. Whee Did You Live? Did you live in a county on Januay 1, 1999, that has a tax? If yes, complete Section 1 fo youself, and skip Section 2. If you answe is no, skip Section 1 and go to Section 2: Line-By- Line Instuctions. Did you spouse live in a county on Januay 1, 1999, that has a tax? If yes, complete Section 1 fo you spouse, and skip Section 2. If you answe is no, skip Section 1 and go to Section 2: Line-By-Line Instuctions. Line 1 If you ae filing a single etun o ae maied filing sepaately, ente in Column A the state taxable income fom line 13 of Fom IT-40. If you ae filing a joint etun and you both lived in the same county on Januay 1, 1999, ente in Column A the state taxable income fom line 13 of Fom IT-40. Leave Column B blank. Example 2 - On Januay 1, 1999, Jack and Diane lived in the same county that has a tax. They ll ente thei Fom IT-40, line 13 combined state taxable income in Column A. If you ae filing a joint etun and you and you spouse lived in diffeent counties on Januay 1, 1999, ente each peson's shae of state taxable income fom Fom IT-40, line 13, in the appopiate columns. Example 3 - Simon and Tina maied in 1999 and ae filing a joint etun. On Januay 1, 1999, Simon lived in Geene County and Tina lived in Clay County. Thei Fom IT-40 line 13 income of $36,300 includes the following beakdown: Simon: $ 20,000 wages (1/2 joint inteest income) - 1,000 exemption $ 19,150 income fo CT-40 Section 1, line 1 Column A Tina: $ 18,000 wages (1/2 joint inteest income) - 1,000 exemption $ 17,150 income fo CT-40 Section 1, line 1 Column B Example 4 - The cicumstances ae the same as Example 3 except Tina lived in Sullivan County, which does not have a county tax. Simon would still ente his $19,150 shae of the Fom IT-40 line 13 amount on CT-40 Section 1, line 1 Column A. Howeve, Column B will be left blank since Tina won't owe a county tax. Line 4 Find you county on the County Income Tax Chat on page 21. Find the ate fom the Resident Rate column and ente it hee. Fo example, if you county is Elkhat, ente Line 5 Multiply you line 3 adjusted income by the line 4 county tax ate. Line 6 Add the amounts fom line 5, Columns A and B. If you wee a Pey County esident and woked in the Kentucky counties of Beckinidge, Hancock o Meade, complete lines 7 and 8. Othewise, ente the total hee and on line 9. Line 7 Ente hee the amount of income taxed by any of the Kentucky counties listed on line 6. Line 8 Multiply the amount on line 7 by.005 and ente the total hee. If thee is no amount on line 7, skip this line and go to line 9. Line 9 Subtact the amount on line 8 fom the amount on line 6. Ente that amount hee o, if thee wee no enties on those lines, ente the amount fom line 6. Also ente this amount on you IT-40, line 15. County Tax Schedule CT-40 Section 2: Line-by-line Instuctions Complete Section 2 if, on Januay 1, 1999: you wee a esident of a county not having a county tax, but you woked in a county that does have a county tax. Line 1 Ente you pincipal employment income fo the yea. This includes income fom wages, tips, salaies and commissions, net self-employment income fom fedeal Schedule C/C-EZ and/o net fam income fom fedeal Schedule F. Do not include passive souce income like nonbusiness inteest and dividends, pensions, capital gains, fam ental, etc. Also, do not include income fom a pat-time job. 17

