How to do a hanging indent in Google docs:

1.  Works Cited page - Put your cursor at the beginning of the fiirst line of the source. 

2.  Find the ruler along the top of your document.  Click and drag blue arrow and blue bar to 0.50 indent the line. 

3.  Then click on the top part of the arrow (a small rectangle) and drag it back to the zero point on the ruler.

4.  This also works for paragraphs.