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Category: Indiana

Indiana Homeowner's Residential Property Tax Deduction

You may be able to take a deduction of up to $2,500 of the Indiana property taxes (residential real estate taxes) paid on your principal place of residence. Your principal place of residence is the place where you have your true, fixed home and where you intend to return after being absent. Note: Property tax paid for summer homes or vacation homes is not deductible.

IMPORTANT: You cannot claim this deduction for property tax paid in 2016 if you are claiming the Lake County residential income tax credit.


How Do I Claim My Deduction?

Enter the address of your principal residence where the Indiana property tax was paid if it is different from the address on the front of the return. If you had more than one principal residence during the year, and you paid Indiana property tax on both residences, list the additional residence on a separate piece of paper.

Example: Sue and Mack each owned their own home; they married in 2016. They sold both of their homes during the year and began renting. They are eligible to claim a property tax deduction on the combined property taxes paid on both homes if they are filing a joint return (limited to $2,500 altogether).


* Enter the number of months you lived there. If you claim more than one residence, enter the number of months lived at the other residence(s) on a separate sheet of paper.

* Enter the amount of Indiana property tax paid. If you lived in more than one residence during the year, enter the combined amount of Indiana property tax paid on all principal residences.

* Enter the smaller of $2,500 or the amount of Indiana property tax paid.


No Double Benefit Allowed - If any portion of property taxes paid on your principal residence was deducted as an expense on Federal Schedule C, C-EZ, E or F, then do not deduct that amount.

Example: Jean paid $1,200 in Indiana property tax on her home. She used one room of her home for her business, and deducted $200 Indiana property tax as an expense on her federal Schedule C. Jean is allowed a deduction of $1,000 ($1,200 minus the $200 deduction already taken on federal Schedule C).


How Do I Find Out How Much I Paid in Indiana Property Tax on my Principal Residence?

Indiana counties send statements to homeowners showing how much property tax is due on their property. Add together the 2016 spring and fall installments, if you paid both of them. If you received just one installment this year for your 2016 property taxes, use the amount paid for that installment.

Sometimes mortgage companies pay the Indiana property tax from an escrow account. If you mortgage company pays it, they should send you a Form 1098 (or its equivalent) showing the amount of property tax paid. If you cannot locate the information, contact your local county treasurer's office or your mortgage company.

IMPORTANT: You must maintain copies of proof that you paid your Indiana property tax as the Department can require you to provide this information. This could include the Form 1098, the property tax statement from your local assessor's office, cancelled checks, etc.

You can review this information on page 14-15 of the instructions.

Once you have created your state return, you can enter your Renter's Deduction information under Subtractions from Income >> Residential Property Tax Deduction.