State Tax Season Progressed Without Incidents, Set New Records
Each year from January through April, the Indiana Department of Revenue receives and processes more than 2 million tax returns, handles hundreds of thousands of taxpayer calls, and issues more than 1.5 million refunds on average. This year the revenue agency set some new records compared to previous years.
“One area I’m pleased with is our customer service,” said Revenue Commissioner John Eckart. “Though I know our phone lines get full during tax season and some callers have difficulty getting through during the month of April when we have the biggest crunch of the year, we still improved our service from last year in terms of serving more taxpayers, and serving them more quickly.”
This year the Department of Revenue handled more than 140,000 phone calls during the tax season, compared with 114,000 for the same time period last year. Yet the agency’s hold times went down from just over four minutes on average in 2009 to less than three minutes on average this year. “In the month of April, the agency’s biggest crunch time, we handled more than 17,000 phone calls,” said Eckart. “That is an average of 1,100 calls a day, compared to about 500 per day in our off-season.”
In addition, deflected calls, those callers not able to get through the first time, were down 42 percent this year compared with the 2009 tax season. “We were able to achieve these service results with the use of smarter technology, Hoosiers using the Department’s many self-serve tools, and a can-do attitude from the customer service staff,” said Eckart.
Refunds Issued in Larger Numbers
A higher number of taxpayers also received refunds this year compared to last year. The Department issued more than 1.6 million refunds in 2010, compared with about 1.5 million in 2009. The average refund this year was $324, compared with $279 in 2009. Refunds directly deposited into taxpayers’ accounts from returns filed electronically were issued in an average of three days, compared with paper filers, who generally must wait 6 to 12 weeks to receive their refunds due to the longer processing time necessary for paper returns.
Electronic Filing Up – Again
For the fourth year in a row, more Hoosiers became electronic filers of their state tax returns. As of April 16, nearly 86 percent of all state filings were done either through the state’s I-File program or the federal e-File program. I-File usage alone increased 22 percent over last year, and all types of electronic filing increased by 4 percent over 2009. Electronic filing in Indiana has increased by nearly 20 percent in the past four years.
“Electronic filing is the most efficient and effective way for Hoosiers to file,” said Eckart. “Returns filed electronically are 99 percent accurate, compared with paper returns, of which more than 20 percent have errors. And those errors can result in penalty, interest, and possibly an audit.”
It costs the state of Indiana approximately $2.3 million to process about 1 million paper returns, compared with only about $150,000 operationally to process more than 2 million electronic returns.
Total Returns Filed to Date
Although the Department gets its largest deluge of mailed paper returns after April 15 – about 700,000 annually – it did process more than 2.2 million returns in total by the 2010 tax deadline, compared with 2.1 million processed by the same time last year. By the end of the full calendar year, the Department will process an anticipated 3.1 million returns in total.
New Fee for Wireless Prepaid Phone Cards and Services Beginning in July
Beginning July 1 retailers throughout the state who sell prepaid mobile phone cards and services will be required to charge their customers 25 cents per sale of these products and services.
The fee, known as the Prepaid 911 Enhancement Fee, is the result of a new law passed in the spring by the Indiana General Assembly. Revenues from the fees will go to fund Indiana compliance with the 911 requirements, also established by the state legislature.
Retailers are required to inform customers of the fee, which will be charged per sales transaction on the base price of the product. Customers can expect to pay the fee on items such as mobile phone cards and prepaid mobile phone services.
The General Assembly passed several bills that affect Indiana taxes:
- Effective Jan. 1, 2010, existing businesses no longer are required to have at least 35 employees to qualify for an EDGE credit for job retention.
- Effective Jan. 1, 2010 (retroactive), there is a new tax credit for corporations and pass-through entities. If, after Dec. 31, 2009, the business relocates or locates its operations in Indiana, incorporates in Indiana, or expands it operations in Indiana and it employs at least 10 new qualified employees, it is eligible for a credit equal to 10% of the wages paid to qualified employees.
