How to File Your Indiana Tax Return for 2016: A Step-by-Step Guide

If you lived or earned income in Indiana during 2016 and didn’t file your state return, there’s still time to catch up. Many taxpayers don’t realize they can file past-year returns to claim refunds, settle outstanding balances, or correct missed filings. Whether you were a full-year resident, moved during the year, or ran a small business in Indiana, this guide walks you through how to file your Indiana tax return for 2016 accurately and confidently.

Filing late may still allow you to claim the money you are owed, especially if state income tax was withheld from your paycheck or you qualify for refundable credits. Even if you missed the original due date, you can submit your return and pay directly to avoid additional penalties. We’ll also explain how to request a payment plan if you owe tax but can’t immediately afford the full amount.

This article covers everything you need to know, including which forms to use, how to report your income, what deductions and credits to look for, and how to receive your refund. You’ll also learn about bank account options for direct deposit, deadlines to remember, and how to contact the Indiana Department of Revenue if you need help. Let’s start with who needs to file.

H2: Who Needs to File a 2016 Indiana Tax Return

Filing requirements for the 2016 Indiana tax year depend on your residency status and income level. You may be required to file an income tax return for Indiana even if you didn’t live there for a year. Understanding whether you're obligated to file can help you avoid penalties, claim refunds, or comply with state programs tied to past-due taxes.

You must file a 2016 Indiana return if:

• You were a full-year Indiana resident whose gross income exceeded your total exemptions.
  
  
• You were a part-year resident who earned income while living in Indiana or from Indiana sources.
  
  
• You lived in another state but earned income from Indiana-based jobs, properties, or partnerships.
  
  
• You are a business owner or sole proprietor who operated in Indiana in 2016.

Even if you were not required to file, it may still benefit you to submit a return. Filing allows you to claim a refund of any state tax withheld by your employer. You may also qualify for refundable credits that return money to your bank account. Refunds from the 2016 tax year must generally be claimed within three years of the original due date, or by the extended deadline if one was filed.

The key deadlines for filing taxes in the 2016 tax year are as follows:

• Original filing deadline: April 18, 2017
  
  
• Extended deadline with Form IT-9: November 14, 2017
  
  
• Deadline to claim a refund: April 20, 2020 (or November 14, 2020 with extension)

If you haven’t filed yet, you’re past the refund deadline but may still need to file to pay directly, reduce penalties, or resolve a notice sent by the Indiana Department of Revenue. Filing now helps keep your account in good standing and may prevent collection actions in the future.

What Forms to Use for Your 2016 Indiana Tax Return

The proper form is essential for correctly filing your 2016 Indiana income tax return. Your residency status, income sources, and filing situation will determine which documents you need to complete. Using the appropriate schedules also allows you to claim deductions, credits, and refunds to which you may be entitled.

Main Income Tax Forms

• IT-40: This standard form is for full-year Indiana residents to report all taxable income, deductions, and credits.
  
  
• IT-40PNR: For part-year residents and nonresidents. Use this form if you lived in Indiana for only part of 2016 or earned income from Indiana while living elsewhere.
  
  
• IT-40RNR: For full-year residents of states with reciprocal agreements (KY, MI, OH, PA, WI). You can use this form to report income exempted from Indiana due to reciprocity agreements.

The Indiana Department of Revenue website offers free downloads of these forms. You can also request paper copies by phone or mail.

Required Schedules for Most Filers

Additional schedules are usually required if you file using the IT-40 or IT-40PNR. These schedules allow you to report specific deductions, county tax, credits, and other details that affect your total tax and refund status.

• Schedule 1: Add-backs (for income taxed by Indiana but not federally)
  
  
• Schedule 2: Deductions, such as renter’s deduction or military service deduction
  
  
• Schedules 3 & 4: Exemptions and other tax calculations
  
  
• Schedule 5: Credits, such as earned income credit or tax withheld
  
  
• Schedule 6: Offset credits, such as for taxes paid to other states
  
  
• Schedule 7: Required additional information
  
  
• CT-40: Calculates county tax based on your county of residence
  
  
• IN-DEP: For claiming dependents

Forms for Small Business Owners and Corporations

If you're a sole proprietor or operate a small corporation, you must report business income using your federal Schedule C. You may also need to file Indiana-specific business schedules like

• IN-OCC: For other certified credits
  
  
• IN-EDGE: For Economic Development credits, if you qualify
  
  
• IT-20 (if you are a C-corporation filing separately from a personal return)

Don’t forget to use tools like the Indiana DOR’s website to find instructions and check which forms apply to your situation. These resources help you apply credits correctly, reduce interest and penalties, and potentially increase your savings through overlooked deductions.

