Form It-40 - Indiana Full-Year Resident Individual Income Tax Booklet

Line 8 – Non-Indiana locality earnings deduction

You are allowed to deduct the actual cost of the qualifying items,

including labor, up to a maximum of $1,000.

You may be allowed a deduction if you have income being taxed by a

locality (local governmental unit) located in another state. A “locality”

Important. When claiming this deduction, maintain with your re-

could be a city, county, parish, etc.

cords the following information (as the department can require you to

provide this information at a later date):

Example. You earned wages in Louisville, KY. Your employer withheld

•

Item(s) purchased

a Louisville city (locality) tax. Since your wages were taxed by a non-

•

Purchase price

Indiana locality (Louisville), you are eligible to take a deduction.

•

Place of purchase

•

Date of purchase

The deduction is limited. You may deduct the amount of your income

•

Date of installation

that was taxed by a non-Indiana locality or $2,000, whichever is less. If

•

Amount paid for labor (you cannot include the cost of labor that

you and your spouse both qualify, you may each claim the deduction

you did yourself)

for a maximum of $4,000 (limited to no more than $2,000 per person).

For more information about this deduction see Income Tax Informa-

You must enclose proof that the tax was paid to a locality outside

tion Bulletin #43 at

Indiana to be allowed this deduction. A W-2 form is proof as long as

the W-2 form shows a withholding amount and the name of the non-

Line 10 – Nontaxable portion of unemployment

Indiana locality where the tax was paid. The name of the locality is

usually found in box 20, Locality Name, on the W-2 form. A copy of a

compensation

non-Indiana locality tax return will also serve as proof of tax paid.

You may be eligible for a deduction if you reported unemployment

compensation on your federal income tax return. Complete the

For more information see Income Tax Information Bulletin #28 at

worksheet below to see if you are eligible. Make sure to enclose your

1099G(s) if you claim the deduction.

Line 9 – Insulation deduction

Important. Do not include any unemployment compensation issued

You may be able to take this deduction if you installed new insulation

by the U.S. Railroad Retirement Board on line 2 of the worksheet. In-

in your Indiana home during 2013. Insulation includes weather strip-

stead, see the instructions for the Railroad unemployment and sickness

ping, double pane windows, storm doors and storm windows.

benefits deduction on page 25 for more information.

To take this deduction the following requirements must be met:

Line 11 – Other deductions

•

The insulating items must have been installed in your principal

Each of the following deductions has been assigned a three-digit code

place of residence located in Indiana,

number. When claiming the deduction on Schedule 2 under line 11,

•

The part of your home where the insulating items were installed

write the name of the deduction, the three-digit code number and the

must have been built before Jan. 1, 2010,

amount claimed.

•

The insulating items must be an upgrade and not a replacement or

like-kind item (e.g., replacing a double pane window with a new

Example. Enter the following information on line 11a to claim a $130

double pane window won’t qualify, but replacing a double pane

civil service annuity deduction and on 11b to claim a $5,200 NOL

window with a triple pane window will qualify), and

deduction:

•

The deduction must be taken in the year the insulating items were

installed.

11a. Civil Service Annuity

601

11a

130

b. Indiana Net Operating Loss

607

11b

5200

Unemployment Compensation Worksheet

Note: If you were married but filing separately, and you lived with your spouse at any time during 2013, enter -0- on line 3 of the worksheet.

However, if you were married but filing separately, and lived apart from your spouse the entire year, enter $12,000 on line 3.

Unemployment compensation included on IT-40, line 1..............................................................................

Federal adjusted gross income from Form 1040 (line 37), Form 1040A (line 21), or Form 1040EZ (line 4)

Enter $12,000 if single, or $18,000 if married filing a joint return ................................................................

Subtract line 3 from line 2. If zero or less, enter -0- ....................................................................................

Enter one-half of the amount on line 4 (divide line 4 by the number 2) ......................................................

Taxable unemployment compensation for Indiana purposes: enter the amount from either line 1

or line 5, whichever is smaller .....................................................................................................................

Subtract line 6 from line 1. Carry this amount to Schedule 2, line 10 .........................................................

Page 21

IT-40 Booklet 2013

Form It-40 - Indiana Full-Year Resident Individual Income Tax Booklet - 2013 Page 21

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