DOR Provides Additional Important Information on Unemployment Income

New information has been released for Hoosier taxpayers who received unemployment compensation in 2020 and have already filed their state income tax returns.

Those who used a tax preparation software product, online services, or paid a tax professional to prepare their tax return need to check for information from their software preparer or provider about updates and how the required add-back of unemployment income that was excluded from their federal adjusted gross income was handled.

Many tax preparation software products were updated to perform the appropriate add-back of unemployment income.

In cases where the add-back of this Indiana taxable income was not accommodated, DOR will automatically perform the following review, without requiring any additional action by Indiana taxpayers:

  • Review tax returns to determine the taxable amount of unemployment compensation for Indiana;
  • Make any necessary corrections to those returns;
  • If any additional amount is due, issue a bill for that amount in June; and
  • Waive any potential penalty associated with unemployment income adjustment if the bill is paid in full in a timely manner.

For more information, visit dor.in.gov and click on the “Learn More” button under “Unemployment Benefits and Taxes”.

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