CHAPTER 3. CREDITS
IC 6-3-3
Chapter 3. Credits
IC 6-3-3-1
Amounts deducted and withheld
Sec. 1. The amount deducted and withheld as tax under
IC 6-3-4-8, IC 6-3-4-12, and IC 6-3-4-13 during any taxable year
shall be allowed as a credit to the taxpayer against the tax imposed
on him by IC 6-3-2.
(Formerly: Acts 1963(ss), c.32, s.301; Acts 1965, c.233, s.15.) As
amended by P.L.2-1988, SEC.8.
IC 6-3-3-2
Repealed
(Repealed by P.L.192-2002(ss), SEC.191.)
IC 6-3-3-3
Taxes paid to other states
Sec. 3. (a) Whenever a resident person has become liable for tax
to another state upon all or any part of his income for a taxable year
derived from sources without this state and subject to taxation under
IC 6-3-2, the amount of tax paid by him to the other state shall be
credited against the amount of the tax payable by him. Such credit
shall be allowed upon the production to the department of
satisfactory evidence of the fact of such payment, except that such
application for credit shall not operate to reduce the tax payable
under IC 6-3-2 to an amount less than would have been payable were
the income from the other state ignored. The credit provided for by
this subsection shall not be granted to a taxpayer when the laws of
the other state, under which the adjusted gross income in question is
subject to taxation, provides for a credit to the taxpayer substantially
similar to that granted by subsection (b).
(b) Whenever a nonresident person has become liable for tax to
the state where he resides upon his income for the taxable year
derived from sources within this state and subject to taxation under
IC 6-3-2, the proportion of tax paid by him to the state where he
resides that his income subject to taxation under IC 6-3-2 bears to his
income upon which the tax so payable to the other state was imposed
shall be credited against the tax payable by him under IC 6-3-2, but
only if the laws of the other state grant a substantially similar credit
to residents of this state subject to income tax under the laws of such
other state, or impose a tax upon the income of its residents derived
from sources in this state and exempt from taxation the income of
residents of this state. No credit shall be allowed against the amount
of the tax on any adjusted gross income taxable under IC 6-3-2 that
is exempt from taxation under the laws of the other state.
(Formerly: Acts 1963(ss), c.32, s.303.) As amended by P.L.2-1988,
SEC.10.
IC 6-3-3-4
(Repealed by Acts 1977, P.L.78, SEC.6.)
IC 6-3-3-4.1
Repealed
(Repealed by Acts 1981, P.L.25, SEC.9.)
IC 6-3-3-5
Credit; charitable contribution; postsecondary educational
institutions; educational foundations
Sec. 5. (a) At the election of the taxpayer, there shall be allowed,
as a credit against the adjusted gross income tax imposed by IC 6-3-1
through IC 6-3-7 for the taxable year, an amount (subject to the
applicable limitations provided by this section) equal to fifty percent
(50%) of the aggregate amount of charitable contributions made by
such taxpayer during such year to postsecondary educational
institutions located within Indiana (including any of its associated
colleges in Indiana) or to any corporation or foundation organized
and operated solely for the benefit of any postsecondary educational
institution.
(b) In the case of a taxpayer other than a corporation, the amount
allowable as a credit under this section for any taxable year shall not
exceed one hundred dollars ($100) in the case of a single return or
two hundred dollars ($200) in the case of a joint return.
(c) In the case of a corporation, the amount allowable as a credit
under this section for any taxable year shall not exceed:
(1) ten percent (10%) of such corporation's total adjusted gross
income tax under IC 6-3-1 through IC 6-3-7 for such year (as
determined without regard to any credits against that tax); or
(2) one thousand dollars ($1,000);
whichever is less.
