Over 4 million Hoosiers are eligible for a $200 refundable tax credit
A compromise was reached on the final day of the special session between the House and Senate to provide $200 refunds for Hoosier taxpayers.
They also agreed to earmark about $75 million to social services programs for mothers and children as a result of the state’s abortion ban.
The taxpayer refund will be provided to an estimated 4 million Hoosiers and an additional 500,000–600,000 non-filing individuals are eligible for a $200 refundable tax credit. It is important to note that the state tax refunds may be considered taxable income on the 2023 federal return for some taxpayers that elected to itemize deductions on their federal tax return and claimed the state and local tax (SALT) deduction.
The newly enacted law obligates the first $1 billion in excess reserves to be transferred to the Pension Stabilization Fund, and it is estimated that the state tax collections will exceed projections in fiscal 2023.
Additionally, it provides that the Gasoline Use Tax rate is capped at $0.295 per gallon through June 30, 2023. However, if the Gasoline Use Tax rate falls under than $0.295 per gallon, the lesser tax rate shall apply. If the gasoline prices continue to fall as projected, this provision will likely have no fiscal impact on the state.
Meanwhile, an increased focus on social issues in the Legislature, as exemplified by the state’s abortion bill (Senate Bill 1), has led some pundits to believe that certain statehouse races may be more competitive this year than originally anticipated.