17 County Tax instuctions cont'd... Example 5 - Duing 1999 Jake eceived income fom the following souces: $15,000 fom his full-time job; $1,850 fom his pat-time job; $50 nonbusiness inteest income; and $800 pension income. The pincipal employment income he will ente on line 1 is $15,000. If you had moe than one job at diffeent times duing the yea (not including pat-time employment), add the income fom those jobs and ente hee. * The moving expense deduction will be allowed only to the extent that the income eaned fom that move is being taxed on Section 2, line 1. Example 10 - Tim and Jane file a joint tax etun and live in a county that does not have a tax. Jane does not owe county tax, but Tim does because his business is in a county having a tax. She has a $21,000 wage income and a $1,400 moving expense. Tim has $23,000 net income fom his photogaphy shop and claimed a $700 self employed SEP deduction. He'll ente his $23,000 income on line 1 of Section 2 and the $700 SEP deduction on line 2 of Section 2. He's not eligible to take the moving expense deduction because the wage income that it is in elation to is not being taxed fo county tax puposes. Example 6 - Duing 1999, Saah eaned $7,000 fom he job, which she woked fom Januay 1 though Apil 30. She began he new job on May 14 and woked though yea s end, eaning $11,000. She should ente the $18,000 combined amount hee. If you woked two o moe jobs at the same time, ente the potion you eaned fom you main job. Example 7 - Daniel had two jobs at the same time. On Job #1 he woked 30 hous a week and eaned $270 a week. On Job # 2 he woked 10 hous a week and eaned $80 a week. Daniel should ente the amount he eaned fom Job #1 as his pincipal employment income. Line 2 You may use cetain deductions to lowe the amount of income to be taxed. These deductions must have been claimed on you fedeal tax etun and/o on Indiana Schedule 1, and must have a diect elationship to the income being taxed on line 1. Example 8 - Ann's only income was $21,000 in wage income, which she epoted on line 1. She claimed a $2,000 IRA deduction on he fedeal Fom She should claim the $2,000 IRA deduction on this line. Example 9 - Mogan lived and woked in an entepise zone and is enteing he $17,000 wage income fom that zone on line 1. She claimed a $7,500 entepise zone deduction on Indiana Schedule 1, line 15. She should claim that $7,500 deduction on line 2. Line 4 If you ae filing a single o maied filing sepaately tax etun ente you total exemptions fom Fom IT-40, line 12. If you ae filing a joint tax etun, ente you exemption(s) (pesonal, ove 65 and/o blind) included on Fom IT-40, line 12. Note: You cannot claim you spouse's exemption. Exemptions fo dependents can be claimed by eithe spouse, as long as the total of line 4, Columns A and B is not geate than line 12 on the Fom IT-40. Example 11 - On Januay 1, 1999, Jack and Sue lived in a county not having a tax. Jack woked in a county that did have a tax. They claimed $4,500 in total exemptions ($1,000 each plus $1,000 plus $1,500 fo thei dependent child) on thei tax etun. Jack is allowed to use $3,500, o all of the total exemptions except fo Sue s pesonal exemption. Line 6 Find you county on the County Income Tax Chat on page 21. Find the ate fom the Nonesident Rate column (the second column of ates ove) and ente it hee. Fo example, if you county is Elkhat, ente.005. Line 8 Add the amounts fom line 7, columns A and B. Ente the total hee and on line 15 of the IT-40. Note: If you have figued a tax in Section 1 and Section 2, add amounts fom Section 1, line 9 and Section 2, line 8 and ente on fom IT-40, line 15. These deductions ae limited to the following: payments made to IRA accounts o self-employed etiement plans; medical savings account deduction; moving expense deduction*; self employment tax deduction; Keogh, self-employed SEP and SIMPLE plans; active militay pay deduction and entepise zone deduction. 18

