Indiana Tax Amnesty Program Legislative Update

In May 2025, the Indiana General Assembly passed the budget bill for the fiscal period from July 1, 2025, through June 30, 2027¹. As part of this legislation, the General Assembly established a tax amnesty program. In a February 4, 2026 Tax Bulletin, the Department has announced that the program is scheduled to run from July 15 through September 15, 2026.

The program will be open to all tax types other than wagering taxes, although the tax periods covered by the amnesty remain uncertain. Under the budget bill, the amnesty period was originally contemplated to cover taxes for periods ending prior to January 1, 2023.  However, amending legislation that would extend the tax periods covered by the amnesty to include periods ending before January 1, 2024 (Senate Bill 243) was referred to the Committee on Ways and Means on February 2, 2026.

Similar to previous Indiana amnesty programs, in exchange for coming forward and paying outstanding taxes owed, the state agrees will:

1. abate and not seek to collect any interest, penalties, collection fees, or costs that would otherwise be applicable;
2. release any liens imposed;
3. not seek civil or criminal prosecution against any individual or entity; and
4. not issue, or if issued, withdraw any assessment, demand notice, or warrant for payment.

To qualify for the amnesty program, a taxpayer must not have participated in a previous amnesty program in Indiana. The amnesty provisions in the budget bill would likewise require taxpayers participating in the amnesty to agree to a prohibition on participation in any future Indiana tax amnesty programs.

To start preparing for amnesty, taxpayers should compile a list of open Indiana state tax issues to evaluate amnesty eligibility and identify any liabilities that could be resolved during the amnesty window. These potential liabilities should then be analyzed to determine if participating in the amnesty program would be more advantageous than an alternative path. If any potential liabilities are identified for which it would be beneficial to pursue amnesty, taxpayers should gather the documentation required, including returns, workpapers, notices, and proof of payments. If there are any questions about readiness or participation, Reed Smith would be happy to assist with tailoring a readiness checklist and data request list specific to your Indiana tax footprint so that your company is prepared to act immediately once the amnesty period begins.

1. HB 1001 (In. 2025)