As Indiana considers second tax refund, some wonder: where’s the first?

With Indiana lawmakers poised to authorize a second, $225 tax refund to taxpayers in a special session this month, some Hoosiers are still waiting for the first $125 refunds promised late last year.

As of June 22, Indiana had issued about $245.6 million in refunds, according to the Department of Revenue. That’s about 45% of the $545 million Gov. Eric Holcomb promised to return when he announced the move in December 2021.

About 1.5 million refunds have gone to 2 million residents, including combined refunds to married couples who filed their taxes jointly, according to the department. Holcomb’s administration estimated 4.3 million people would get refunds.

Indiana’s Republican-dominated legislature is planning to take up Holcomb’s newest $1 billion dollar refund proposal in a special session starting July 25. But Hoosiers who haven’t seen the first round of payments feel left in the dark.

Keeping track

“It is not making or breaking my family,” said Jenni Russ, of Marion County. She, her husband and 20-year-old son haven’t received their payments. “It’s more like the whole disarray of the situation, and the lack of a way to know when it’s coming.”

The department maintains a “Where’s my refund?” tool online for income tax refunds, but information on the one-off refunds isn’t included.

Department spokeswoman Natalie Rodriguez said the agency was preparing for its final round of direct deposits, which she said “will hit Hoosier taxpayers’ accounts in early July.”

Others will start receiving paper checks later this summer. The Auditor of State, tasked with mailing the checks, is citing supply chain snafus in its struggle to get paper, Rodriguez said. The department says checks will go out beginning mid-July, and that it’ll put more guidance online for those who still haven’t received their refunds by September 1. 

(For details on eligibility for direct deposit versus mail, check the department’s site.)

Lisa Thibault, of Indianapolis, filed her taxes in March, just like her two oldest children. Thibault said her tax preparer confirmed the payment would come electronically. But while Thibault’s 21-year-old and 22-year-old got their direct deposits on May 4, hers hasn’t come through.

“It would just be nice. It would probably fill up a tank-and-a-half of gas at most,” said Thibault, who is widowed. “My oldest is getting married in August, so that would be nice to cover some of those expenses, but it’s not a make or break.”

Looking for alternatives

Indiana Democrats have been pushing for a gas tax suspension as an alternative solution, though Republicans haven’t taken them up on the idea. One economics expert panned both ideas as worsening inflation, but several Hoosiers who talked to the Capital Chronicle compared their pending refund amounts to the impact of a tax holiday – or to state investments elsewhere.

Russ’ husband works in the landscaping industry, and said pausing the tax or delaying scheduled tax hikes could be more impactful for her family.

“They have a massive fleet of vehicles to do all the work that they do – and equipment. And he told me one night what their fuel costs are per month,” Russ said. “It was horrible. … And they have to pass some of that onto their [customers].”

Tonya Heim, a former nurse who said neither she nor her husband had received their refunds, said she would’ve preferred the $545 million to go toward health or education.

“Honestly, I mean, it’s a couple tanks of gas,” said Heim, of Dubois County in southern Indiana. “My husband and I are both retired, so we’re on a fixed income, but … I’ve got money saved. We’re not living from paycheck to paycheck. And that $125, I would rather they kept it and invested in public health and teacher salaries. It’s not going to be that significant to me, but as a state we have not done right by our teachers.”

But, she added, “I also know that I’m not aware of a fraction of the information that the people that we elected to take care of our business are aware of, so you know, I give some grace for that.”