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Businesses and individuals with overdue Indiana taxes will have their first chance in more than a decade to pay off those bills without penalties.
The Indiana Department of Revenue has set the tax amnesty period to run from July 15 until Sept. 15. The program has been in the works since legislators instructed the agency in last year’s state budget bill to set an eight-week amnesty period to be completed by the end of 2026.
The launch of a frequently asked questions page about the amnesty offer was announced Monday in the Department of Revenue’s monthly tax bulletin notice.
Those with delinquent tax liabilities from before Jan. 1, 2024 who voluntarily pay during the amnesty period won’t face civil or criminal penalties, including late-payment fees, interest or collection fees.
Indiana had similar amnesty programs in 2005 and 2015. Those who participated in either previous amnesty aren’t eligible for the new period.
Money collected will be directed to the uses for each type of tax as called for under state law, according to the Department of Revenue.
“Many of the taxes such as individual income tax, corporate tax, and sales tax are deposited into the state’s General Fund to then be allocated to Indiana government activities,” the agency’s website said.
That differs from Indiana’s last tax amnesty period in 2015, which was used as a way to pay for then-Gov. Mike Pence’s Regional Cities economic development program.
Collections amount uncertain
Estimates on how much money the state could collect from this year’s amnesty have varied by wide margins.
The state’s nonpartisan Legislative Services Agency has projected that state tax collections could total between $156 million to $277 million for the state’s general fund.
The latest revenue estimates from the State Budget Agency, however, includes $124 million from amnesty collections for the coming fiscal year.
Legislators turned to the amnesty program last year as a way “to fill the bucket as best we could with additional revenues” after a dismal tax collections forecast in April 2025, Senate Tax and Fiscal Policy Committee Chair Travis Holdman said.
That forecast anticipated tax revenue growing less than 1% each year of the state’s two-year budget cycle.
But state government’s financial picture has improved dramatically since then as an updated report in December projected tax collections growing by 4.2% this fiscal year and by 2.7% next year. That would nearly double the state’s cash reserves to almost $5 billion by the middle of 2027.
Holdman characterized the amnesty program as a less labor-intensive method to increase voluntary payments by delinquent taxpayers.
Collections company helping state agency
The Department of Revenue won’t be alone in coordinating this summer’s amnesty period as the agency has hired contractor United Collection Bureau. The state’s contract says the company is to “raise awareness of the Amnesty Program and to increase positive response to and participation in the Amnesty Program.”
United Collection will be paid 5.5% of what it collects in amnesty payments — less than the 6.5% it receives from other state tax collections under a contract extension it signed with the state in late December.
Several other states have had similar amnesty programs, including one in New Hampshire this year that brought in more than $103 million.
Indiana’s 2015 amnesty period collected $188.5 million, which a state report said amounted to 34% of the eligible liabilities.
Out-of-state businesses paid about two-thirds — $125.6 million — of that collected in 2015, with 20% — $37.7 million — coming from Indiana individual taxpayers.
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: [email protected].
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