- Effective Nov. 6, 2009 (retroactive), the net operating loss deduction may be carried back only two years for losses incurred in 2008 and 2009. (This is different from the IRS NOL, which can be carried back five years.)
- Effective July 1, 2010, employers must file their WH-3 and W-2 statements electronically if they file more than 25 withholding statements. (This provision applies to statements filed after Dec. 31, 2010.)
- Effective July 1, 2010, sellers of prepaid wireless telecommunications services must collect an Enhanced Prepaid Wireless Telecommunications Service Charge, which is $0.25.
For a full list of the state’s current and upcoming tax changes, visit www.in.gov/dor/3656.htm
Rumor Control: Refunds
State refunds are not being reviewed, or held, due to the amount of the refund. Refunds that require additional information or have inconsistent information are reviewed to address the situation specific to that return.
For more information, visit the Tax Talk Blog at www.in.gov/dor/4411.htm
New Tax Bulletins, Directives and Notices Available Online
Please check the Department’s Web site for additional updates to tax bulletins, directives, and notices at www.in.gov/dor/3330.htm
Save the Date: Indiana’s Tax Schools
The Tax Schools are just around the corner. These joint collaborations are designed to educate and meet continuing education requirements for attorneys, certified public accountants, certified financial planners, and enrolled agents. Topics include the "Revenue Update," small business issues, net operating losses, entity issues, and ethics, among many others.
These events, organized by the Indiana Department of Revenue, Indiana University, the Internal Revenue Service, and Purdue University, occur around the state from September through December.
For more information regarding the 2010 Indiana University Tax Practitioner Institutes, visit http://scs.indiana.edu/nc/taxpracinst.html
For more information regarding the 2010 Purdue Income Tax School Programs, visit https://www.cec.purdue.edu/eC2K/Heading.asp?heading_id=91
WH-3 eFile Mandate
Effective July 1, 2010, any employer that files more than 25 withholding statements in a calendar year is required to file the annual WH-3 and its employees’ W-2s electronically. This new law (IC 6-3-4-16.5) applies to withholding statements filed after Dec. 31, 2010.
There are a couple ways you can electronically file your WH-3 and W-2s:
INtax - You can use INtax to manage your Indiana sales and withholding taxes online. It gives you 24/7 access to your business tax records and lets you file and pay online right up to the last minute. Many taxpayers currently using INtax are highly satisfied with it. In fact, 93 percent of INtax users recently surveyed said they would recommend INtax to others.
To register, please visit http://www.intax.in.gov/
Bulk File Upload - The bulk file upload is a system for uploading electronic files containing tax return data to the Department of Revenue’s systems. Bulk file upload submitters must be preregistered and certified to use the system. This is the Department’s preferred method of electronic filing if a company has 500 or more employees.
For more information, please visit www.in.gov/dor/4002.htm You may also contact the Department at (317) 233-5656 or IDORB2BSupport@dor.IN.gov
Get Critical Updates from the Department
The Department now offers several ways for you to learn about important tax updates:
For previous editions of the Tax Dispatch, click here.
To better serve Indiana taxpayers, the Indiana Department of Revenue may occasionally inform taxpayers of new services and results of a survey or invite a randomly selected group of taxpayers to participate in a short electronic survey or focus group. Electronic communication and surveys enable the Department to inform you about our services and helps the Department learn how to better serve Hoosier taxpayers.
Electronic surveys and e-mail messages from the Indiana Department of Revenue will never ask for any financial or personal information, and survey responses are always confidential.
If you are asked for personal or financial information (Social Security number, bank account information, etc.), do not reply or click on any links in the e-mail message. Legitimate organizations should never ask for personal information by e-mail.
If you would like to further verify an e-mail you have received by the Indiana Department of Revenue, please call (317) 232-2379.
Remember, the Indiana Department of Revenue will never request personal information by e-mail.