Introduced Version
HOUSE BILL No. 1252
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3-1-3.5; IC 20-52.
Synopsis: Education enrichment accounts. Defines an "enrichment
student" as an individual who: (1) has legal settlement in Indiana; (2)
was a student in grades 3 through 8 during the 2021-2022 school year;
and (3) scored either "below proficiency" or "approaching proficiency"
on the statewide assessment Indiana Learning Evaluation Readiness
Network (ILEARN) program, administered during the 2021-2022
school year. Establishes the Indiana student enrichment grant program
(program). Provides that an enrichment student is eligible to establish
an Indiana enrichment scholarship account. Provides that an
enrichment student may receive $1,000 to be used for certain qualified
expenses. Establishes the student enrichment grant fund. Provides that
the department of education shall administer the program and student
enrichment grant fund.
Effective: Upon passage.
Behning
January 6, 2022, read first time and referred to Committee on Education.
2022 IN 1252—LS 7167/DI 116 Introduced
Second Regular Session of the 122nd General Assembly (2022)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2021 Regular Session of the General Assembly.
HOUSE BILL No. 1252
A BILL FOR AN ACT to amend the Indiana Code concerning
education.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.159-2021,
2 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 UPON PASSAGE]: Sec. 3.5. When used in this article, the term
4 "adjusted gross income" shall mean the following:
5 (a) In the case of all individuals, "adjusted gross income" (as
6 defined in Section 62 of the Internal Revenue Code), modified as
7 follows:
8 (1) Subtract income that is exempt from taxation under this article
9 by the Constitution and statutes of the United States.
10 (2) Except as provided in subsection (c), add an amount equal to
11 any deduction or deductions allowed or allowable pursuant to
12 Section 62 of the Internal Revenue Code for taxes based on or
13 measured by income and levied at the state level by any state of
14 the United States.
15 (3) Subtract one thousand dollars ($1,000), or in the case of a
16 joint return filed by a husband and wife, subtract for each spouse
17 one thousand dollars ($1,000).
2022 IN 1252—LS 7167/DI 116 2
1 (4) Subtract one thousand dollars ($1,000) for:
2 (A) each of the exemptions provided by Section 151(c) of the
3 Internal Revenue Code (as effective January 1, 2017);
4 (B) each additional amount allowable under Section 63(f) of
5 the Internal Revenue Code; and
6 (C) the spouse of the taxpayer if a separate return is made by
7 the taxpayer and if the spouse, for the calendar year in which
8 the taxable year of the taxpayer begins, has no gross income
9 and is not the dependent of another taxpayer.
10 (5) Subtract:
11 (A) one thousand five hundred dollars ($1,500) for each of the
12 exemptions allowed under Section 151(c)(1)(B) of the Internal
13 Revenue Code (as effective January 1, 2004);
14 (B) one thousand five hundred dollars ($1,500) for each
15 exemption allowed under Section 151(c) of the Internal
16 Revenue Code (as effective January 1, 2017) for an individual:
17 (i) who is less than nineteen (19) years of age or is a
18 full-time student who is less than twenty-four (24) years of
19 age;
20 (ii) for whom the taxpayer is the legal guardian; and
21 (iii) for whom the taxpayer does not claim an exemption
22 under clause (A); and
23 (C) five hundred dollars ($500) for each additional amount
24 allowable under Section 63(f)(1) of the Internal Revenue Code
25 if the federal adjusted gross income of the taxpayer, or the
26 taxpayer and the taxpayer's spouse in the case of a joint return,
27 is less than forty thousand dollars ($40,000). In the case of a
28 married individual filing a separate return, the qualifying
29 income amount in this clause is equal to twenty thousand
30 dollars ($20,000).
31 This amount is in addition to the amount subtracted under
32 subdivision (4).
33 (6) Subtract any amounts included in federal adjusted gross
34 income under Section 111 of the Internal Revenue Code as a
35 recovery of items previously deducted as an itemized deduction
36 from adjusted gross income.
37 (7) Subtract any amounts included in federal adjusted gross
38 income under the Internal Revenue Code which amounts were
39 received by the individual as supplemental railroad retirement
40 annuities under 45 U.S.C. 231 and which are not deductible under
41 subdivision (1).
42 (8) Subtract an amount equal to the amount of federal Social
2022 IN 1252—LS 7167/DI 116 3
1 Security and Railroad Retirement benefits included in a taxpayer's
2 federal gross income by Section 86 of the Internal Revenue Code.
3 (9) In the case of a nonresident taxpayer or a resident taxpayer
4 residing in Indiana for a period of less than the taxpayer's entire
5 taxable year, the total amount of the deductions allowed pursuant
6 to subdivisions (3), (4), and (5) shall be reduced to an amount
7 which bears the same ratio to the total as the taxpayer's income
8 taxable in Indiana bears to the taxpayer's total income.
9 (10) In the case of an individual who is a recipient of assistance
10 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
11 subtract an amount equal to that portion of the individual's
12 adjusted gross income with respect to which the individual is not
13 allowed under federal law to retain an amount to pay state and
14 local income taxes.
15 (11) In the case of an eligible individual, subtract the amount of
16 a Holocaust victim's settlement payment included in the
17 individual's federal adjusted gross income.
18 (12) Subtract an amount equal to the portion of any premiums
19 paid during the taxable year by the taxpayer for a qualified long
20 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
21 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
22 file a joint income tax return or the taxpayer is otherwise entitled
23 to a deduction under this subdivision for the taxpayer's spouse, or
24 both.
25 (13) Subtract an amount equal to the lesser of:
26 (A) two thousand five hundred dollars ($2,500), or one
27 thousand two hundred fifty dollars ($1,250) in the case of a
28 married individual filing a separate return; or
29 (B) the amount of property taxes that are paid during the
30 taxable year in Indiana by the individual on the individual's
31 principal place of residence.
32 (14) Subtract an amount equal to the amount of a September 11
33 terrorist attack settlement payment included in the individual's
34 federal adjusted gross income.
35 (15) Add or subtract the amount necessary to make the adjusted
36 gross income of any taxpayer that owns property for which bonus
37 depreciation was allowed in the current taxable year or in an
38 earlier taxable year equal to the amount of adjusted gross income
39 that would have been computed had an election not been made
40 under Section 168(k) of the Internal Revenue Code to apply bonus
41 depreciation to the property in the year that it was placed in
42 service.
2022 IN 1252—LS 7167/DI 116 4
1 (16) Add an amount equal to any deduction allowed under
2 Section 172 of the Internal Revenue Code (concerning net
3 operating losses).
4 (17) Add or subtract the amount necessary to make the adjusted
5 gross income of any taxpayer that placed Section 179 property (as
6 defined in Section 179 of the Internal Revenue Code) in service
7 in the current taxable year or in an earlier taxable year equal to
8 the amount of adjusted gross income that would have been
9 computed had an election for federal income tax purposes not
10 been made for the year in which the property was placed in
11 service to take deductions under Section 179 of the Internal
12 Revenue Code in a total amount exceeding the sum of:
13 (A) twenty-five thousand dollars ($25,000) to the extent
14 deductions under Section 179 of the Internal Revenue Code
15 were not elected as provided in clause (B); and
16 (B) for taxable years beginning after December 31, 2017, the
17 deductions elected under Section 179 of the Internal Revenue
18 Code on property acquired in an exchange if:
19 (i) the exchange would have been eligible for
20 nonrecognition of gain or loss under Section 1031 of the
21 Internal Revenue Code in effect on January 1, 2017;
22 (ii) the exchange is not eligible for nonrecognition of gain or
23 loss under Section 1031 of the Internal Revenue Code; and
24 (iii) the taxpayer made an election to take deductions under
25 Section 179 of the Internal Revenue Code with regard to the
26 acquired property in the year that the property was placed
27 into service.