(d) A charitable contribution in Indiana qualifies for a credit under
this section only if the charitable contribution is made to a
postsecondary educational institution or a corporation or foundation
organized for the benefit of a postsecondary educational institution
that:
(1) normally maintains a regular faculty and curriculum and
normally has a regularly organized body of students in
attendance at the place where its educational activities are
carried on;
(2) regularly offers education at a level above the twelfth grade;
(3) regularly awards either associate, bachelors, masters, or
doctoral degrees, or any combination thereof; and
(4) is duly accredited by the North Central Association of
Colleges and Schools, the Indiana state board of education, or
the American Association of Theological Schools.
(e) The credit allowed by this section shall not exceed the amount
of the adjusted gross income tax imposed by IC 6-3-1 through
IC 6-3-7 for the taxable year, reduced by the sum of all credits (as
determined without regard to this section) allowed by IC 6-3-1
through IC 6-3-7.
(Formerly: Acts 1963(ss), c.32, s.305; Acts 1967, c.201, s.1; Acts
1969, c.326, s.4; Acts 1971, P.L.64, SEC.8.) As amended by Acts
1978, P.L.45, SEC.1; Acts 1981, P.L.77, SEC.10; P.L.20-1984,
SEC.4; P.L.66-1988, SEC.1; P.L.5-1995, SEC.6; P.L.1-2003,
SEC.33; P.L.269-2003, SEC.6; P.L.2-2007, SEC.121.
IC 6-3-3-5.1
Credit; charitable contribution; twenty-first century scholars
program support fund
Sec. 5.1. (a) At the election of the taxpayer, a credit against the
adjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7 for
the taxable year, is permitted in an amount (subject to the applicable
limitations provided by this section) equal to fifty percent (50%) of
the aggregate amount of contributions made by the taxpayer during
the taxable year to the twenty-first century scholars program support
fund established under IC 21-12-7-1.
(b) In the case of a taxpayer other than a corporation, the amount
allowable as a credit under this section for any taxable year may not
exceed:
(1) one hundred dollars ($100) in the case of a single return; or
(2) two hundred dollars ($200) in the case of a joint return.
(c) In the case of a taxpayer that is a corporation, the amount
allowable as a credit under this section for any taxable year may not
exceed the lesser of the following amounts:
(1) Ten percent (10%) of the corporation's total adjusted gross
income tax under IC 6-3-1 through IC 6-3-7 for the taxable year
(as determined without regard to any credits against that tax).
(2) One thousand dollars ($1,000).
(d) The credit permitted under this section may not exceed the
amount of the adjusted gross income tax imposed by IC 6-3-1
through IC 6-3-7 for the taxable year, reduced by the sum of all
credits (as determined without regard to this section) allowed by
IC 6-3-1 through IC 6-3-7.
As added by P.L.56-1990, SEC.1. Amended by P.L.1-2003, SEC.34;
P.L.269-2003, SEC.7; P.L.2-2007, SEC.122.
IC 6-3-3-6
Repealed
(Repealed by Acts 1981, P.L.25, SEC.9.)
IC 6-3-3-7
Repealed
(Repealed by P.L.96-1989, SEC.25.)
IC 6-3-3-8
Repealed
(Repealed by Acts 1981, P.L.25, SEC.9.)
IC 6-3-3-9
Unified tax credit for the elderly
Sec. 9. (a) The credit provided by this section shall be known as
the unified tax credit for the elderly.
(b) As used in this section, unless the context clearly indicates
otherwise:
(1) "Household federal adjusted gross income" means the total
adjusted gross income, as defined in Section 62 of the Internal
Revenue Code, of an individual, or of an individual and his
spouse if they reside together for the taxable year for which the
credit provided by this section is claimed.
(2) "Household" means a claimant or, if applicable, a claimant
and his or her spouse if the spouse resides with the claimant and
"household income" means the income of the claimant or, if
applicable, the combined income of the claimant and his or her
spouse if the spouse resides with the claimant.
(3) "Claimant" means an individual, other than an individual
described in subsection (c) of this section, who:
(A) has filed a claim under this section;
(B) was a resident of this state for at least six (6) months
during the taxable year for which he or she has filed a claim
under this section; and
(C) was sixty-five (65) years of age during some portion of
the taxable year for which he has filed a claim under this
section or whose spouse was either sixty-five (65) years of
age or over during the taxable year.
