Indiana passed new tax laws in 2011 that now require certain items to be added back in arriving at Indiana taxable income. The Student Loan Interest Addback is one the new required adjustments and the Indiana Department of Revenue has recently issued additional information for use in calculating the addback for personal income taxpayers. The department reminds taxpayers that there is no addback required for the 2010 tax year. For 2011 purposes, a taxpayer must “refigure” the deduction as reported on the federal tax return using three qualifiers:
- the phaseout ranges are reduced from the federal phase out amounts, to $45,000 to $60,000 ($70,000 to $85,000 for joint filers);
- the interest is not deductible beyond the first 60 months that interest payments are required; and
- there is no deduction for voluntary payments of interest.
The required addback is the difference between the recalculated Indiana deduction and the amount reported on the taxpayer’s 2011 federal income tax return. Additional information…