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 ENROLLED ACT No. 1303
AN ACT to amend the Indiana Code concerning taxation.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 6-3-3-12, AS AMENDED BY P.L.154-2020,
SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2024]: 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 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.
(3) Money that is credited to an account and that will be
transferred to an from any qualified ABLE program under
HEA 1303 — Concur 2
account (as defined in Section 529A of the Internal Revenue Code
or 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, except that the term does
not include qualified education loan repayments under Section
529(c)(9) of the Internal Revenue Code.
(h) As used in this section, "qualified K-12 education expenses"
means expenses that are for tuition in connection with enrollment or
attendance at an elementary or secondary public, private, or religious
school located in Indiana and are permitted under Section 529 of the
Internal Revenue Code.
(i) 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.
However, a qualified withdrawal does not include a withdrawal or
distribution that will be used for expenses that are for tuition in
connection with enrollment or attendance at an elementary or
secondary public, private, or religious school unless the school is
located in Indiana. 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, to any qualified ABLE program under
Section 529A other than an Indiana ABLE 529A savings plan
adopted by the state under IC 12-11, or to any other similar plan.
(j) As used in this section, "taxpayer" means:
HEA 1303 — Concur 3
(1) an individual filing a single return;
(2) a married couple filing a joint return; or
(3) for taxable years beginning after December 31, 2019, a
married individual filing a separate return.
(k) 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) The following amount:
(A) For taxable years beginning before January 1, 2019, the
sum of twenty percent (20%) multiplied by the amount of the
total contributions that are made by the taxpayer to an account
or accounts of a college choice 529 education savings plan
during the taxable year and that will be used to pay for
qualified higher education expenses that are not qualified K-12
education expenses, plus the lesser of:
(i) five hundred dollars ($500); or
(ii) ten percent (10%) multiplied by the amount of the total
contributions that are made by the taxpayer to an account or
accounts of a college choice 529 education savings plan
during the taxable year and that will be used to pay for
qualified K-12 education expenses.
(B) For taxable years beginning after December 31, 2018, the
sum of:
(i) twenty percent (20%) multiplied by the amount of the
total contributions that are made by the taxpayer to an
account or accounts of a college choice 529 education
savings plan during the taxable year and that are designated
to pay for qualified higher education expenses that are not
qualified K-12 education expenses; plus
(ii) twenty percent (20%) multiplied by the amount of the
total contributions that are made by the taxpayer to an
account or accounts of a college choice 529 education
savings plan during the taxable year and that are designated
to pay for qualified K-12 education expenses.
(2) One thousand dollars ($1,000), or five hundred dollars ($500)
in the case of a married individual filing a separate return.
(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.
(l) This subsection applies after December 31, 2018. At the time a
contribution is made to or a withdrawal is made from an account or
HEA 1303 — Concur 4
accounts of a college choice 529 education savings plan, the person
making the contribution or withdrawal shall designate whether the
contribution is made for or the withdrawal will be used for:
(1) qualified higher education expenses that are not qualified
K-12 education expenses; or
(2) qualified K-12 education expenses.
The Indiana education savings authority (IC 21-9-3) shall use
subaccounting to track the designations.
(m) A taxpayer who makes a contribution to a college choice 529
education savings plan is considered to have made the contribution on
the date that:
(1) the taxpayer's contribution is postmarked or accepted by a
delivery service, for contributions that are submitted to a college
choice 529 education savings plan by mail or delivery service; or
(2) the taxpayer's electronic funds transfer is initiated, for
contributions that are submitted to a college choice 529 education
savings plan by electronic funds transfer.
(n) A taxpayer is not entitled to a carryback, carryover, or refund of
an unused credit.
(o) A taxpayer may not sell, assign, convey, or otherwise transfer the
tax credit provided by this section.
(p) 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.
(q) 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.
(r) Any required repayment under subsection (q) shall be reported
by the account owner on the account owner's annual state income tax
HEA 1303 — Concur 5
return for any taxable year in which a nonqualified withdrawal is made.
(s) 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.
(t) 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, including
subaccounts of a college choice 529 education savings plan for
the taxable year; or
(2) account closings for the taxable year.