28 The amount of deductions allowable for an item of property
29 under this clause may not exceed the amount of adjusted gross
30 income realized on the property that would have been deferred
31 under the Internal Revenue Code in effect on January 1, 2017.
32 (18) Subtract an amount equal to the amount of the taxpayer's
33 qualified military income that was not excluded from the
34 taxpayer's gross income for federal income tax purposes under
35 Section 112 of the Internal Revenue Code.
36 (19) Subtract income that is:
37 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
38 derived from patents); and
39 (B) included in the individual's federal adjusted gross income
40 under the Internal Revenue Code.
41 (20) Add an amount equal to any income not included in gross
42 income as a result of the deferral of income arising from business
2022 IN 1252—LS 7167/DI 116 5
1 indebtedness discharged in connection with the reacquisition after
2 December 31, 2008, and before January 1, 2011, of an applicable
3 debt instrument, as provided in Section 108(i) of the Internal
4 Revenue Code. Subtract the amount necessary from the adjusted
5 gross income of any taxpayer that added an amount to adjusted
6 gross income in a previous year to offset the amount included in
7 federal gross income as a result of the deferral of income arising
8 from business indebtedness discharged in connection with the
9 reacquisition after December 31, 2008, and before January 1,
10 2011, of an applicable debt instrument, as provided in Section
11 108(i) of the Internal Revenue Code.
12 (21) Add the amount excluded from federal gross income under
13 Section 103 of the Internal Revenue Code for interest received on
14 an obligation of a state other than Indiana, or a political
15 subdivision of such a state, that is acquired by the taxpayer after
16 December 31, 2011.
17 (22) Subtract an amount as described in Section 1341(a)(2) of the
18 Internal Revenue Code to the extent, if any, that the amount was
19 previously included in the taxpayer's adjusted gross income for a
20 prior taxable year.
21 (23) For taxable years beginning after December 25, 2016, add an
22 amount equal to the deduction for deferred foreign income that
23 was claimed by the taxpayer for the taxable year under Section
24 965(c) of the Internal Revenue Code.
25 (24) Subtract any interest expense paid or accrued in the current
26 taxable year but not deducted as a result of the limitation imposed
27 under Section 163(j)(1) of the Internal Revenue Code. Add any
28 interest expense paid or accrued in a previous taxable year but
29 allowed as a deduction under Section 163 of the Internal Revenue
30 Code in the current taxable year. For purposes of this subdivision,
31 an interest expense is considered paid or accrued only in the first
32 taxable year the deduction would have been allowable under
33 Section 163 of the Internal Revenue Code if the limitation under
34 Section 163(j)(1) of the Internal Revenue Code did not exist.
35 (25) Subtract the amount that would have been excluded from
36 gross income but for the enactment of Section 118(b)(2) of the
37 Internal Revenue Code for taxable years ending after December
38 22, 2017.
39 (26) For taxable years beginning after December 31, 2019, and
40 before January 1, 2021, add an amount of the deduction claimed
41 under Section 62(a)(22) of the Internal Revenue Code.
42 (27) For taxable years beginning after December 31, 2019, for
2022 IN 1252—LS 7167/DI 116 6
1 payments made by an employer under an education assistance
2 program after March 27, 2020:
3 (A) add the amount of payments by an employer that are
4 excluded from the taxpayer's federal gross income under
5 Section 127(c)(1)(B) of the Internal Revenue Code; and
6 (B) deduct the interest allowable under Section 221 of the
7 Internal Revenue Code, if the disallowance under Section
8 221(e)(1) of the Internal Revenue Code did not apply to the
9 payments described in clause (A). For purposes of applying
10 Section 221(b) of the Internal Revenue Code to the amount
11 allowable under this clause, the amount under clause (A) shall
12 not be added to adjusted gross income.
13 (28) Add an amount equal to the remainder of:
14 (A) the amount allowable as a deduction under Section 274(n)
15 of the Internal Revenue Code; minus
16 (B) the amount otherwise allowable as a deduction under
17 Section 274(n) of the Internal Revenue Code, if Section
18 274(n)(2)(D) of the Internal Revenue Code was not in effect
19 for amounts paid or incurred after December 31, 2020.
20 (29) For taxable years beginning after December 31, 2017, and
21 before January 1, 2021, add an amount equal to the excess
22 business loss of the taxpayer as defined in Section 461(l)(3) of the
23 Internal Revenue Code. In addition:
24 (A) If a taxpayer has an excess business loss under this
25 subdivision and also has modifications under subdivisions (15)
26 and (17) for property placed in service during the taxable year,
27 the taxpayer shall treat a portion of the taxable year
28 modifications for that property as occurring in the taxable year
29 the property is placed in service and a portion of the
30 modifications as occurring in the immediately following
31 taxable year.
32 (B) The portion of the modifications under subdivisions (15)
33 and (17) for property placed in service during the taxable year
34 treated as occurring in the taxable year in which the property
35 is placed in service equals:
36 (i) the modification for the property otherwise determined
37 under this section; minus
38 (ii) the excess business loss disallowed under this
39 subdivision;
40 but not less than zero (0).
41 (C) The portion of the modifications under subdivisions (15)
42 and (17) for property placed in service during the taxable year
2022 IN 1252—LS 7167/DI 116 7
1 treated as occurring in the taxable year immediately following
2 the taxable year in which the property is placed in service
3 equals the modification for the property otherwise determined
4 under this section minus the amount in clause (B).
5 (D) Any reallocation of modifications between taxable years
6 under clauses (B) and (C) shall be first allocated to the
7 modification under subdivision (15), then to the modification
8 under subdivision (17).
9 (30) Add an amount equal to the amount excluded from federal
10 gross income under Section 108(f)(5) of the Internal Revenue
11 Code. For purposes of this subdivision, if an amount excluded
12 under Section 108(f)(5) of the Internal Revenue Code would be
13 excludible under Section 108(a)(1)(B) of the Internal Revenue
14 Code, the exclusion under Section 108(a)(1)(B) of the Internal
15 Revenue Code shall take precedence.
16 (31) For taxable years ending after March 12, 2020, subtract an
17 amount equal to the deduction disallowed pursuant to:
18 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
19 as modified by Sections 206 and 207 of the Taxpayer Certainty
20 and Disaster Relief Tax Act (Division EE of Public Law
21 116-260); and
22 (B) Section 3134(e) of the Internal Revenue Code.
23 (32) Subtract the amount of an annual grant amount distributed to
24 a taxpayer's Indiana education scholarship account under
25 IC 20-51.4-4-2, or to an Indiana enrichment scholarship
26 account under IC 20-52 that is used for a qualified expense (as
27 defined in IC 20-51.4-2-9), to the extent the distribution used for
28 the qualified expense is included in the taxpayer's federal adjusted
29 gross income under the Internal Revenue Code.
30 (33) For taxable years beginning after December 31, 2019, and
31 before January 1, 2021, add an amount equal to the amount of
32 unemployment compensation excluded from federal gross income
33 under Section 85(c) of the Internal Revenue Code.
34 (34) Subtract any other amounts the taxpayer is entitled to deduct
35 under IC 6-3-2.
36 (b) In the case of corporations, the same as "taxable income" (as
37 defined in Section 63 of the Internal Revenue Code) adjusted as
38 follows:
39 (1) Subtract income that is exempt from taxation under this article
40 by the Constitution and statutes of the United States.
