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Indiana taxpayers to see $111 credit from surplus

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Indiana taxpayers will receive a $111 credit on their state income tax returns next year as the state distributes part of its budget surplus under a refund plan that Gov. Mitch Daniels pushed through the state Legislature.

Daniels announced Wednesday that the credit that will be $222 for couples filing joint returns after the state wrapped up its budget year in June with reserves reaching about $2.1 billion.

About $360 million will go toward the tax credits, with another $360 million to the state's pension liabilities for teachers and many state employees, according to the governor's office.

The tax credit will come off of what Hoosiers owe on their 2012 state tax returns, which the governor's office said typically averages about $850 for each taxpayer.

Daniels said some 335,000 people are expected to receive state tax refunds next year than would have without the plan to return the state surplus.

"We thought a tax refund would be more meaningful for low-income to moderate-income people," Daniels said.

Critics argue that Daniels created the reserves — amounting to about 15 percent of the state's budget — by cutting millions of dollars in funding for public schools, the child welfare agency and other important services.

House Minority Leader Scott Pelath, D-Michigan City, said the money going to what he called a modest tax refund could better be spent investing in better roads, infrastructure and health care around the state.

"While a saccharin tax refund is nice, it's not what's going to move Indiana forward," Pelath said.

The state's cash reserves accrued because of three major factors: improved tax collections by the state as it continues to crawl out of the recession, a series of cuts to state agencies made over the last few years and a tax error resulting in the state discovering $320 million in a tax-collection account.

The tax credit kicked in because the state's reserves topped 10 percent of its planned spending for the year. But state lawmakers earlier this year increased that trigger to 12.5 percent of state spending for future refunds.

"Better that these dollars remain in the pocket of the people who earned them than burn a hole in the pocket of government," Daniels said.

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  • Indiana pays to punish out of state drunk
    In 1997, while riding through the backwoods of Indiana, a 20 year old Tennessee boy was pulled over by the Boone County Sheriff’s department and arrested for an OWI without bodily injury. Miles away from home, he faced and lost a Jury Trial and was sentenced to 3 years suspended and placed on probation. Upon his release, he returned home rather than living on the streets in Indiana. Fast forward 3 years and in 2000 the boy was again arrested for DUI in Tennessee and waited extradition to Indiana for his violation of probation warrant. Indiana failed to extradite. 10 years later, in the spring of 2010, he was again arrested for a DUI and served out his time in a Tennessee County jail, upon his release he was extradited to Indiana. His probation was revoked and he was sentenced to serve out the remainder of his sentence in an Indiana IDOC facility. After serving 14 months and attending 2 IDOC programs, he was paroled on Interstate Compact and was allowed to return to his home state of Tennessee in August 2011. In the fall of 2011 he was again arrested for a DUI and after serving a year in a Tennessee County jail he was once again extradited to Indiana. His parole was revoked, October 2013 and was sentenced to the remainder of his 3 year sentence. To date, the indigent inmate has cost the taxpayers of Indiana, $48,634 for housing, $3400 in pauper based court motions and lawyer fees, $1200 in an appeals case, $1800 in extradition costs, $2100 in IDOC program fees and plans, probation and parole costs, and plans to further incur taxpayers paying for additional filing of further motions both in the State and Supreme Courts. The now 36 year old inmate, IDOC #223275 sits in the Putnamville Correctional Facility to wait out his time until he is again released in May 2014. Does incarceration have any impact on the root cause of his alcohol addiction? Do Indiana taxpayers not mind that this inmate has racked up to date $57,134? For the amount the taxpayers have paid to “punish” this inmate, the citizens of Indiana, not Tennessee, could have used that money to fund 78 after school programs for High Risk students or 28 new playgrounds. To put this in perspective, there are approximately 7 low medium security prisons in Indiana. Over a half of the population are serving out Felony D sentences. Out of 27,000 inmates housed in Indiana Prisons, 15,000 are serving out Felony D sentences. The total cost to house these inmates per year comes to $308,461,500 or 15,423 new school playgrounds or the ability to provide 421,395 high school students with after school programs. During sentencing of our Tennessee boy, Judge McClure, Boone County Superior Court II stated in transcript during sentencing “I’m not concerned about the taxpayer’s money…” are you?
  • can't fix stupid
    you don't get this refund if your 2011 tax return was one day late - even if you owed nothing. Who's idea was that? nonsense!!
  • NEGATIVE COMMENTS
    First off, if it was a democrate gov you would be singing praises, in fact if it was a democrate gov, I doubt you would receive this auto refund. Just petty complainers posting. High five Mitch. Remember can't make dems happy Best wishes in your new career.
  • which line does it go on
    Can anyone tell me which line you would put this credit on...on the IN tax forms?
  • Which Line to put credit on
    Can someone tell me which line on the IN Tax forms you would add this $222 - Joint tax credit?
  • manual edit for the credit
    I am betting that whoever did the return did not explore the Automatic Taxpayer Refund credit. On many programs you had to be aware of it and edit it yourself. Not like other credits that the software automatically looks for. The only other reason would have been she did not file taxes last year at all or if she did not by the deadline. Otherwise, all taxpayers were entitled to it.
  • State Surplus
    Does anyone know why a person wouldn't be eligible for this? We did my grandma's taxes and she didn't get it.
    • Take Your $111
      Yes the government over taxed us as usual. But guess what we are getting $111.... Yes the way it works doesn't make sense how we all just get $111 but guess what I can use the extra $111 right now. I can use it for credit card debt, home repairs, paying down the mortgage, or maybe just take the wife out for a needed night away from home. The government will continue to tax and overtax but in the grand scheme of things our state actually has a surplus which is a good thing. We could live across the boarder in Illinois and be way in the hole. I say lets stop wasting our breath with how the system should work when they don't care what you think anyway. Just be glad we are getting an extra hundred bucks which I am sure some of the readers on this post can really use. God Bless the United States Of America!
    • OUR MONEY
      We are overtaxed and now Mitch gets to decide who gets our money that he should not have to begin with. We are overtaxed THANKS MITCH
    • KEEPIN IT REAL!
      Crooks in state government. The refund like Hoops1012 said she be a percentage of what you paid in for all these years that Mitch and his cronies failed to properly account for receipts. So accumulate all receipts for the years we ran an outrageous SURPLUS. Place in the numerator the taxpayers accumulated contribution (I.e. tax payment) then refund the money pro-rata. This is a basic business concept taught at every university in the state (including Purdue).
    • Energy Development
      I'd rather the State combine the $360M allocation for tax credits with a reappropriation of subsidy funding for wind/solar/non-baseload energy and put it all into an R&D fund in support of a Liquid Floride Thorium Reactor project to clear any hurdles to getting the first modern MSR power plant in the US. Clean, Safe, cheap power for generations using domestic fuel resources.
    • State Tax Refund
      The State can't refund tax money correctly. The credit should be for a percentage of the amount that you paid for 2011, not a flat amount for each taxpayer.
    • Why
      So it's more important to use the surplus to buy future votes than to use it to fix roads and infrastructure.

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