INDIANAPOLIS — Today, the Indiana Department of Revenue (DOR) issued additional guidance for Hoosier taxpayers who received unemployment compensation in 2020 and have already filed their state income tax returns.
Those customers who used a tax preparation software product, online services or a paid tax professional to prepare their tax return should check for information from their software product vendor or preparer regarding software updates and how the required addback of unemployment income that was excluded from their federal adjusted gross income was handled.
Many tax preparation software products were updated to perform the appropriate addback of unemployment income. In cases where the addback of this Indiana taxable income was not accommodated, DOR will automatically perform the following review, without requiring any additional action by Indiana taxpayers:
- Review tax returns to determine the taxable amount of unemployment compensation for Indiana;
- Make any necessary corrections to those returns;
- If any additional amount is due, issue a bill for that amount in June; and
- Waive any potential penalty associated with unemployment income adjustment if the bill is paid in full in a timely manner.
“Our team has done their very best to find efficient methods to handle this very complex, and late-arriving, adjustment.” said DOR Commissioner Bob Grennes. “With a commitment to serving Hoosiers, we are making as many corrections automatically as possible and waving penalties associated with those adjustments.”
Customers should refer to DOR’s website for additional details and instructions regarding unemployment compensation income and any other questions related to 2020 income tax filing. Visit dor.in.gov and click on the “Learn More” button under “Unemployment Benefits and Taxes”.