41 (2) Add an amount equal to any deduction or deductions allowed
42 or allowable pursuant to Section 170 of the Internal Revenue
2022 IN 1252—LS 7167/DI 116 8
1 Code (concerning charitable contributions).
2 (3) Except as provided in subsection (c), add an amount equal to
3 any deduction or deductions allowed or allowable pursuant to
4 Section 63 of the Internal Revenue Code for taxes based on or
5 measured by income and levied at the state level by any state of
6 the United States.
7 (4) Subtract an amount equal to the amount included in the
8 corporation's taxable income under Section 78 of the Internal
9 Revenue Code (concerning foreign tax credits).
10 (5) Add or subtract the amount necessary to make the adjusted
11 gross income of any taxpayer that owns property for which bonus
12 depreciation was allowed in the current taxable year or in an
13 earlier taxable year equal to the amount of adjusted gross income
14 that would have been computed had an election not been made
15 under Section 168(k) of the Internal Revenue Code to apply bonus
16 depreciation to the property in the year that it was placed in
17 service.
18 (6) Add an amount equal to any deduction allowed under Section
19 172 of the Internal Revenue Code (concerning net operating
20 losses).
21 (7) Add or subtract the amount necessary to make the adjusted
22 gross income of any taxpayer that placed Section 179 property (as
23 defined in Section 179 of the Internal Revenue Code) in service
24 in the current taxable year or in an earlier taxable year equal to
25 the amount of adjusted gross income that would have been
26 computed had an election for federal income tax purposes not
27 been made for the year in which the property was placed in
28 service to take deductions under Section 179 of the Internal
29 Revenue Code in a total amount exceeding the sum of:
30 (A) twenty-five thousand dollars ($25,000) to the extent
31 deductions under Section 179 of the Internal Revenue Code
32 were not elected as provided in clause (B); and
33 (B) for taxable years beginning after December 31, 2017, the
34 deductions elected under Section 179 of the Internal Revenue
35 Code on property acquired in an exchange if:
36 (i) the exchange would have been eligible for
37 nonrecognition of gain or loss under Section 1031 of the
38 Internal Revenue Code in effect on January 1, 2017;
39 (ii) the exchange is not eligible for nonrecognition of gain or
40 loss under Section 1031 of the Internal Revenue Code; and
41 (iii) the taxpayer made an election to take deductions under
42 Section 179 of the Internal Revenue Code with regard to the
2022 IN 1252—LS 7167/DI 116 9
1 acquired property in the year that the property was placed
2 into service.
3 The amount of deductions allowable for an item of property
4 under this clause may not exceed the amount of adjusted gross
5 income realized on the property that would have been deferred
6 under the Internal Revenue Code in effect on January 1, 2017.
7 (8) Add to the extent required by IC 6-3-2-20:
8 (A) the amount of intangible expenses (as defined in
9 IC 6-3-2-20) for the taxable year that reduced the corporation's
10 taxable income (as defined in Section 63 of the Internal
11 Revenue Code) for federal income tax purposes; and
12 (B) any directly related interest expenses (as defined in
13 IC 6-3-2-20) that reduced the corporation's adjusted gross
14 income (determined without regard to this subdivision). For
15 purposes of this clause, any directly related interest expense
16 that constitutes business interest within the meaning of Section
17 163(j) of the Internal Revenue Code shall be considered to
18 have reduced the taxpayer's federal taxable income only in the
19 first taxable year in which the deduction otherwise would have
20 been allowable under Section 163 of the Internal Revenue
21 Code if the limitation under Section 163(j)(1) of the Internal
22 Revenue Code did not exist.
23 (9) Add an amount equal to any deduction for dividends paid (as
24 defined in Section 561 of the Internal Revenue Code) to
25 shareholders of a captive real estate investment trust (as defined
26 in section 34.5 of this chapter).
27 (10) Subtract income that is:
28 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
29 derived from patents); and
30 (B) included in the corporation's taxable income under the
31 Internal Revenue Code.
32 (11) Add an amount equal to any income not included in gross
33 income as a result of the deferral of income arising from business
34 indebtedness discharged in connection with the reacquisition after
35 December 31, 2008, and before January 1, 2011, of an applicable
36 debt instrument, as provided in Section 108(i) of the Internal
37 Revenue Code. Subtract from the adjusted gross income of any
38 taxpayer that added an amount to adjusted gross income in a
39 previous year the amount necessary to offset the amount included
40 in federal gross income as a result of the deferral of income
41 arising from business indebtedness discharged in connection with
42 the reacquisition after December 31, 2008, and before January 1,
2022 IN 1252—LS 7167/DI 116 10
1 2011, of an applicable debt instrument, as provided in Section
2 108(i) of the Internal Revenue Code.
3 (12) Add the amount excluded from federal gross income under
4 Section 103 of the Internal Revenue Code for interest received on
5 an obligation of a state other than Indiana, or a political
6 subdivision of such a state, that is acquired by the taxpayer after
7 December 31, 2011.
8 (13) For taxable years beginning after December 25, 2016:
9 (A) for a corporation other than a real estate investment trust,
10 add:
11 (i) an amount equal to the amount reported by the taxpayer
12 on IRC 965 Transition Tax Statement, line 1; or
13 (ii) if the taxpayer deducted an amount under Section 965(c)
14 of the Internal Revenue Code in determining the taxpayer's
15 taxable income for purposes of the federal income tax, the
16 amount deducted under Section 965(c) of the Internal
17 Revenue Code; and
18 (B) for a real estate investment trust, add an amount equal to
19 the deduction for deferred foreign income that was claimed by
20 the taxpayer for the taxable year under Section 965(c) of the
21 Internal Revenue Code, but only to the extent that the taxpayer
22 included income pursuant to Section 965 of the Internal
23 Revenue Code in its taxable income for federal income tax
24 purposes or is required to add back dividends paid under
25 subdivision (9).
26 (14) Add an amount equal to the deduction that was claimed by
27 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
28 Internal Revenue Code (attributable to global intangible
29 low-taxed income). The taxpayer shall separately specify the
30 amount of the reduction under Section 250(a)(1)(B)(i) of the
31 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
32 Internal Revenue Code.
33 (15) Subtract any interest expense paid or accrued in the current
34 taxable year but not deducted as a result of the limitation imposed
35 under Section 163(j)(1) of the Internal Revenue Code. Add any
36 interest expense paid or accrued in a previous taxable year but
37 allowed as a deduction under Section 163 of the Internal Revenue
38 Code in the current taxable year. For purposes of this subdivision,
39 an interest expense is considered paid or accrued only in the first
40 taxable year the deduction would have been allowable under
41 Section 163 of the Internal Revenue Code if the limitation under
42 Section 163(j)(1) of the Internal Revenue Code did not exist.
2022 IN 1252—LS 7167/DI 116 11
1 (16) Subtract the amount that would have been excluded from
2 gross income but for the enactment of Section 118(b)(2) of the
3 Internal Revenue Code for taxable years ending after December
4 22, 2017.
5 (17) Add an amount equal to the remainder of:
6 (A) the amount allowable as a deduction under Section 274(n)
7 of the Internal Revenue Code; minus
8 (B) the amount otherwise allowable as a deduction under
9 Section 274(n) of the Internal Revenue Code, if Section
10 274(n)(2)(D) of the Internal Revenue Code was not in effect
11 for amounts paid or incurred after December 31, 2020.
12 (18) For taxable years ending after March 12, 2020, subtract an
13 amount equal to the deduction disallowed pursuant to:
14 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
15 as modified by Sections 206 and 207 of the Taxpayer Certainty
16 and Disaster Relief Tax Act (Division EE of Public Law
17 116-260); and
18 (B) Section 3134(e) of the Internal Revenue Code.