SECTION 2. IC 6-3-3-12.1 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2024]: Sec. 12.1. (a) As used in this section, "ABLE
account" has the meaning set forth in IC 12-11-14-1.
(b) As used in this section, "contribution" means the amount of
money directly provided to an Indiana ABLE 529A savings plan
account by a taxpayer. A contribution does not include any of the
following:
(1) Money credited to an ABLE 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 ABLE account.
(2) Money transferred from any qualified ABLE program
under Section 529A of the Internal Revenue Code or from any
other similar plan.
(3) Money transferred from any qualified tuition program
under Section 529 of the Internal Revenue Code or from any
other similar plan.
(c) As used in this section, "designated beneficiary" has the
meaning set forth in IC 12-11-14-5.
(d) As used in this section, "Indiana ABLE 529A savings plan"
refers to the Achieving a Better Life Experience (ABLE) 529A plan
established under IC 12-11.
(e) As used in this section, "nonqualified withdrawal" means a
withdrawal or distribution from an Indiana ABLE 529A savings
plan that is not a qualified withdrawal.
(f) As used in this section, "qualified disability expense" has the
meaning set forth in IC 12-11-14-8.
HEA 1303 — Concur 6
(g) As used in this section, "qualified withdrawal" means a
withdrawal or distribution from an Indiana ABLE 529A savings
plan that is made:
(1) to pay for qualified disability expenses, excluding any
withdrawals or distributions used to pay for qualified
disability expenses, if the withdrawals or distributions are
made from an Indiana ABLE 529A savings plan that is
terminated within twelve (12) months after the ABLE account
is opened;
(2) as a result of the death of a designated beneficiary; or
(3) by an Indiana ABLE 529A savings plan as the result of a
transfer of funds by an Indiana ABLE 529A savings plan
from one (1) third party custodian to another.
A qualified withdrawal does not include a rollover distribution or
transfer of assets from an Indiana ABLE 529A savings plan to any
other qualified ABLE program under Section 529A of the Internal
Revenue Code, or to any qualified tuition program under Section
529 of the Internal Revenue Code other than a college choice 529
saving plan established under IC 21-9, or to any other similar plan.
(h) As used in this section, "taxpayer" means:
(1) an individual filing a single return;
(2) a married couple filing a joint return; or
(3) a married individual filing a separate return.
(i) 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 ABLE account or
accounts of an Indiana ABLE 529A savings plan during the
taxable year.
(2) Five hundred dollars ($500).
(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.
(j) A taxpayer is not entitled to a carryback, carryover, or
refund of an unused credit.
(k) A taxpayer may not sell, assign, convey, or otherwise
transfer the tax credit provided by this section.
(l) 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
HEA 1303 — Concur 7
shall submit to the department all information that the department
determines is necessary for the calculation of the credit provided
by this section.
(m) An owner of an ABLE account of an Indiana ABLE 529A
savings plan must repay all or a part of the credit in a taxable year
in which any nonqualified withdrawal is made from the ABLE
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 ABLE
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 ABLE account for all
prior taxable years; over
(B) the cumulative amount of repayments paid by the
owner of the ABLE account under this subsection for all
prior taxable years.
(n) Any required repayment under subsection (m) must be
reported by the owner of the ABLE account on the owner's annual
state income tax return for any taxable year in which a
nonqualified withdrawal is made.
(o) A nonresident owner of an ABLE account 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 owner of the ABLE account does not make the
required repayment, the department shall issue a demand notice in
accordance with IC 6-8.1-5-1.
(p) The executive director of the Indiana ABLE authority shall
submit or cause to be submitted to the department a copy of all
information returns or statements issued to ABLE account owners,
designated beneficiaries, and other taxpayers for each taxable year
with respect to:
(1) nonqualified withdrawals made from ABLE accounts for
the taxable year; or
(2) ABLE account closings for the taxable year.
SECTION 3. [EFFECTIVE JANUARY 1, 2024] (a) IC 6-3-3-12.1,
as added by this act, and IC 6-3-3-12, as amended by this act, apply
to taxable years beginning after December 31, 2023.
(b) This SECTION expires January 1, 2027.
HEA 1303 — Concur Speaker of the House of Representatives
President of the Senate
President Pro Tempore
Governor of the State of Indiana
Date: Time:
HEA 1303 — Concur