Schedule D (IT‑40 PNR), labeled “Exemptions,” is the specific Indiana form used by nonresidents and part‑year residents to calculate their total allowable exemption amount for Form IT‑40PNR. This schedule consolidates personal exemptions for you and your spouse, standard exemptions for dependents listed on Schedule IN‑DEP, additional exemptions for qualifying children (based on age or student status), extra exemptions for being age 65 or older and/or blind, and special exemptions for additional adopted children from Schedule IN‑DEP‑A. Crucially, after summing these exemption amounts on line 7, the form requires you to multiply the total by your Indiana proration percentage (from Schedule A, line 21D) on lines 8 and 9, ensuring that your final exemption deduction on the IT‑40PNR is proportional to your Indiana‑sourced income. It serves as Enclosure Sequence No. 04 and must always be filed with the supporting Schedule IN‑DEP if you claim dependents.
How to Complete Schedule D (IT-40 PNR)
Heading And Identification Area
Start by filling out the header to ensure the schedule is properly linked to your return.
- Name(s) Shown On Form IT‑40PNR
Enter your full name (and your spouse’s name if filing jointly) exactly as shown on the front of your IT‑40PNR. - Your Social Security Number
Write the primary taxpayer’s Social Security number just as it appears on the main return.
Remember to round all entries to whole dollars as noted at the top of the form.
Line 1 – Personal Exemption
Line 1 establishes the basic personal exemption for the taxpayer(s).
- If you are filing as married filing jointly, enter 2,000 dollars.
- For all other filing statuses (single, married filing separately, etc.), enter 1,000 dollars.
This amount provides the base exemption for you and your spouse (if applicable).
Line 2 – Dependent Exemption
Line 2 calculates the standard exemption for your dependents.
- Check Schedule IN‑DEP, Box 5, to find the number of dependents you are claiming.
- Multiply that number by 1,000 dollars.
- Enter the total on line 2, rounded to whole dollars.
- Note: You must enclose Schedule IN‑DEP if you claim any amount on this line.
This gives you a standard exemption for each dependent listed on your supporting schedule.
Line 3 – Additional Dependent Child Exemption
Line 3 allows an extra exemption for certain qualifying children.
- You may claim this additional exemption for a dependent child who is your son, stepson, daughter, stepdaughter, foster child, or a child under your legal guardianship AND meets one of these age criteria:
- Was under age 19 by December 31, 2025, OR
- Was a full‑time student under age 24 by December 31, 2025.
- Look at Schedule IN‑DEP, Box 6, to find the number of dependents who meet these specific qualifications.
- Multiply that number by 1,500 dollars.
- Enter the resulting amount on line 3, in whole dollars.
This provides added tax relief for families with qualifying young or student children.
Line 4 – Age 65+ Or Blindness Exemption
Line 4 offers extra exemptions if you or your spouse are age 65 or older and/or blind.
- Place an “X” in the appropriate box(es) if, by December 31, 2025:
- You were age 65 or older.
- You were blind.
- Spouse was age 65 or older.
- Spouse was blind.
- Count the total number of boxes you marked with an “X”.
- Multiply that total number by 1,000 dollars.
- Enter the result on line 4, rounded to the nearest dollar.
This line acknowledges the additional costs often associated with age or blindness.
Line 5 – Additional Age 65+ Income-Limited Exemption
Line 5 provides a further exemption for taxpayers age 65 or older who meet specific income limits.
- First, find your income amount from Schedule A, line 36A.
- If you are married filing separately: Place an “X” in the “You were age 65 or older” box below line 5 only if that income amount is less than 20,000 dollars.
- For all other filers: Place an “X” in the appropriate box(es) for you and/or your spouse (if age 65 or older) only if the income amount from Schedule A, line 36A is less than 40,000 dollars.
- Count the total number of boxes marked with an “X”.
- Multiply that count by 500 dollars.
- Enter the total on line 5, in whole dollars.
This exemption targets lower‑income seniors with additional support.
Line 6 – Additional Adopted Child Exemption
Line 6 gives an exemption for additional adopted children.
- Check Schedule IN‑DEP‑A, Box 6, for the number of additional adopted child exemptions you are claiming.
- Multiply that number by 3,000 dollars.
- Enter the total on line 6, rounded to whole dollars.
- Note: You must enclose Schedule IN‑DEP‑A if you use this line.
This supports families who have adopted children meeting the specific state criteria.
Line 7 – Total Exemptions Before Proration
Line 7 sums up all the exemptions calculated so far.
- Add the amounts from lines 1 through 6.
- Enter the grand total on line 7.
This figure represents your total potential exemptions before adjusting for your nonresident or part‑year status.
Line 8 – Proration Percentage
Line 8 applies the proration factor calculated earlier in your return
- Enter the decimal number from Schedule A, Proration Section, line 21D.
- This number represents the percentage of your total income that is taxable by Indiana.
Line 9 – Total Exemptions And Transfer To IT-40PNR
Line 9 calculates the final exemption amount you can claim.
- Multiply the total on line 7 by the proration percentage on line 8.
- Enter the result on line 9, labeled “Total Exemptions,” rounded to whole dollars.
- Transfer this final figure to Form IT‑40PNR, line 6, as instructed.
Once completed, verify your name and SSN are correct and attach Schedule D (along with any required Schedules IN‑DEP or IN‑DEP‑A) as Enclosure Sequence No. 04.