Indiana no longer allows the insulation deduction effective tax year 2016. However, if you are filing a return for tax year 2015, you may still claim the deduction on the 2015 return.
You can enter this deduction within your prior year return by following the steps below:
- Prior Year
- Access 2015 Return
- State Section
- Subtractions from Income
- Insulation Deduction
You may be able to take this deduction if you installed new insulation in your Indiana home during a prior tax year.
Insulation includes weather stripping, double pane windows, storm doors and storm windows. To take this deduction the following requirements must be met:
- The insulating items must have been installed in your principal place of residence located in Indiana.
- The part of your home where the insulating items were installed must have been built before January 1, 2011.
- The insulating items must be an upgrade and not a replacement or like-kind item (e.g. replacing a double pane window with a new double pane window does not qualify, but replacing a double pane window with a triple pane window does qualify), and
- The deduction must be taken in the year the insulating items were installed.
You are allowed to deduct the actual cost of qualifying items, including labor, up to a maximum of $1,000.
IMPORTANT: When claiming this deduction, maintain with your records the following information (as the department can require you to provide this information at a later date):
- Item(s) purchased
- Purchase price
- Place of purchase
- Date of purchase
- Date of installation
- Amount paid for labor (you cannot include the cost of labor that you did yourself)
For more information about this deduction, see Income Tax Information Bulletin #43.