18 IT-40 line-by-line instuctions continued... Fo moe infomation on Who Is A Household Employee?, it is ecommended that you get Fedeal Publication 926, Household Employe s Tax Guide, by calling the IRS at Line 16 - Use Tax Due on Out-of-State Puchases If, while a esident of Indiana, you made puchases outside Indiana by mail ode, though adio o television advetising, ove the Intenet, o diectly fom an out-of-state company, those puchases may be subject to Indiana sales and use tax if sales tax was not paid at the time of puchase. This tax, called use tax, is figued by multiplying 5% (.05) times the total puchases. When you make puchases fom a company in Indiana, that company is esponsible fo collecting the Indiana sales tax fom you. When you make puchases fom an out-of-state company, YOU ae esponsible fo making sue the use tax is paid. Eithe the out-of-state company collects the tax fom you o you must pay the tax diectly to the State of Indiana. To figue you tax you should complete the woksheet at the bottom of this page. If you did pay sales tax to the state whee the item was oiginally puchased you ae allowed a cedit against you Indiana use tax fo an amount up to 5%. Note: Do not include the following items on the woksheet: automobiles, watecaft, aicaft, and tailes. A cedit fo taxes peviously paid is not allowed fo these items that ae equied to be titled, egisteed o licensed in Indiana. Fo moe infomation egading use tax call (317) Line 17 - Household Employment Taxes If you paid cash wages duing 1999 to an individual who is not: a) you spouse; b) you child unde age 21; c) you paent; o d) an employee unde age 18; and e) they woked in and aound you home as a baby-sitte, nanny, health aide, pivate nuse, maid, caetake, yad woke o someone who does simila domestic duties, then they may be you employee. If you paid cash wages ove $1,000 to a household woke who is you employee, you may have needed to have withheld state and county income taxes. If you want to pay these taxes on you Indiana income tax etun, contact the Depatment fo Schedule IN-H. Indiana Cedits Lines 19 and 20 - Indiana State and County Tax Withheld The amount of state tax withheld is usually shown on box 18 and the amount of county tax withheld is usually shown on box 21 of the W- 2s. You must attach you W-2s, WH-18s and/o Fom 1099s to you tax etun to veify the amount withheld. If you had moe than one job, a W-2 fom fo each job must be attached to the tax etun so you can get cedit fo all Indiana state and county tax withheld. If you had Indiana state tax and/o county tax withheld on any othe fedeal foms, such as a W-2G o 1099R, you must attach them to the tax etun to get cedit fo the amount withheld. If you ae filing a joint etun, be sue to include you spouse s W- 2s, WH-18s and/o Fom 1099s if they show Indiana state and/o county withholding amounts. Use of substitute W-2s might delay the pocessing of you etun and/o efund. Don t claim cedit fo taxes withheld fo states othe than Indiana o fo localities outside Indiana. Sales/Use Tax Woksheet List all puchases of popety fom out-of-state souces.! Desciption of Pesonal Popety Puchased Date of Puchase Puchase Pice of Popety 1. Total puchase pice of popety subject to the sales/use tax Sales/use tax: Multiply line 1 by.05 (5%) Sales tax peviously paid on the above items (up to 5% pe item) Total amount due: Subtact line 3 fom line 2. Cay to Fom IT-40, line 16. If the amount is negative, ente zeo and put no enty on line 16 of the IT

19 Indiana Cedits cont'd... Line Estimated Tax Paid If you made estimated tax payments fo state and/o county tax, ente the total paid fo 1999 on this line. Also include any payments made with Fom IT-9 Extension of Time to File fo tax yea Note: Do not include on this line any estimated tax paid fo tax yea Table A Joint Files Both Age 65 o Olde If the income on Line 1 of You Allowable Fom IT-40 is: Cedit* is: less than $1, $140 between $1,000 and $2, $90 between $3,000 and $9, $80 Line 22 - Unified Tax Cedit fo the Eldely You may be able to claim a cedit if you o you spouse meet all the following equiements: a) you and/o you spouse must have been age 65 o olde by Decembe 31, 1999; b) if maied and living togethe at any time duing the yea, you must file a joint etun; c) the amount on line 1 of Fom IT-40 must be less than $10,000; d) you must have been a esident of Indiana fo six months o moe duing 1999; and e) you must not have been in pison fo 180 days o moe in Disabled pesons unde age 65 do not qualify fo this