Step-by-Step Instructions to Complete Your Return

Preparing your 2016 Indiana tax return requires careful attention to forms, figures, and deadlines. This step-by-step guide walks you through the whole process, whether you're filing as an individual, a sole proprietor, or a small corporation, so you can complete your return accurately and avoid common mistakes.

Step 1 – Gather Required Documents

Start by collecting all the necessary paperwork before filling out your forms. These records will help ensure your return is complete and accurate.

• W-2 forms showing wages earned from Indiana employers
  
  
• 1099 forms for additional income, such as contract work or interest
  
  
• A copy of your completed 2016 federal return
  
  
• Prior Indiana state returns (if available)
  
  
• Records for deductions, credits, or tax-related savings
  
  
• Social Security numbers for yourself, your spouse, and dependents

Step 2 – Complete Your Federal Return First

Indiana calculates state income tax based on federal figures, especially your adjusted gross income (AGI). Complete your 2016 federal tax return before starting your Indiana forms to avoid delays or mismatches.

Step 3 – Choose and Fill Out the Correct Form

Use the correct state form for your residency status in 2016:

• Form IT-40 if you were a full-year Indiana resident.
  
  
• Form IT-40PNR if you were a part-year resident or nonresident with Indiana income.
  
  
• Form IT-40RNR if you were a full-year resident of a reciprocal state (KY, MI, OH, PA, or WI) and earned only wage income in Indiana.

Each form includes instructions to help you report your income, apply deductions, and calculate your tax.

Step 4 – Complete Required Schedules

Many filers must attach additional schedules to support their return. These schedules calculate adjustments, credits, and interest owed or refunded.

• Schedule 1: Reports income from Indiana taxes that the IRS does not.
  
  
• Schedule 2: Allows you to report deductions like renters’ or military deductions.
  
  
• Schedules 3 and 4: Used to calculate exemptions and additional taxes.
  
  
• Schedule 5: Used to claim credits, including tax withholding and earned income credit.
  
  
• Schedule 6: Reports offset credits for taxes paid to other states.
  
  
• Schedule 7 and IN-DEP: Reports dependents and other required info.
  
  
• CT-40: Calculates your county income tax.

Step 5 – Include Business Income If Applicable

If you ran a business, operated as a sole proprietor, or earned freelance income, you must report your 2016 business activity. Use federal Schedule C as a reference when completing your Indiana return. Also, check if you qualify for state programs offering business-related deductions or credits, like IN-OCC or IN-EDGE. Partnerships and corporations may have additional filing requirements.

Step 6 – Select a Refund Option and Enter Your Bank Account Details

If you’re due a refund, the fastest way to receive it is by directly depositing it into your bank account. Make sure your routing and account numbers are correct on the form. This expedites the process and prevents the loss or misdelivery of refund checks.

Step 7 – Pay Directly If You Owe Tax

If you owe money on your 2016 return, you can pay directly using:

• An electronic check (eCheck) from your bank account
  
  
• A debit or credit card through the DOR’s secure portal
  
  
• A paper check or money order mailed with your return

Even if you can’t pay the full amount, file your return. Then, you can apply for a payment plan to limit penalties and interest.

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How to File Your Indiana Tax Return

Once you have filled out your 2016 forms and schedules, you must decide how to file. The Indiana Department of Revenue (DOR) will accept electronic and paper returns for the past year.

Electronic Filing (E-file)

E-filing is the fastest and most accurate way to submit your return. You may qualify for Indiana’s free e-filing options if you meet certain income or filing criteria. E-filed returns are processed more quickly, with refunds typically issued in 10–14 days. You’ll also receive confirmation when your return is accepted.

Paper Filing

If you prefer to file by mail or choose not to e-file, print your completed forms and sign your return. Attach all required schedules, W-2s, and supporting documents. If you opt out of e-filing, include Form IN-OPT with your return. Make a copy for your records, apply proper postage, and send it to the correct address based on whether you are enclosing a payment.

Filing by mail takes longer to process, up to 12 weeks occasionally.

How to Make a Payment

If your 2016 Indiana tax return shows you owe a balance, the state offers several convenient ways to submit your payment. Submitting your return and payment promptly helps minimize additional interest and penalties.

