Indiana Governor Mitch Daniels
(Indianapolis, Ind.) - Indiana taxpayers will get a hefty tax refund in 2013, thanks to the state’s large budget surplus.
Governor Mitch Daniels announced Wednesday morning more details about the automatic taxpayer refund. It’s made possible by a $721 million state surplus, half of which is going to the refunds while the other half will be used to shore up various state pension funds.
The tax credit will be $111 for single filers and $222 for joint filers.
“We insisted on a per capita refund for two reasons: first, maximum simplicity, as seen on the new tax form. Second, to provide the most relief to lower and middle income Hoosiers, for whom $222 may be meaningful right now,” said Daniels.
Typical taxpayer liability is $850, equating to a median tax cut for Hoosiers of about 13 percent. The governor’s office estimated that about 335,000 taxpayers who would have otherwise owed taxes will instead receive a return check.
Indiana closed the 2012 Fiscal Year with reserves of $2.155 billion, or 15 percent of the state’s budget. State lawmakers approved the governor’s 2011 plan for an automatic taxpayer refund if the state’s reserves exceeded 10 percent at the end of the budget year.
In future years, the reserve threshold will be 12.5 percent.
“Past a point of rock-solid fiscal strength, it’s better to leave this money in the pockets of those who earned it than to let it burn a hole, as it tends to do, in the pocket of government,” Daniels said.