19 (19) Add or subtract any other amounts the taxpayer is:
20 (A) required to add or subtract; or
21 (B) entitled to deduct;
22 under IC 6-3-2.
23 (c) The following apply to taxable years beginning after December
24 31, 2018, for purposes of the add back of any deduction allowed on the
25 taxpayer's federal income tax return for wagering taxes, as provided in
26 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
27 the taxpayer is a corporation:
28 (1) For taxable years beginning after December 31, 2018, and
29 before January 1, 2020, a taxpayer is required to add back under
30 this section eighty-seven and five-tenths percent (87.5%) of any
31 deduction allowed on the taxpayer's federal income tax return for
32 wagering taxes.
33 (2) For taxable years beginning after December 31, 2019, and
34 before January 1, 2021, a taxpayer is required to add back under
35 this section seventy-five percent (75%) of any deduction allowed
36 on the taxpayer's federal income tax return for wagering taxes.
37 (3) For taxable years beginning after December 31, 2020, and
38 before January 1, 2022, a taxpayer is required to add back under
39 this section sixty-two and five-tenths percent (62.5%) of any
40 deduction allowed on the taxpayer's federal income tax return for
41 wagering taxes.
42 (4) For taxable years beginning after December 31, 2021, and
2022 IN 1252—LS 7167/DI 116 12
1 before January 1, 2023, a taxpayer is required to add back under
2 this section fifty percent (50%) of any deduction allowed on the
3 taxpayer's federal income tax return for wagering taxes.
4 (5) For taxable years beginning after December 31, 2022, and
5 before January 1, 2024, a taxpayer is required to add back under
6 this section thirty-seven and five-tenths percent (37.5%) of any
7 deduction allowed on the taxpayer's federal income tax return for
8 wagering taxes.
9 (6) For taxable years beginning after December 31, 2023, and
10 before January 1, 2025, a taxpayer is required to add back under
11 this section twenty-five percent (25%) of any deduction allowed
12 on the taxpayer's federal income tax return for wagering taxes.
13 (7) For taxable years beginning after December 31, 2024, and
14 before January 1, 2026, a taxpayer is required to add back under
15 this section twelve and five-tenths percent (12.5%) of any
16 deduction allowed on the taxpayer's federal income tax return for
17 wagering taxes.
18 (8) For taxable years beginning after December 31, 2025, a
19 taxpayer is not required to add back under this section any amount
20 of a deduction allowed on the taxpayer's federal income tax return
21 for wagering taxes.
22 (d) In the case of life insurance companies (as defined in Section
23 816(a) of the Internal Revenue Code) that are organized under Indiana
24 law, the same as "life insurance company taxable income" (as defined
25 in Section 801 of the Internal Revenue Code), adjusted as follows:
26 (1) Subtract income that is exempt from taxation under this article
27 by the Constitution and statutes of the United States.
28 (2) Add an amount equal to any deduction allowed or allowable
29 under Section 170 of the Internal Revenue Code (concerning
30 charitable contributions).
31 (3) Add an amount equal to a deduction allowed or allowable
32 under Section 805 or Section 832(c) of the Internal Revenue Code
33 for taxes based on or measured by income and levied at the state
34 level by any state.
35 (4) Subtract an amount equal to the amount included in the
36 company's taxable income under Section 78 of the Internal
37 Revenue Code (concerning foreign tax credits).
38 (5) Add or subtract the amount necessary to make the adjusted
39 gross income of any taxpayer that owns property for which bonus
40 depreciation was allowed in the current taxable year or in an
41 earlier taxable year equal to the amount of adjusted gross income
42 that would have been computed had an election not been made
2022 IN 1252—LS 7167/DI 116 13
1 under Section 168(k) of the Internal Revenue Code to apply bonus
2 depreciation to the property in the year that it was placed in
3 service.
4 (6) Add an amount equal to any deduction allowed under Section
5 172 of the Internal Revenue Code (concerning net operating
6 losses).
7 (7) Add or subtract the amount necessary to make the adjusted
8 gross income of any taxpayer that placed Section 179 property (as
9 defined in Section 179 of the Internal Revenue Code) in service
10 in the current taxable year or in an earlier taxable year equal to
11 the amount of adjusted gross income that would have been
12 computed had an election for federal income tax purposes not
13 been made for the year in which the property was placed in
14 service to take deductions under Section 179 of the Internal
15 Revenue Code in a total amount exceeding the sum of:
16 (A) twenty-five thousand dollars ($25,000) to the extent
17 deductions under Section 179 of the Internal Revenue Code
18 were not elected as provided in clause (B); and
19 (B) for taxable years beginning after December 31, 2017, the
20 deductions elected under Section 179 of the Internal Revenue
21 Code on property acquired in an exchange if:
22 (i) the exchange would have been eligible for
23 nonrecognition of gain or loss under Section 1031 of the
24 Internal Revenue Code in effect on January 1, 2017;
25 (ii) the exchange is not eligible for nonrecognition of gain or
26 loss under Section 1031 of the Internal Revenue Code; and
27 (iii) the taxpayer made an election to take deductions under
28 Section 179 of the Internal Revenue Code with regard to the
29 acquired property in the year that the property was placed
30 into service.
31 The amount of deductions allowable for an item of property
32 under this clause may not exceed the amount of adjusted gross
33 income realized on the property that would have been deferred
34 under the Internal Revenue Code in effect on January 1, 2017.
35 (8) Subtract income that is:
36 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
37 derived from patents); and
38 (B) included in the insurance company's taxable income under
39 the Internal Revenue Code.
40 (9) Add an amount equal to any income not included in gross
41 income as a result of the deferral of income arising from business
42 indebtedness discharged in connection with the reacquisition after
2022 IN 1252—LS 7167/DI 116 14
1 December 31, 2008, and before January 1, 2011, of an applicable
2 debt instrument, as provided in Section 108(i) of the Internal
3 Revenue Code. Subtract from the adjusted gross income of any
4 taxpayer that added an amount to adjusted gross income in a
5 previous year the amount necessary to offset the amount included
6 in federal gross income as a result of the deferral of income
7 arising from business indebtedness discharged in connection with
8 the reacquisition after December 31, 2008, and before January 1,
9 2011, of an applicable debt instrument, as provided in Section
10 108(i) of the Internal Revenue Code.
11 (10) Add an amount equal to any exempt insurance income under
12 Section 953(e) of the Internal Revenue Code that is active
13 financing income under Subpart F of Subtitle A, Chapter 1,
14 Subchapter N of the Internal Revenue Code.
15 (11) Add the amount excluded from federal gross income under
16 Section 103 of the Internal Revenue Code for interest received on
17 an obligation of a state other than Indiana, or a political
18 subdivision of such a state, that is acquired by the taxpayer after
19 December 31, 2011.
20 (12) For taxable years beginning after December 25, 2016, add:
21 (A) an amount equal to the amount reported by the taxpayer on
22 IRC 965 Transition Tax Statement, line 1; or
23 (B) if the taxpayer deducted an amount under Section 965(c)
24 of the Internal Revenue Code in determining the taxpayer's
25 taxable income for purposes of the federal income tax, the
26 amount deducted under Section 965(c) of the Internal Revenue
27 Code.
28 (13) Add an amount equal to the deduction that was claimed by
29 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
30 Internal Revenue Code (attributable to global intangible
31 low-taxed income). The taxpayer shall separately specify the
32 amount of the reduction under Section 250(a)(1)(B)(i) of the
33 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
34 Internal Revenue Code.
35 (14) Subtract any interest expense paid or accrued in the current
36 taxable year but not deducted as a result of the limitation imposed
37 under Section 163(j)(1) of the Internal Revenue Code. Add any
38 interest expense paid or accrued in a previous taxable year but
39 allowed as a deduction under Section 163 of the Internal Revenue
40 Code in the current taxable year. For purposes of this subdivision,
41 an interest expense is considered paid or accrued only in the first
42 taxable year the deduction would have been allowable under
2022 IN 1252—LS 7167/DI 116 15
1 Section 163 of the Internal Revenue Code if the limitation under
2 Section 163(j)(1) of the Internal Revenue Code did not exist.
3 (15) Subtract the amount that would have been excluded from
4 gross income but for the enactment of Section 118(b)(2) of the
5 Internal Revenue Code for taxable years ending after December
6 22, 2017.