(c) The credit provided under this section shall not apply to an
individual who, for a period of at least one hundred eighty (180) days
during the taxable year for which he has filed a claim under this
section, was incarcerated in a local, state, or federal correctional
institution.
(d) The right to file a claim under this section shall be personal to
the claimant and shall not survive his death, except that a surviving
spouse of a claimant is entitled to claim the credit provided by this
section. For purposes of determining the amount of the credit a
surviving spouse is entitled to claim under this section, the deceased
spouse shall be treated as having been alive on the last day of the
taxable year in which the deceased spouse died. When a claimant
dies after having filed a timely claim, the amount thereof shall be
disbursed to another member of the household as determined by the
commissioner. If the claimant was the only member of his household,
the claim may be paid to his executor or administrator, but if neither
is appointed and qualified within two (2) years of the filing of the
claim, the amount of the claim shall escheat to the state.
(e) For each taxable year, subject to the limitations provided in
this section, one (1) claimant per household may claim, as a credit
against Indiana adjusted gross income taxes otherwise due, the credit
provided by this section. If the allowable amount of the claim
exceeds the income taxes otherwise due on the claimant's household
income or if there are no Indiana income taxes due on such income,
the amount of the claim not used as an offset against income taxes
after audit by the department, at the taxpayer's option, shall be
refunded to the claimant or taken as a credit against such taxpayer's
income tax liability subsequently due.
(f) No claim filed pursuant to this section shall be allowed unless
filed within six (6) months following the close of claimant's taxable
year or within the extension period if an extension of time for filing
the return has been granted under IC 6-8.1-6-1, whichever is later.
(g) The amount of any claim otherwise payable under this section
may be applied by the department against any liability outstanding
on the books of the department against the claimant, or against any
other individual who was a member of his household in the taxable
year to which the claim relates.
(h) The amount of a claim filed pursuant to this section by a
claimant that either (i) does not reside with his spouse during the
taxable year, or (ii) resides with his spouse during the taxable year
and only one (1) of them is sixty-five (65) years of age or older at the
end of the taxable year, shall be determined in accordance with the
following schedule:
HOUSEHOLD FEDERAL
ADJUSTED GROSS INCOME
FOR TAXABLE YEAR CREDIT
less than $1,000 $100
at least $1,000, but less than $3,000 $ 50
at least $3,000, but less than $10,000 $ 40
(i) The amount of a claim filed pursuant to this section by a
claimant that resides with his spouse during his taxable year shall be
determined in accordance with the following schedule if both the
claimant and spouse are sixty-five (65) years of age or older at the
end of the taxable year:
HOUSEHOLD FEDERAL
ADJUSTED GROSS INCOME
FOR TAXABLE YEAR CREDIT
less than $1,000 $140
at least $1,000, but less than $3,000 $ 90
at least $3,000, but less than $10,000 $ 80
(j) The department may promulgate reasonable rules under
IC 4-22-2 for the administration of this section.
(k) Every claimant under this section shall supply to the
department on forms provided under IC 6-8.1-3-4, in support of his
claim, reasonable proof of household income and age.
(l) Whenever on the audit of any claim filed under this section the
department finds that the amount of the claim has been incorrectly
determined, the department shall redetermine the claim and notify
the claimant of the redetermination and the reasons therefor. The
redetermination shall be final.
(m) In any case in which it is determined that a claim is or was
excessive and was filed with fraudulent intent, the claim shall be
disallowed in full, and, if the claim has been paid or a credit has been
allowed against income taxes otherwise payable, the credit shall be
canceled and the amount paid shall be recovered by assessment as
income taxes are assessed and such assessment shall bear interest
from the date of payment or credit of the claim, until refunded or
paid at the rate determined under IC 6-8.1-10-1. The claimant in such
a case commits a Class A misdemeanor. In any case in which it is
determined that a claim is or was excessive and was negligently
prepared, ten percent (10%) of the corrected claim shall be
disallowed and, if the claim has been paid or credited against income
taxes otherwise payable, the credit shall be reduced or canceled, and
the proper portion of any amount paid shall be similarly recovered by
assessment as income taxes are assessed, and such assessment shall
bear interest at the rate determined under IC 6-8.1-10-1 from the date
of payment until refunded or paid.