Payment Options

• Electronic check (eCheck): Pay directly from your bank account using the DOR’s secure online system. A small processing fee applies.
  
  
• Credit or debit card: To pay by card, visit in.gov/dor or call 1-800-2-PAY-TAX. The payment processor may charge additional fees.
  
  
• Check or money order: Mail your payment with your return. Make it payable to “Indiana Department of Revenue” and include your Social Security number and “2016 IT-40” on the memo line.
  
  

Payment Plans

If you can’t afford to pay the full amount immediately, you can apply for a payment plan after receiving a tax bill. Visit INTaxPay.in.gov to check eligibility and set up monthly payments.

If you can’t pay in full, file your return on time. Filing helps reduce penalties and keeps your account in good standing.

How to Track Your 2016 Refund

If you're expecting a refund from your 2016 Indiana tax return, it's essential to understand how long it may take and how to check the status. Refund processing times vary depending on how you filed and how you chose to receive the funds.

Refund Processing Times

• E-filed returns: Typically processed within 10–14 days.
  
  
• Paper-filed returns: May take up to 10–12 weeks to process.
  
  
• Bank deposit delays: Your bank account may take 5–7 days to post the refund once issued.

How to Check Your Refund Status

You can check your refund status by:

• Call the Indiana Department of Revenue at 317-232-2240 (select option 3).
  
  
• Have your Social Security number and refund amount ready when checking your status.
  
  
• You can check your status using the DOR’s online refund tracker at in.gov/dor.

Important Notes

Your refund may be reduced or withheld if you owe child support, student loans, or other government debts. The DOR will send a notice explaining any offsets. Filing early and opting for direct deposit is the fastest way to receive your refund securely.

Final Filing Checklist

Before submitting your 2016 Indiana tax return, take a moment to double-check your forms and attachments. Start by confirming that your return is complete and signed. If you're filing jointly, both spouses must sign. Review every schedule to ensure you’ve included the correct versions. Complete Schedules 1 through 7, CT-40, and IN-DEP if you claim dependents. Additionally, please ensure all W-2s and 1099s indicating Indiana tax withheld are attached to the front of your return.

Verify all calculations, especially your total tax, refund amount, and bank account information for direct deposit. If you're mailing your return, apply the correct postage and use the proper mailing address based on whether a payment is enclosed. Always make a full copy of your return and all attachments to keep in your records for at least three years.

A complete and accurate return helps prevent delays, avoids unnecessary notices from the Department of Revenue, and ensures that you don’t miss out on any refunds, deductions, or savings you may qualify for.

Frequently Asked Questions (FAQs)

What if I missed the 2016 Indiana filing deadline?

You can still file your return if you missed the original due date. While the opportunity to claim a refund has passed, submitting a late return may help reduce penalties or resolve a balance owing. Filing even now helps bring your account current and may prevent future collection action or interest charges from the state.

Can I still get a refund from my 2016 Indiana return?

No, the deadline to claim a refund for 2016 was in 2020. If you have not filed by then, you are no longer eligible to receive a refund. However, you should still file your return to stay compliant and avoid further penalties or enforcement action.

Can I e-file my 2016 return for free?

Indiana’s free e-filing programs are generally only available for current-year returns. You may still be able to e-file a 2016 return using commercial software, but most taxpayers must print and mail the forms. Be sure to follow the instructions and include all required documents.

What are the most commonly missed Indiana tax deductions?

Some of the most overlooked deductions include the renter’s deduction, the homeowner’s property tax, and the military service deduction. Many also overlook credits for college contributions or medical savings accounts. Reviewing the instructions carefully can help you avoid missing valuable tax benefits.

Do I need to file if I was only in Indiana part of the year?

You must file a return if you earned any income from Indiana while living in or outside the state in 2016. Use Form IT-40PNR for part-year or nonresidents to accurately report only the portion of income taxed by Indiana.

How do I correct a mistake on my return?

To amend a 2016 Indiana tax return, file Form IT-40X. Clearly explain the error and include copies of any corrected forms or documentation. While refunds are no longer available for that year, correcting your return ensures your records are accurate and avoids future issues.

Can I file jointly if only one spouse lives in Indiana?

If you filed a joint federal return, you must also file jointly in Indiana. Use Form IT-40PNR to report both spouses’ incomes and indicate which portion is taxable by Indiana. This ensures accurate reporting and avoids overpaying state income tax.