7 (16) Add an amount equal to the remainder of:
8 (A) the amount allowable as a deduction under Section 274(n)
9 of the Internal Revenue Code; minus
10 (B) the amount otherwise allowable as a deduction under
11 Section 274(n) of the Internal Revenue Code, if Section
12 274(n)(2)(D) of the Internal Revenue Code was not in effect
13 for amounts paid or incurred after December 31, 2020.
14 (17) For taxable years ending after March 12, 2020, subtract an
15 amount equal to the deduction disallowed pursuant to:
16 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
17 as modified by Sections 206 and 207 of the Taxpayer Certainty
18 and Disaster Relief Tax Act (Division EE of Public Law
19 116-260); and
20 (B) Section 3134(e) of the Internal Revenue Code.
21 (18) Add or subtract any other amounts the taxpayer is:
22 (A) required to add or subtract; or
23 (B) entitled to deduct;
24 under IC 6-3-2.
25 (e) In the case of insurance companies subject to tax under Section
26 831 of the Internal Revenue Code and organized under Indiana law, the
27 same as "taxable income" (as defined in Section 832 of the Internal
28 Revenue Code), adjusted as follows:
29 (1) Subtract income that is exempt from taxation under this article
30 by the Constitution and statutes of the United States.
31 (2) Add an amount equal to any deduction allowed or allowable
32 under Section 170 of the Internal Revenue Code (concerning
33 charitable contributions).
34 (3) Add an amount equal to a deduction allowed or allowable
35 under Section 805 or Section 832(c) of the Internal Revenue Code
36 for taxes based on or measured by income and levied at the state
37 level by any state.
38 (4) Subtract an amount equal to the amount included in the
39 company's taxable income under Section 78 of the Internal
40 Revenue Code (concerning foreign tax credits).
41 (5) Add or subtract the amount necessary to make the adjusted
42 gross income of any taxpayer that owns property for which bonus
2022 IN 1252—LS 7167/DI 116 16
1 depreciation was allowed in the current taxable year or in an
2 earlier taxable year equal to the amount of adjusted gross income
3 that would have been computed had an election not been made
4 under Section 168(k) of the Internal Revenue Code to apply bonus
5 depreciation to the property in the year that it was placed in
6 service.
7 (6) Add an amount equal to any deduction allowed under Section
8 172 of the Internal Revenue Code (concerning net operating
9 losses).
10 (7) Add or subtract the amount necessary to make the adjusted
11 gross income of any taxpayer that placed Section 179 property (as
12 defined in Section 179 of the Internal Revenue Code) in service
13 in the current taxable year or in an earlier taxable year equal to
14 the amount of adjusted gross income that would have been
15 computed had an election for federal income tax purposes not
16 been made for the year in which the property was placed in
17 service to take deductions under Section 179 of the Internal
18 Revenue Code in a total amount exceeding the sum of:
19 (A) twenty-five thousand dollars ($25,000) to the extent
20 deductions under Section 179 of the Internal Revenue Code
21 were not elected as provided in clause (B); and
22 (B) for taxable years beginning after December 31, 2017, the
23 deductions elected under Section 179 of the Internal Revenue
24 Code on property acquired in an exchange if:
25 (i) the exchange would have been eligible for
26 nonrecognition of gain or loss under Section 1031 of the
27 Internal Revenue Code in effect on January 1, 2017;
28 (ii) the exchange is not eligible for nonrecognition of gain or
29 loss under Section 1031 of the Internal Revenue Code; and
30 (iii) the taxpayer made an election to take deductions under
31 Section 179 of the Internal Revenue Code with regard to the
32 acquired property in the year that the property was placed
33 into service.
34 The amount of deductions allowable for an item of property
35 under this clause may not exceed the amount of adjusted gross
36 income realized on the property that would have been deferred
37 under the Internal Revenue Code in effect on January 1, 2017.
38 (8) Subtract income that is:
39 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
40 derived from patents); and
41 (B) included in the insurance company's taxable income under
42 the Internal Revenue Code.
2022 IN 1252—LS 7167/DI 116 17
1 (9) Add an amount equal to any income not included in gross
2 income as a result of the deferral of income arising from business
3 indebtedness discharged in connection with the reacquisition after
4 December 31, 2008, and before January 1, 2011, of an applicable
5 debt instrument, as provided in Section 108(i) of the Internal
6 Revenue Code. Subtract from the adjusted gross income of any
7 taxpayer that added an amount to adjusted gross income in a
8 previous year the amount necessary to offset the amount included
9 in federal gross income as a result of the deferral of income
10 arising from business indebtedness discharged in connection with
11 the reacquisition after December 31, 2008, and before January 1,
12 2011, of an applicable debt instrument, as provided in Section
13 108(i) of the Internal Revenue Code.
14 (10) Add an amount equal to any exempt insurance income under
15 Section 953(e) of the Internal Revenue Code that is active
16 financing income under Subpart F of Subtitle A, Chapter 1,
17 Subchapter N of the Internal Revenue Code.
18 (11) Add the amount excluded from federal gross income under
19 Section 103 of the Internal Revenue Code for interest received on
20 an obligation of a state other than Indiana, or a political
21 subdivision of such a state, that is acquired by the taxpayer after
22 December 31, 2011.
23 (12) For taxable years beginning after December 25, 2016, add:
24 (A) an amount equal to the amount reported by the taxpayer on
25 IRC 965 Transition Tax Statement, line 1; or
26 (B) if the taxpayer deducted an amount under Section 965(c)
27 of the Internal Revenue Code in determining the taxpayer's
28 taxable income for purposes of the federal income tax, the
29 amount deducted under Section 965(c) of the Internal Revenue
30 Code.
31 (13) Add an amount equal to the deduction that was claimed by
32 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
33 Internal Revenue Code (attributable to global intangible
34 low-taxed income). The taxpayer shall separately specify the
35 amount of the reduction under Section 250(a)(1)(B)(i) of the
36 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
37 Internal Revenue Code.
38 (14) Subtract any interest expense paid or accrued in the current
39 taxable year but not deducted as a result of the limitation imposed
40 under Section 163(j)(1) of the Internal Revenue Code. Add any
41 interest expense paid or accrued in a previous taxable year but
42 allowed as a deduction under Section 163 of the Internal Revenue
2022 IN 1252—LS 7167/DI 116 18
1 Code in the current taxable year. For purposes of this subdivision,
2 an interest expense is considered paid or accrued only in the first
3 taxable year the deduction would have been allowable under
4 Section 163 of the Internal Revenue Code if the limitation under
5 Section 163(j)(1) of the Internal Revenue Code did not exist.
6 (15) Subtract the amount that would have been excluded from
7 gross income but for the enactment of Section 118(b)(2) of the
8 Internal Revenue Code for taxable years ending after December
9 22, 2017.