As added by Acts 1982, P.L.6, SEC.5. Amended by P.L.83-1983,
SEC.1; P.L.73-1985, SEC.2.
IC 6-3-3-10
Enterprise zone employers; credit; employment expenditures
Sec. 10. (a) As used in this section:
"Base period wages" means the following:
(1) In the case of a taxpayer other than a pass through entity,
wages paid or payable by a taxpayer to its employees during the
year that ends on the last day of the month that immediately
precedes the month in which an enterprise zone is established,
to the extent that the wages would have been qualified wages if
the enterprise zone had been in effect for that year. If the
taxpayer did not engage in an active trade or business during
that year in the area that is later designated as an enterprise
zone, then the base period wages equal zero (0). If the taxpayer
engaged in an active trade or business during only part of that
year in an area that is later designated as an enterprise zone,
then the department shall determine the amount of base period
wages.
(2) In the case of a taxpayer that is a pass through entity, base
period wages equal zero (0).
"Enterprise zone" means an enterprise zone created under
IC 5-28-15.
"Enterprise zone adjusted gross income" means adjusted gross
income of a taxpayer that is derived from sources within an
enterprise zone. Sources of adjusted gross income shall be
determined with respect to an enterprise zone, to the extent possible,
in the same manner that sources of adjusted gross income are
determined with respect to the state of Indiana under IC 6-3-2-2.
"Enterprise zone gross income" means gross income of a taxpayer
that is derived from sources within an enterprise zone.
"Enterprise zone insurance premiums" means insurance premiums
derived from sources within an enterprise zone.
"Monthly base period wages" means base period wages divided
by twelve (12).
"Qualified employee" means an individual who is employed by a
taxpayer and who:
(1) has the individual's principal place of residence in the
enterprise zone in which the individual is employed;
(2) performs services for the taxpayer, ninety percent (90%) of
which are directly related to the conduct of the taxpayer's trade
or business that is located in an enterprise zone;
(3) performs at least fifty percent (50%) of the individual's
services for the taxpayer during the taxable year in the
enterprise zone; and
(4) in the case of an individual who is employed by a taxpayer
that is a pass through entity, was first employed by the taxpayer
after December 31, 1998.
"Qualified increased employment expenditures" means the
following:
(1) For a taxpayer's taxable year other than the taxpayer's
taxable year in which the enterprise zone is established, the
amount by which qualified wages paid or payable by the
taxpayer during the taxable year to qualified employees exceeds
the taxpayer's base period wages.
(2) For the taxpayer's taxable year in which the enterprise zone
is established, the amount by which qualified wages paid or
payable by the taxpayer during all of the full calendar months
in the taxpayer's taxable year that succeed the date on which the
enterprise zone was established exceed the taxpayer's monthly
base period wages multiplied by that same number of full
calendar months.
"Qualified state tax liability" means a taxpayer's total income tax
liability incurred under:
(1) IC 6-3-1 through IC 6-3-7 (adjusted gross income tax) with
respect to enterprise zone adjusted gross income;
(2) IC 27-1-18-2 (insurance premiums tax) with respect to
enterprise zone insurance premiums; and
(3) IC 6-5.5 (the financial institutions tax);
as computed after the application of the credits that, under
IC 6-3.1-1-2, are to be applied before the credit provided by this
section.
"Qualified wages" means the wages paid or payable to qualified
employees during a taxable year.
"Taxpayer" includes a pass through entity.
