Unified Tax Credit for the Elderly
The Unified Tax Credit for the Elderly is Indiana's main income tax benefit for low-income seniors. This is a refundable credit, meaning you can receive a refund even if it's more than your tax liability.
Eligibility Requirements for the Unified Tax Credit
To be eligible, you must meet the following criteria:
- Be 65 or older by the end of the tax year.
- Have been an Indiana resident for at least six months.
- Have a household federal AGI less than $10,000.
- File jointly if married and living together.
- Not have been incarcerated for over 180 days during the tax year.
Claiming the Unified Tax Credit
If you don't need to file a regular Indiana income tax return (Form IT-40), you can use Form SC-40 for Low Income Seniors to claim your refund. If you do file Form IT-40, you can claim the credit there. The deadline is usually June 30 after the taxable year ends.
Property Tax Credits for Seniors
Indiana also provides property tax credits for senior homeowners, including the Over Age 65 Credit and the Over Age 65 Circuit Breaker Credit. Recent law changes affect these benefits for property taxes due in 2026.
Over Age 65 Property Tax Credit (Effective for 2026 Property Tax Bills)
This credit replaces the old Over 65 Deduction and offers up to $150 off a qualifying homeowner's property tax bill. To be eligible, you must be 65 or older by December 31 of the year before taxes are due, have owned the property for at least a year, meet income limits (for 2026 taxes, 2024 federal AGI of $60,000 or less for single or $70,000 or less for joint filers), and file Form 43708 with your county auditor by January 15.
Over Age 65 Circuit Breaker Credit
This credit limits how much a senior's property tax bill can increase each year, capping the increase on an eligible homestead at no more than 2% over the previous year's tax. Eligibility requires being 65 or older by December 31 before taxes are due, meeting income limits (for 2026 taxes, 2024 federal AGI of $60,000 or less for single or $70,000 or less for joint filers), and qualifying for the homestead standard deduction.
Indiana Senior Tax Credits vs. Tax Exemptions
Indiana offers both tax credits and exemptions. Credits directly reduce the tax owed, while exemptions lower the amount of income or property value subject to tax.
| Feature | Tax Credits | Tax Exemptions |
|---|---|---|
| Effect | Directly reduces tax liability | Reduces the amount of income or property value that is taxed |
| Example (Income) | Unified Tax Credit for the Elderly | $1,000 exemption for taxpayers 65+ |
| Example (Property) | Over Age 65 Credit, Over 65 Circuit Breaker | Over 65 or Surviving Spouse Deduction |
| Mechanism | Applied after tax is calculated | Applied before tax is calculated |
| Refundability | Can be refundable (e.g., Unified Tax Credit) | Not typically refundable; can only reduce tax liability to zero |
Conclusion
Indiana provides several tax benefits for seniors, including the refundable Unified Tax Credit for the Elderly for income tax and the Over Age 65 Credit and Circuit Breaker Credit for property taxes. Eligibility depends on age, residency, and income. Seniors should check the Indiana Department of Revenue website or their county auditor and file the correct forms by the deadlines. Free tax help is available through programs such as AARP Foundation Tax-Aide and VITA.
For more information on state tax programs, refer to the official {Link: Indiana Department of Revenue website https://www.in.gov/dor/}.