10 (16) Add an amount equal to the remainder of:
11 (A) the amount allowable as a deduction under Section 274(n)
12 of the Internal Revenue Code; minus
13 (B) the amount otherwise allowable as a deduction under
14 Section 274(n) of the Internal Revenue Code, if Section
15 274(n)(2)(D) of the Internal Revenue Code was not in effect
16 for amounts paid or incurred after December 31, 2020.
17 (17) For taxable years ending after March 12, 2020, subtract an
18 amount equal to the deduction disallowed pursuant to:
19 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
20 as modified by Sections 206 and 207 of the Taxpayer Certainty
21 and Disaster Relief Tax Act (Division EE of Public Law
22 116-260); and
23 (B) Section 3134(e) of the Internal Revenue Code.
24 (18) Add or subtract any other amounts the taxpayer is:
25 (A) required to add or subtract; or
26 (B) entitled to deduct;
27 under IC 6-3-2.
28 (f) In the case of trusts and estates, "taxable income" (as defined for
29 trusts and estates in Section 641(b) of the Internal Revenue Code)
30 adjusted as follows:
31 (1) Subtract income that is exempt from taxation under this article
32 by the Constitution and statutes of the United States.
33 (2) Subtract an amount equal to the amount of a September 11
34 terrorist attack settlement payment included in the federal
35 adjusted gross income of the estate of a victim of the September
36 11 terrorist attack or a trust to the extent the trust benefits a victim
37 of the September 11 terrorist attack.
38 (3) Add or subtract the amount necessary to make the adjusted
39 gross income of any taxpayer that owns property for which bonus
40 depreciation was allowed in the current taxable year or in an
41 earlier taxable year equal to the amount of adjusted gross income
42 that would have been computed had an election not been made
2022 IN 1252—LS 7167/DI 116 19
1 under Section 168(k) of the Internal Revenue Code to apply bonus
2 depreciation to the property in the year that it was placed in
3 service.
4 (4) Add an amount equal to any deduction allowed under Section
5 172 of the Internal Revenue Code (concerning net operating
6 losses).
7 (5) Add or subtract the amount necessary to make the adjusted
8 gross income of any taxpayer that placed Section 179 property (as
9 defined in Section 179 of the Internal Revenue Code) in service
10 in the current taxable year or in an earlier taxable year equal to
11 the amount of adjusted gross income that would have been
12 computed had an election for federal income tax purposes not
13 been made for the year in which the property was placed in
14 service to take deductions under Section 179 of the Internal
15 Revenue Code in a total amount exceeding the sum of:
16 (A) twenty-five thousand dollars ($25,000) to the extent
17 deductions under Section 179 of the Internal Revenue Code
18 were not elected as provided in clause (B); and
19 (B) for taxable years beginning after December 31, 2017, the
20 deductions elected under Section 179 of the Internal Revenue
21 Code on property acquired in an exchange if:
22 (i) the exchange would have been eligible for
23 nonrecognition of gain or loss under Section 1031 of the
24 Internal Revenue Code in effect on January 1, 2017;
25 (ii) the exchange is not eligible for nonrecognition of gain or
26 loss under Section 1031 of the Internal Revenue Code; and
27 (iii) the taxpayer made an election to take deductions under
28 Section 179 of the Internal Revenue Code with regard to the
29 acquired property in the year that the property was placed
30 into service.
31 The amount of deductions allowable for an item of property
32 under this clause may not exceed the amount of adjusted gross
33 income realized on the property that would have been deferred
34 under the Internal Revenue Code in effect on January 1, 2017.
35 (6) Subtract income that is:
36 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
37 derived from patents); and
38 (B) included in the taxpayer's taxable income under the
39 Internal Revenue Code.
40 (7) Add an amount equal to any income not included in gross
41 income as a result of the deferral of income arising from business
42 indebtedness discharged in connection with the reacquisition after
2022 IN 1252—LS 7167/DI 116 20
1 December 31, 2008, and before January 1, 2011, of an applicable
2 debt instrument, as provided in Section 108(i) of the Internal
3 Revenue Code. Subtract from the adjusted gross income of any
4 taxpayer that added an amount to adjusted gross income in a
5 previous year the amount necessary to offset the amount included
6 in federal gross income as a result of the deferral of income
7 arising from business indebtedness discharged in connection with
8 the reacquisition after December 31, 2008, and before January 1,
9 2011, of an applicable debt instrument, as provided in Section
10 108(i) of the Internal Revenue Code.
11 (8) Add the amount excluded from federal gross income under
12 Section 103 of the Internal Revenue Code for interest received on
13 an obligation of a state other than Indiana, or a political
14 subdivision of such a state, that is acquired by the taxpayer after
15 December 31, 2011.
16 (9) For taxable years beginning after December 25, 2016, add an
17 amount equal to:
18 (A) the amount reported by the taxpayer on IRC 965
19 Transition Tax Statement, line 1;
20 (B) if the taxpayer deducted an amount under Section 965(c)
21 of the Internal Revenue Code in determining the taxpayer's
22 taxable income for purposes of the federal income tax, the
23 amount deducted under Section 965(c) of the Internal Revenue
24 Code; and
25 (C) with regard to any amounts of income under Section 965
26 of the Internal Revenue Code distributed by the taxpayer, the
27 deduction under Section 965(c) of the Internal Revenue Code
28 attributable to such distributed amounts and not reported to the
29 beneficiary.
30 For purposes of this article, the amount required to be added back
31 under clause (B) is not considered to be distributed or
32 distributable to a beneficiary of the estate or trust for purposes of
33 Sections 651 and 661 of the Internal Revenue Code.
34 (10) Subtract any interest expense paid or accrued in the current
35 taxable year but not deducted as a result of the limitation imposed
36 under Section 163(j)(1) of the Internal Revenue Code. Add any
37 interest expense paid or accrued in a previous taxable year but
38 allowed as a deduction under Section 163 of the Internal Revenue
39 Code in the current taxable year. For purposes of this subdivision,
40 an interest expense is considered paid or accrued only in the first
41 taxable year the deduction would have been allowable under
42 Section 163 of the Internal Revenue Code if the limitation under
2022 IN 1252—LS 7167/DI 116 21
1 Section 163(j)(1) of the Internal Revenue Code did not exist.
2 (11) Add an amount equal to the deduction for qualified business
3 income that was claimed by the taxpayer for the taxable year
4 under Section 199A of the Internal Revenue Code.
5 (12) Subtract the amount that would have been excluded from
6 gross income but for the enactment of Section 118(b)(2) of the
7 Internal Revenue Code for taxable years ending after December
8 22, 2017.
9 (13) Add an amount equal to the remainder of:
10 (A) the amount allowable as a deduction under Section 274(n)
11 of the Internal Revenue Code; minus
12 (B) the amount otherwise allowable as a deduction under
13 Section 274(n) of the Internal Revenue Code, if Section
14 274(n)(2)(D) of the Internal Revenue Code was not in effect
15 for amounts paid or incurred after December 31, 2020.
16 (14) For taxable years beginning after December 31, 2017, and
17 before January 1, 2021, add an amount equal to the excess
18 business loss of the taxpayer as defined in Section 461(l)(3) of the
19 Internal Revenue Code. In addition:
20 (A) If a taxpayer has an excess business loss under this
21 subdivision and also has modifications under subdivisions (3)
22 and (5) for property placed in service during the taxable year,
23 the taxpayer shall treat a portion of the taxable year
24 modifications for that property as occurring in the taxable year
25 the property is placed in service and a portion of the
26 modifications as occurring in the immediately following
27 taxable year.