cedit. Impotant: If a spouse dies afte Januay 1, 1999, the suviving spouse can claim this cedit by filing joint. A copy of the death cetificate must be attached to the tax etun to veify the date of death. If a taxpaye dies and does not have a suviving spouse, then an estate executo o an administato of the estate cannot claim the cedit on behalf of the deceased taxpaye. If you meet the equiements fo claiming the Unified Tax Cedit fo the Eldely, but don t have any income to epot on line 1 of Fom IT-40, o the income epoted on line 1 is less than the Total Exemptions on Fom IT-40 line 12, you have the option to file Fom SC-40 Unified Tax Cedit fo the Eldely. If you do file Fom SC- 40 then do not also file the Fom IT-40. Contact the Depatment to get Fom SC-40. You can claim the cedit on eithe Fom IT-40 o Fom SC-40, but file only one of these foms, and only file once. The deadline fo claiming this cedit is June 30, The only exception to this ule is if you have a valid extension to file you tax etun. In this case, you due date is eithe you extension date o June 30, whicheve is late. To figue you Unified Tax Cedit fo the Eldely: Use Table A if: You meet all the equiements noted above, and you ae filing a joint etun, lived with you spouse duing 1999 and both of you wee age 65 o olde by Decembe 31, 1999; o both you and you spouse met all the equiements, and you spouse died afte Januay 1, Use Table B if: You meet all the equiements noted above, and you ae age 65 o olde and ae single o widowed; you ae filing a joint etun and only one of you is age 65 o olde; o you ae maied but did not live with you spouse duing 1999, ae age 65 o olde and ae maied filing sepaately. Table B Only One Peson Age 65 o Olde If the income on Line 1 of You Allowable Fom IT-40 is: Cedit* is: less than $1,000...$100 between $1,000 and $2,999...$50 between $3,000 and $9,999...$40 * Once you have located the allowable cedit on Table A o Table B, ente that amount on line 22. Line 23 - Indiana's Eaned Income Cedit: Schedule IN-EIC You may be eligible to claim Indiana s Eaned Income Cedit if you meet all of the following equiements. You have at least one qualifying child*, You qualifying child lived with you in the United States fo moe than half of 1999,** You total income is less than $12,000, At least 80% of you total income is eaned income, and If you ae a full-yea Indiana esident o a pat-yea/full-yea nonesident of Indiana, you must have taxable income fom Indiana souces (you must have an enty on line 1 of Fom IT-40). *Unlike the fedeal eaned income cedit, you must have a qualifying child to be eligible to claim this cedit. ** See Militay pesonnel stationed outside the United States on page Indiana eaned income cedit instuctions continue on page 22

20 Rev. 9/ Indiana County Income Tax Rates and County Codes *These ates have changed fom last yea s chat. County County Resident Nonesident Code Name Rate Rate 01 Adams Allen.01*.0055* 03 Batholomew Benton Blackfod Boone Bown Caoll Cass Clak NA NA 11 Clay Clinton Cawfod Daviess Deabon Decatu DeKalb Delawae Dubois Elkhat Fayette Floyd Fountain Fanklin Fulton Gibson Gant Geene Hamilton Hancock.01075*.00325* 31 Haison Hendicks Heny Howad Huntington Jackson.0135*.005* 37 Jaspe Jay Jeffeson NA NA 40 Jennings Johnson Knox.0025*.0025* 43 Kosciusko LaGange Lake NA NA 46 LaPote Lawence Madison.0085* * 49 Maion Mashall Matin County County Resident Nonesident Code Name Rate Rate 52 Miami Monoe Montgomey Mogan Newton Noble Ohio Oange Owen.0125*.005* 61 Pake Pey Pike Pote NA NA 65 Posey NA NA 66 Pulaski.0155* Putnam Randolph Ripley Rush St. Joseph.0055* * 72 Scott Shelby Spence Stake.006*.0035* 76 Steuben Sullivan NA NA 78 Switzeland.0085* * 79 Tippecanoe.01*.0055* 80 Tipton Union Vandebugh Vemillion Vigo NA NA 85 Wabash Waen Waick Washington Wayne Wells White Whitley All Othe States except the following: 94 Illinois 95 Kentucky 96 Michigan 97 Ohio 98 Pennsylvania 99 Wisconsin 21