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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndiana taxpayers will get a $125 refund after they pay their 2021 state income taxes, the governor’s office announced Wednesday afternoon.
The size of the state surplus has triggered Indiana’s automatic tax-refund law, with an estimated $545 million being divided evenly among taxpayers.
The state estimated 4.3 million taxpayers will receive the $125 refund.
“Despite a pandemic, Indiana exceeded all expectations and closed the state fiscal year with an unprecedented amount in reserves,” said Gov. Eric Holcomb in a written statement. “We have an obligation to put this money back in the hands of taxpayers instead of leaving it in the hands of government.”
The governor’s office said Holcomb is working with leaders of the General Assembly on legislation that will streamline the process and make an additional 910,000 taxpayers eligible for the credit.
State government saw overall tax revenue grow 14% during the last budget year as collections bounced back stronger than expected from the COVID-19 pandemic recession, pushing its cash reserves to $3.9 billion as of June 30. Tax revenue kept growing, with the state collecting about $560 million, or 10% more than expected during the four-month span through October.
The typical taxpayer liability is about $1,000, meaning the $125 refund represents a 12%-13% one-time tax cut.
The Department of Revenue will begin processing payments for taxpayers after legislation is passed. Officials expect the department to complete refunds for taxpayers by May 1 for those who file by the April 18, 2022, filing deadline.
Taxpayers who applied for an extension will receive their payments after filing their return.
State tax collections have continued to be better than anticipated since July, leading to talk within the Republican-dominated Legislature of cutting taxes, although some are urging caution.
House Republican leaders have said they were looking at plans to cut the state’s 3.23% individual income tax rate or expand credits to reduce what income taxes are owed.
Tax revenue has kept growing, with tax collections running $645 million, or 9.6%, ahead of projections for the first five months of the current budget year.
House Republican Caucus Chairman Greg Steuerwald of Avon said Wednesday that tax cuts will get a “hard look” during the legislative session that starts in January.
“It’s timely to take a look at it and see if there’s something that makes sense,” Steuerwald said. “But once again being very careful what we do.”
Top Republicans in the state Senate, however, have been hesitant on the tax cut question. Much of Indiana’s revenue growth has come from a nearly 12% increase from last year in sales tax collections, which make up about half of state government’s general revenue, and some Senate Republicans warn that no one can reliably predict what will happen with those collections when federal relief spending ends.
Senate Appropriations Committee Chairman Ryan Misher said he worries about the long-term health of the national economy and that it would be better to wait on tax changes until the Legislature takes up a new two-year state budget during its 2023 session.
“This is a nonbudget year, so we’ve got a year to discuss these cuts,” said Mishler, a Republican from Bremen.
Holcomb was noncommittal when asked whether he believed now was the time for new tax cuts.
“We’re entertaining more,” Holcomb said. “But we’ll see what the House and the Senate have to say about that as well.”
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Wonderful. Thank you!
Divided evenly, without regard to how much a taxpayer paid in? Who knew the Republican legislators were really socialists?
Divided equally is actually better for the lower end taxpayers. If don proportionally, the lower socio-economic people would get less and the higher taxpayers would get more, even though they don’t need it. Chalk on up for the little guy!
The Governor might have an R behind his name but he isn’t a Republican!
$125 per individual or $125 per tax return? (If husband and wife file jointly, will they receive $125 or $250?)
I had the same question.
I’m rich $$$$$$$$. Could you imagine if this money went back into Indiana Education? Half for schools half for colleges and universities??
It’s nice to get $125 but I would’ve spent the money on the horrible roads and college grants.
+1
Ditto
You will spend the money fixing your car as it’s torn apart on the horrible roads.
Feel free to endorse the check and make it payable to Indiana Dept. of Revenue and send it back if that’s how you feel, Mark. For the time, it’s a free country to do so.
It is going to cost the state more than that to issue the refunds.
They subtract tax owed because so many companies don’t take out for county/local taxes.
How about education?
Roads?
Divided by taxpayers with a gross income of $25,000 or less. For many taxpayers $125 is nothing. Help people who need help
Ditto.
I believe in balanced budgets and planning for rainy days, but when we hear spending on education is notably lower than it was 20 years ago, and we hear that we can’t afford to maintain roads, and we hear that schools can’t afford to pay enough to keep subs and bus drivers, it really seems like there is a disconnect somewhere. Maybe we should vote a few financial people into office instead of professional politicians.
I agree. The problem is the state has excess, but the local government is short for education and roads, and the state has capped the ability of the local government to increase.
The disconnect might be things like road funding formulas that pay the same amount of money for a two-lane county road as they do for big, multiple lane roads in Indianapolis.
Indianapolis and Marion County are donors to the rest of the state of Indiana. The donut counties will be in the same situation once their shiny new infrastructure wears off.
The Indiana Legislature has absolutely no motivation to fix it and never will as the recipients in this situation.
Now I can fill up my car with gas. Thanks
Go to Sam’s club
Really i want my fair share! Especially based on what I paid in. And not freeloaders taking in what they didn’t pay in.
Clean and fix our roads Indianapolis has the filthy dirty trashy roads around Tri state area Buy some street sweepers for the highway’s like Detroit uses.