28 (B) The portion of the modifications under subdivisions (3)
29 and (5) for property placed in service during the taxable year
30 treated as occurring in the taxable year in which the property
31 is placed in service equals:
32 (i) the modification for the property otherwise determined
33 under this section; minus
34 (ii) the excess business loss disallowed under this
35 subdivision;
36 but not less than zero (0).
37 (C) The portion of the modifications under subdivisions (3)
38 and (5) for property placed in service during the taxable year
39 treated as occurring in the taxable year immediately following
40 the taxable year in which the property is placed in service
41 equals the modification for the property otherwise determined
42 under this section minus the amount in clause (B).
2022 IN 1252—LS 7167/DI 116 22
1 (D) Any reallocation of modifications between taxable years
2 under clauses (B) and (C) shall be first allocated to the
3 modification under subdivision (3), then to the modification
4 under subdivision (5).
5 (15) For taxable years ending after March 12, 2020, subtract an
6 amount equal to the deduction disallowed pursuant to:
7 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
8 as modified by Sections 206 and 207 of the Taxpayer Certainty
9 and Disaster Relief Tax Act (Division EE of Public Law
10 116-260); and
11 (B) Section 3134(e) of the Internal Revenue Code.
12 (16) Add or subtract any other amounts the taxpayer is:
13 (A) required to add or subtract; or
14 (B) entitled to deduct;
15 under IC 6-3-2.
16 (g) Subsections (a)(34), (b)(19), (d)(18), (e)(18), or (f)(16) may not
17 be construed to require an add back or allow a deduction or exemption
18 more than once for a particular add back, deduction, or exemption.
19 (h) For taxable years beginning after December 25, 2016, if:
20 (1) a taxpayer is a shareholder, either directly or indirectly, in a
21 corporation that is an E&P deficit foreign corporation as defined
22 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
23 earnings and profit deficit, or a portion of the earnings and profit
24 deficit, of the E&P deficit foreign corporation is permitted to
25 reduce the federal adjusted gross income or federal taxable
26 income of the taxpayer, the deficit, or the portion of the deficit,
27 shall also reduce the amount taxable under this section to the
28 extent permitted under the Internal Revenue Code, however, in no
29 case shall this permit a reduction in the amount taxable under
30 Section 965 of the Internal Revenue Code for purposes of this
31 section to be less than zero (0); and
32 (2) the Internal Revenue Service issues guidance that such an
33 income or deduction is not reported directly on a federal tax
34 return or is to be reported in a manner different than specified in
35 this section, this section shall be construed as if federal adjusted
36 gross income or federal taxable income included the income or
37 deduction.
38 (i) If a partner is required to include an item of income, a deduction,
39 or another tax attribute in the partner's adjusted gross income tax return
40 pursuant to IC 6-3-4.5, such item shall be considered to be includible
41 in the partner's federal adjusted gross income or federal taxable
42 income, regardless of whether such item is actually required to be
2022 IN 1252—LS 7167/DI 116 23
1 reported by the partner for federal income tax purposes. For purposes
2 of this subsection:
3 (1) items for which a valid election is made under IC 6-3-4.5-6,
4 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
5 in the partner's adjusted gross income or taxable income; and
6 (2) items for which the partnership did not make an election under
7 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
8 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
9 shall be included in the partner's adjusted gross income or taxable
10 income.
11 SECTION 2. IC 20-52 IS ADDED TO THE INDIANA CODE AS
12 A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE UPON
13 PASSAGE]:
14 ARTICLE 52. STUDENT ENRICHMENT GRANTS
15 Chapter 1. Applicability
16 Sec. 1. This article applies after June 30, 2022.
17 Chapter 2. Definitions
18 Sec. 1. The definitions in this chapter apply throughout this
19 article.
20 Sec. 2. "Account" refers to an Indiana enrichment scholarship
21 account established by an enrichment student's parent under
22 IC 20-52-4-1.
23 Sec. 3. "Enrichment grant fund" refers to the Indiana
24 enrichment grant fund established by IC 20-52-4-3.
25 Sec. 4. "Enrichment student" refers to an individual who:
26 (1) has legal settlement in Indiana;
27 (2) was a student in grades 3 through 8 during the 2021-2022
28 school year; and
29 (3) scored either:
30 (A) "below proficiency"; or
31 (B) "approaching proficiency";
32 on the ILEARN statewide assessment administered during the
33 2021-2022 school year.
34 Sec. 5. "Participating entity" means any individual or entity
35 who provides a qualified expense who is approved by the
36 department under IC 20-52-5-1.
37 Sec. 6. "Program" refers to the Indiana student enrichment
38 grant program established by IC 20-52-3-1.
39 Sec. 7. "Qualified expenses" means enrichment materials,
40 activities, or programs approved by the department to improve
41 student proficiency in math or reading.
42 Chapter 3. Administration of the Indiana Student Enrichment
2022 IN 1252—LS 7167/DI 116 24
1 Grant Program
2 Sec. 1. The Indiana student enrichment grant program is
3 established to provide grants to a parent of an enrichment student
4 under IC 20-52-4 after June 30, 2022.
5 Sec. 2. (a) The program shall be administered by the
6 department.
7 (b) The department may contract with one (1) or more entities
8 to maintain and manage accounts established under IC 20-52-4-1
9 after issuing a request for proposal under IC 5-22-9. Each entity
10 shall:
11 (1) meet qualification requirements established by the
12 department; and
13 (2) comply with generally accepted accounting principles.
14 (c) The department shall establish reasonable fees for entities
15 described in subsection (b) participating in the program based
16 upon market rates.
17 Sec. 3. For each school year, the department shall determine,
18 based on the amount of funds available for the program, the
19 number of grants that the department will award under the
20 program. The number of applications approved and the number of
21 grants awarded under this article by the department for the school
22 year may not exceed the number determined by the department
23 under this section.
24 Chapter 4. Enrichment Grant Fund and Enrichment Grant
25 Accounts
26 Sec. 1. (a) After August 31, 2022, a parent of an enrichment
27 student may establish an Indiana enrichment scholarship account
28 for the eligible student by entering into a written agreement with
29 the department on a form prepared by the department. The
30 department may establish deadlines for the submission of
31 applications. The account of an enrichment student shall be made
32 in the name of the enrichment student. The department shall make
33 the agreement available on the Internet web site of the department.
34 To be eligible, a parent of an enrichment student wishing to
35 participate in the program must agree that:
36 (1) a grant deposited in the enrichment student's account
37 under section 2 of this chapter and any interest that may
38 accrue in the account will be used only for the enrichment
39 student's qualified expenses;
40 (2) money in the account when the account is terminated
41 reverts to the enrichment grant fund; and
42 (3) the parent of the enrichment student will use money in the
2022 IN 1252—LS 7167/DI 116 25
1 account for the enrichment student's study in the subject of
2 reading or math.
3 (b) A parent of an enrichment student may enter into a separate
4 agreement under subsection (a) for each child of the parent.
5 However, not more than one (1) account may be established for
6 each enrichment student.
7 (c) An agreement entered into under this section for an
8 enrichment student terminates automatically for the enrichment
9 student if the enrichment student no longer resides in Indiana
10 while the enrichment student is eligible to receive grants under
11 section 2 of this chapter. If an account for an enrichment student
12 is terminated under this section, money in the enrichment student's
13 account, including any interest accrued, reverts to the enrichment
14 grant fund.
15 (d) An agreement made under this section for an enrichment
16 student may be terminated before the end of the school year if the
17 parent of the enrichment student notifies the department in a
18 manner specified by the department.
