INDIANAPOLIS | Hoosier income tax payers each will receive $111 next year as Indiana returns a portion of its $2.15 billion budget reserve to its citizens.
Gov. Mitch Daniels on Wednesday announced the value of the taxpayer refund created by lawmakers in 2011 to ensure the state's reserve funds never get too big. Under the law, a refund is automatically triggered when the reserve tops 10 percent of the next year's budgeted spending.
"Better that these dollars remain in the pockets of the men and women who earned them than burn a hole in the pockets of government," Daniels said.
A total of $360.6 million will be divided equally among approximately 3.26 million eligible taxpayers. An additional $360.6 million already has been used to shore up Indiana's public pension funds.
The taxpayer refund will be paid next year as a deduction from a Hoosier's 2012 income taxes. Taxpayers who owe the state will pay less; those due a refund will get an even bigger refund.
Joint income tax filers will receive a $222 automatic taxpayer refund.
According to the Indiana Department of Revenue, a typical Hoosier pays $850 a year in state income taxes. The refund will knock about 13 percent off that tax liability.
Daniels, a Republican, said about 335,000 taxpayers who otherwise would have owed money next year instead will get money back thanks to the automatic taxpayer refund.
Preliminary estimates of state revenue growth coupled with continued restrictions on state spending make another refund possible in the near future, even with a new refund trigger requiring reserves equal to 12.5 percent of the next year's spending.