(b) A taxpayer is entitled to a credit against the taxpayer's
qualified state tax liability for a taxable year in the amount of the
lesser of:
(1) the product of ten percent (10%) multiplied by the qualified
increased employment expenditures of the taxpayer for the
taxable year; or
(2) one thousand five hundred dollars ($1,500) multiplied by
the number of qualified employees employed by the taxpayer
during the taxable year.
(c) The amount of the credit provided by this section that a
taxpayer uses during a particular taxable year may not exceed the
taxpayer's qualified state tax liability for the taxable year. If the
credit provided by this section exceeds the amount of that tax
liability for the taxable year it is first claimed, then the excess may
be carried back to preceding taxable years or carried over to
succeeding taxable years and used as a credit against the taxpayer's
qualified state tax liability for those taxable years. Each time that the
credit is carried back to a preceding taxable year or carried over to a
succeeding taxable year, the amount of the carryover is reduced by
the amount used as a credit for that taxable year. Except as provided
in subsection (e), the credit provided by this section may be carried
forward and applied in the ten (10) taxable years that succeed the
taxable year in which the credit accrues. The credit provided by this
section may be carried back and applied in the three (3) taxable years
that precede the taxable year in which the credit accrues.
(d) A credit earned by a taxpayer in a particular taxable year shall
be applied against the taxpayer's qualified state tax liability for that
taxable year before any credit carryover or carryback is applied
against that liability under subsection (c).
(e) Notwithstanding subsection (c), if a credit under this section
results from wages paid in a particular enterprise zone, and if that
enterprise zone terminates in a taxable year that succeeds the last
taxable year in which a taxpayer is entitled to use the credit carryover
that results from those wages under subsection (c), then the taxpayer
may use the credit carryover for any taxable year up to and including
the taxable year in which the enterprise zone terminates.
(f) A taxpayer is not entitled to a refund of any unused credit.
(g) A taxpayer that:
(1) does not own, rent, or lease real property outside of an
enterprise zone that is an integral part of its trade or business;
and
(2) is not owned or controlled directly or indirectly by a
taxpayer that owns, rents, or leases real property outside of an
enterprise zone;
is exempt from the allocation and apportionment provisions of this
section.
(h) If a pass through entity is entitled to a credit under subsection
(b) but does not have state tax liability against which the tax credit
may be applied, an individual who is a shareholder, partner,
beneficiary, or member of the pass through entity is entitled to a tax
credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, beneficiary, or
member is entitled.
The credit provided under this subsection is in addition to a tax credit
to which a shareholder, partner, beneficiary, or member of a pass
through entity is entitled. However, a pass through entity and an
individual who is a shareholder, partner, beneficiary, or member of
a pass through entity may not claim more than one (1) credit for the
qualified expenditure.
As added by P.L.23-1983, SEC.12. Amended by P.L.9-1986, SEC.6;
P.L.347-1989(ss), SEC.9; P.L.120-1999, SEC.3; P.L.14-2000,
SEC.17; P.L.1-2003, SEC.35; P.L.269-2003, SEC.8; P.L.4-2005,
SEC.50; P.L.182-2009(ss), SEC.197.
IC 6-3-3-12
Credit for contributions to college choice education savings plan;
repayment of credit after nonqualified withdrawals
Sec. 12. (a) As used in this section, "account" has the meaning set
forth in IC 21-9-2-2.
(b) As used in this section, "account beneficiary" has the meaning
set forth in IC 21-9-2-3.
(c) As used in this section, "account owner" has the meaning set
forth in IC 21-9-2-4.
(d) As used in this section, "college choice 529 education savings
plan" refers to a college choice 529 investment plan established
under IC 21-9.
(e) As used in this section, "contribution" means the amount of
money directly provided to a college choice 529 education savings
plan account by a taxpayer. A contribution does not include any of
the following:
(1) Money credited to an account as a result of bonus points or
other forms of consideration earned by the taxpayer that result
in a transfer of money to the account.
(2) Money transferred from any other qualified tuition program
under Section 529 of the Internal Revenue Code or from any
other similar plan.
