Longer timeline set for Indiana tax refunds from big surplus

INDIANAPOLIS (AP) — State officials will start sending out $125 payments to Indiana taxpayers next month under the state’s automatic taxpayer refund law, although the timeline announced Wednesday for those payments is several months longer than previously outlined.

Those payments are being made because of a big jump in state tax collections helped by federal COVID-19 relief funding. That revenue jump increased the state government's cash reserves to a record $3.9 billion as of last summer, triggering the taxpayer refund law for the first time since 2012.

The refund payments totaling about $545 million will go to an estimated 4.3 million people, according to the governor’s office.

Republican Gov. Eric Holcomb said in a statement that the refund would amount to a 12% cut in the average Indiana resident’s annual income tax liability.

“I’m beyond thrilled that this spring and summer we are returning money back into the hands of Hoosier taxpayers, where it belongs,” Holcomb said.

Those payments will start by direct deposit in May to those who have filed their 2021 income tax returns by April 18 and provided bank account information to the state Department of Revenue, the governor’s office said.

Direct deposit payments are expected to continue through July, while refund checks will be mailed to others beginning in late July with a goal of sending out all checks by Sept. 1.

That processing timeline is four months longer than the May 1 completion target that the governor’s office stated when announcing the refund amount in December.

State officials on Wednesday cited “supply chain issues” in the paper industry for delays in the mailing of checks.

“There are multiple steps required to handle the high-volume of ATRs, so we encourage Hoosiers to be patient throughout this...