Hoosiers can expect to see some tax changes come January 1, including the elimination of the state’s $3,000 mortgage deduction.
The Tax Foundation reports that under H.B. 1260, enacted in March 2022, Indiana’s $3,000 mortgage deduction will be repealed, while the property tax homestead deduction will increase by $3,000, allowing taxpayers to deduct the lesser of 60 percent of the assessed value of the property or $48,000 (up from $45,000) in 2022. Additionally, senior citizens may claim a tax deduction on homes valued up to $240,000 (up from $200,000) in 2022.
In addition, under H.B. 1002, enacted in March 2022, Indiana’s flat individual income tax rate will be reduced from 3.23 to 3.15 percent effective for 2023 and 2024, with triggers in place that could reduce the rate to 2.9 percent by 2029 if specified conditions are met.
Also, under S.B. 382, enacted in March 2022, Indiana is phasing out its add-back of the federal income tax deduction allowed for wagering taxes, with the add-back decreasing from 50 to 37.5 percent of the federal amount.