Overview

Indiana has enacted a tax amnesty program offering taxpayers a limited window to resolve outstanding state tax liabilities. From July 15, 2026, through September 9, 2026, taxpayers have an opportunity to pay past-due, eligible taxes and receive a waiver of related penalties, interest, and collection fees.

Eligible Tax Liabilities

The program covers unpaid “listed tax” liabilities for tax periods ending before January 1, 2024. A liability is “due and payable” if the Department has (1) issued an assessment or demand for payment, (2) the taxpayer has filed a return reporting the liability, or (3) the taxpayer has filed a written statement of liability satisfactory to the Department. Notably, this third pathway allows taxpayers to self-report liabilities, making the program function as a voluntary disclosure opportunity.

Ineligible Taxpayers

The statute excludes certain taxpayers such as if the taxpayer has wagering tax liabilities arising from noncompliance with Indiana’s add-back requirement (Ind. Code § 6-3-1-3.5(b)(3)); had participated in any previous Indiana amnesty program; or pled guilty to or been convicted of fraud.

Benefits of Participation

Upon full payment of listed taxes due (or entry into an acceptable payment plan) and compliance with amnesty conditions, the Department will abate all interest, penalties, collection fees, and costs; release any liens; refrain from civil or criminal prosecution; and withdraw any outstanding assessments, demand notices, or warrants.

NOTE: Failure to participate in amnesty could subject a taxpayer to enhanced penalties equal to the sum of all other applicable penalties—effectively doubling penalty exposure. However, exceptions may apply, including where the taxpayers filed a timely Tax Court petition, have an existing hold due to audit or bankruptcy, or can demonstrate that they never received notice of the liability. Additionally, a failure to pay all taxes due for a period invalidates the amnesty for that period.

Key Takeaways

The combination of full penalty and interest relief, lien releases, and prosecution protection makes this program highly attractive. The compressed timeframe and enhanced penalties for non-participation make prompt evaluation essential. Companies with Indiana tax nexus should assess whether they have unreported or underreported liabilities for periods ending before January 1, 2024.

Newsflash 2026-131