19 (e) A distribution made to an account under section 2 of this
20 chapter is considered tax exempt as long as the distribution is used
21 for a qualified expense. The amount is subtracted from the
22 definition of adjusted federal gross income under IC 6-3-1-3.5 to
23 the extent the distribution used for the qualified expense is
24 included in the taxpayer's adjusted federal gross income under the
25 Internal Revenue Code.
26 Sec. 2. (a) An enrichment student who currently maintains an
27 account is entitled to a one (1) time grant amount. The enrichment
28 grant amount shall be paid from the enrichment grant fund. The
29 department shall deposit the enrichment grant amount under this
30 section, as a one (1) time deposit, into an enrichment student's
31 account in a manner established by the department.
32 (b) Except as provided in subsection (c), at the end of the year
33 in which an account is established, the parent of an enrichment
34 student may roll over for use in a subsequent year the amount
35 available in the enrichment student's account.
36 (c) An enrichment student's account shall terminate the later of:
37 (1) August 1 in the calendar year a student receives a
38 "proficient" score on the ILEARN statewide assessment; or
39 (2) October 1, 2024.
40 Any money, including interest that remains in the enrichment
41 student's account when the account terminates under this
42 subsection, reverts to the enrichment grant fund.
2022 IN 1252—LS 7167/DI 116 26
1 Sec. 3. (a) The Indiana enrichment grant fund is established for
2 the purpose of providing grants to enrichment students under the
3 program.
4 (b) The department shall administer the enrichment grant fund.
5 (c) The enrichment grant fund consists of the following:
6 (1) Money transferred to the fund by the department.
7 (2) Interest deposited in the fund under subsection (d).
8 (3) Donations, gifts, matching funds from school corporations
9 or schools, and money received from any other source,
10 including transfers from other funds or accounts.
11 (d) The treasurer of state shall invest money in the enrichment
12 grant fund not currently needed to meet the obligations of the
13 enrichment grant fund in the same manner as other public money
14 may be invested. Interest that accrues from these investments shall
15 be deposited in the enrichment grant fund.
16 (e) Money in the enrichment grant fund at the end of a state
17 fiscal year shall not revert to the state general fund.
18 Sec. 4. (a) Subject to section 8 of this chapter, the one (1) time
19 enrichment grant amount under section 2 of this chapter for an
20 enrichment student equals the higher of:
21 (1) five hundred dollars ($500); or
22 (2) if the school corporation or school provides a matching
23 grant to the enrichment student under this section, one
24 thousand dollars ($1,000).
25 (b) A school corporation or a school may provide a matching
26 grant of two hundred fifty dollars ($250) to an enrichment student
27 under this chapter.
28 Sec. 5. Upon entering into an agreement under this chapter, the
29 department shall provide to the parent of an enrichment student a
30 written explanation of the authorized uses of the money in the
31 account and the responsibilities of the parent of an enrichment
32 student and the department regarding an account established
33 under section 1 of this chapter.
34 Sec. 6. This chapter does not prohibit a parent of an enrichment
35 student from making a payment for any qualified expense from a
36 source other than the enrichment student's account.
37 Sec. 7. A participating entity that receives a payment for a
38 qualified expense may not refund any part of the payment directly
39 to the parent of the enrichment student. Any refund provided by
40 a participating entity shall be deposited into the enrichment
41 student's account.
42 Sec. 8. (a) The department shall freeze the account established
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1 under section 1 of this chapter of any parent of an enrichment
2 student who:
3 (1) fails to comply with the terms of the agreement established
4 under section 1 of this chapter;
5 (2) fails to comply with applicable laws or regulations; or
6 (3) substantially misuses funds in the account.
7 (b) The department shall send written notice to the parent of the
8 enrichment student stating the reason for the freeze under
9 subsection (a). The department may also send notice to the
10 attorney general or the prosecuting attorney in the county in which
11 the parent of the enrichment student resides if the department
12 believes a crime has been committed or a civil action relating to the
13 account is necessary.
14 (c) A parent of an enrichment student whose account has been
15 frozen under subsection (a) may petition the department for
16 redetermination of the decision under subsection (a) within thirty
17 (30) days after the date the department sends notice to the parent
18 of the enrichment student under subsection (b). The petition must
19 contain a written explanation stating why the department was
20 incorrect in freezing the account under subsection (a). If the
21 department does not receive a timely submitted petition from a
22 parent of an enrichment student under this subsection, the
23 department shall terminate the account.
24 (d) The department shall review a petition received under
25 subsection (c) within fifteen (15) business days of receipt of the
26 petition and issue a redetermination letter to the parent of the
27 enrichment student. If the department overturns the department's
28 initial decision under subsection (a), the department shall
29 immediately unfreeze the account. If the department affirms the
30 decision under subsection (a), the department shall give notice of
31 the affirmation to the parent of the enrichment student and
32 terminate the account.
33 Sec. 9. Distributions made to an account under section 2 of this
34 chapter or money in the account may not be treated as income or
35 a resource for purposes of qualifying for any other federal or state
36 grant or program administered by the state or a political
37 subdivision.
38 Chapter 5. Participating Entities
39 Sec. 1. (a) The following individuals or entities may become a
40 participating entity by submitting an application to the department
41 in a manner prescribed by the department:
42 (1) An individual who or tutoring agency that provides
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1 private tutoring.
2 (2) An individual who or entity that provides services to a
3 student with a disability in accordance with an individualized
4 education program developed under IC 20-35 or a service
5 plan developed under 511 IAC 7-34 or generally accepted
6 standards of care prescribed by the enrichment student's
7 treating physician.
8 (3) An individual who or entity that offers a course or
9 program to an enrichment student.
10 (4) An individual or entity that provides or offers a qualified
11 expense.
12 (b) The department may approve an application submitted
13 under subsection (a) if the individual or entity meets the criteria to
14 serve as a participating entity.
15 (c) Each participating entity that accepts payments made from
16 an account under this article shall provide a receipt to the parent
17 of an enrichment student for each payment made.
18 Sec. 2. (a) The department may refuse to allow a participating
19 entity to continue participation in the program and revoke the
20 participating entity's status as a participating entity if the
21 department determines that the participating entity accepts
22 payments made from an account under this article and:
23 (1) has failed to provide any educational service required by
24 state or federal law to an enrichment student receiving
25 instruction from the participating entity; or
26 (2) has routinely failed to meet the requirements of a
27 participating entity under the program.
28 (b) If the department revokes a participating entity's status as
29 a participating entity in the program, the department shall provide
30 notice of the revocation within thirty (30) days of the revocation to
31 each parent of an enrichment student receiving instruction from
32 the participating entity who has paid the participating entity from
33 the enrichment student's account.
34 (c) The department may permit a former participating entity
35 described in subsection (a) to reapply with the department for
36 authorization to be a participating entity on a date established by
37 the department, which may not be earlier than one (1) year after
38 the date on which the former participating entity's status as a
39 participating entity was revoked under subsection (a). The
40 department may establish reasonable criteria or requirements that
41 the former participating entity must meet before being reapproved
42 by the department as a participating entity.
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1 Sec. 3. An approved participating entity:
2 (1) may not charge an enrichment student participating in the
3 program an amount greater than a similarly situated student
4 who is receiving the same or similar services; and
5 (2) shall provide a receipt to a parent of an enrichment
6 student for each qualified expense charged for education or
7 related services provided to the enrichment student.
8 Sec. 4. The department shall annually make available on the
9 department's Internet web site a list of participating entities.
10 Chapter 6. Rulemaking
11 Sec. 1. The state board may adopt rules under IC 4-22-2,
12 including emergency rules in the manner provided under
13 IC 4-22-2-37.1, necessary to administer this article.
14 SECTION 3. An emergency is declared for this act.
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