(f) As used in this section, "nonqualified withdrawal" means a
withdrawal or distribution from a college choice 529 education
savings plan that is not a qualified withdrawal.
(g) As used in this section, "qualified higher education expenses"
has the meaning set forth in IC 21-9-2-19.5.
(h) As used in this section, "qualified withdrawal" means a
withdrawal or distribution from a college choice 529 education
savings plan that is made:
(1) to pay for qualified higher education expenses, excluding
any withdrawals or distributions used to pay for qualified higher
education expenses if the withdrawals or distributions are made
from an account of a college choice 529 education savings plan
that is terminated within twelve (12) months after the account
is opened;
(2) as a result of the death or disability of an account
beneficiary;
(3) because an account beneficiary received a scholarship that
paid for all or part of the qualified higher education expenses of
the account beneficiary, to the extent that the withdrawal or
distribution does not exceed the amount of the scholarship; or
(4) by a college choice 529 education savings plan as the result
of a transfer of funds by a college choice 529 education savings
plan from one (1) third party custodian to another.
A qualified withdrawal does not include a rollover distribution or
transfer of assets from a college choice 529 education savings plan
to any other qualified tuition program under Section 529 of the
Internal Revenue Code or to any other similar plan.
(i) As used in this section, "taxpayer" means:
(1) an individual filing a single return; or
(2) a married couple filing a joint return.
(j) A taxpayer is entitled to a credit against the taxpayer's adjusted
gross income tax imposed by IC 6-3-1 through IC 6-3-7 for a taxable
year equal to the least of the following:
(1) Twenty percent (20%) of the amount of the total
contributions made by the taxpayer to an account or accounts of
a college choice 529 education savings plan during the taxable
year.
(2) One thousand dollars ($1,000).
(3) The amount of the taxpayer's adjusted gross income tax
imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
reduced by the sum of all credits (as determined without regard
to this section) allowed by IC 6-3-1 through IC 6-3-7.
(k) A taxpayer is not entitled to a carryback, carryover, or refund
of an unused credit.
(l) A taxpayer may not sell, assign, convey, or otherwise transfer
the tax credit provided by this section.
(m) To receive the credit provided by this section, a taxpayer must
claim the credit on the taxpayer's annual state tax return or returns in
the manner prescribed by the department. The taxpayer shall submit
to the department all information that the department determines is
necessary for the calculation of the credit provided by this section.
(n) An account owner of an account of a college choice 529
education savings plan must repay all or a part of the credit in a
taxable year in which any nonqualified withdrawal is made from the
account. The amount the taxpayer must repay is equal to the lesser
of:
(1) twenty percent (20%) of the total amount of nonqualified
withdrawals made during the taxable year from the account; or
(2) the excess of:
(A) the cumulative amount of all credits provided by this
section that are claimed by any taxpayer with respect to the
taxpayer's contributions to the account for all prior taxable
years beginning on or after January 1, 2007; over
(B) the cumulative amount of repayments paid by the
account owner under this subsection for all prior taxable
years beginning on or after January 1, 2008.
(o) Any required repayment under subsection (o) shall be reported
by the account owner on the account owner's annual state income tax
return for any taxable year in which a nonqualified withdrawal is
made.
(p) A nonresident account owner who is not required to file an
annual income tax return for a taxable year in which a nonqualified
withdrawal is made shall make any required repayment on the form
required under IC 6-3-4-1(2). If the nonresident account owner does
not make the required repayment, the department shall issue a
demand notice in accordance with IC 6-8.1-5-1.
(q) The executive director of the Indiana education savings
authority shall submit or cause to be submitted to the department a
copy of all information returns or statements issued to account
owners, account beneficiaries, and other taxpayers for each taxable
year with respect to:
(1) nonqualified withdrawals made from accounts of a college
choice 529 education savings plan for the taxable year; or
(2) account closings for the taxable year.
As added by P.L.192-2006, SEC.4. Amended by P.L.211-2007,
SEC.22; P.L.131-2008, SEC.13; P.L.182-2009(ss), SEC.198.