• Law Enforcement Reward Deduction;
• Airport Development Zone Deduction;
• Medical Savings Account Deduction.

Law Enforcement Reward Deduction
If you reported an amount you received as a reward as "other income" on line 21 of your federal Form 1040, you may be eligible for this deduction.

If you received a reward for providing information to a law enforcement official or agency; if the information assisted in the arrest, indictment, or the filing of charges against a person; and if you are not compensated for investigating crimes, the person convicted of the crime or the victim of the crime; then you can deduct the lesser of the amount received or $1,000.

Airport Development Zone Deduction
Certain areas within Indiana have been designated as airport development zones. Currently, zones are established within the City of Gary. Areas within the City of Terre Haute and Allen County are also eligible to designate zones. If you lived in an airport development zone and worked for a qualified employer in that zone you may be able to take this deduction.

Your employer will provide you with Form IT-40QEC if you are eligible to claim this deduction. The amount of the deduction is one-half () of the earned income shown on that form or $7,500, whichever is less. Form IT-40QEC must be attached to the Form IT-40.

For additional information about this deduction, contact your employer to see if youre working in an established airport development zone.

Medical Savings Account Deduction
You may be eligible for a deduction if your employer deposited funds in certain medical care savings accounts. If you received Form IN-MSA from the account provider you should deduct any medical withdrawals and exempt interest income reported in Box 2 and/or Box 7.

Note: You are not eligible to claim this deduction if you also claimed a medical savings account deduction on the front page of federal Form 1040.

Make sure you attach Form IN-MSA or your claimed deduction will be denied.

Back