Indiana tax amnesty program underway!

Indiana Department of Revenue's amnesty period opened July 15 for those with Indiana tax liabilities from before 2024. If a payment plan is desired, they must be agreed no later than Sept. 9.

Amnesty details:

• Offer is open to individuals and businesses with past-due taxes from before Jan. 1, 2024, who did not take part in Indiana’s similar 2005 or 2015 programs waiving penalties, interest and collection fees.

• Individuals owing more than $100 and businesses owing more than $500 can set up payment plans, but those debts must be paid by June 7, 2027, to avoid incurring additional penalties.

• More details available on the Department of Revenue’s Tax Amnesty 2026 webpage.

Indiana had similar amnesty programs in 2005 and 2015 that allowed those voluntarily pay their tax delinquency to avoid facing civil or criminal penalties, including late-payment fees, interest or collection fees. It estimates the amnesty period could yield between $65 million and $144 million, while the State Budget Agency has included $124 million of amnesty revenue into its 2027 fiscal year projections.

Those figures add up to collecting between 14% and 31% of the past-due taxes.

Indiana’s 2015 amnesty period collected $188.5 million, which a state report said amounted to 34% of the eligible liabilities.

Those who took part in either previous amnesty aren’t eligible for the new period.

Direct contact rather than advertising

The general public won’t notice much promotion of the effort as the Indiana Department of Revenue. Instead they are focused on directly notifying delinquent taxpayers about the chance to pay off those bills without penalties.

The Department of Revenue is using its Indiana Taxpayer Information Management Engine, or INTIME, as its principal way of processing actions for the amnesty program.

Department officials decided against any mass marketing endeavors for the tax amnesty program, instead sending notices directly to the individuals and businesses with delinquencies.

So there will be no tax amnesty billboards or television ads, department spokeswoman Megan Kramer said.

“Instead of spending money on trying to get a percentage of people who aren’t actually eligible, we wanted to instead really focus our efforts on those who we know could benefit from this opportunity,” she said.

Where the money collected will go

Legislators directed the Department of Revenue to establish the amnesty period as part of the state budget bill adopted in 2025. That came as they scrambled in response to projections that tax collections would grow less than 1% each year of the state’s two-year budget cycle.

But state government’s financial picture has improved dramatically since then as tax revenue jumped 6.8% over the past year, which helped the state’s cash reserves grow by $1.5 billion to just shy of $4 billion.  

Money collected through the tax amnesty will be directed to the uses for each type of tax as called for under state law, according to the Department of Revenue.

“Many of the taxes such as individual income tax, corporate tax, and sales tax are deposited into the state’s General Fund to then be allocated to Indiana government activities,” the agency’s website said.

During the 2015 amnesty, out-of-state businesses paid about two-thirds — $125.6 million — of the delinquent collections, with 20% — $37.7 million — coming from Indiana individual taxpayers.

Going into this year’s amnesty, about 60% of the eligible past-due taxes are owed by businesses, according to the Department of Revenue. Roughly 60% of the delinquencies are from Indiana taxpayers and 40% are from elsewhere.

SOURCE: Indiana tax amnesty program underway with prospect of collecting at least $100M • Indiana Capital Chronicle