Indiana 2022 Regular Session

Indiana House Bill HB1303 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	HB1303.1
	2	+	January 24, 2022
	3	+	HOUSE BILL No. 1303
	4	+	_____
	5	+	DIGEST OF HB 1303 (Updated January 20, 2022 7:38 pm - DI 134)
	6	+	Citations Affected: IC 6-3; noncode.
	7	+	Synopsis: Tax credit for ABLE account contributions. Creates a stand-
	8	+	alone credit for contributions to Indiana ABLE accounts. Provides that
	9	+	a taxpayer is entitled to a credit against adjusted gross income tax equal
	10	+	to the least of: (1) 20% of the amount of the total contributions made
	11	+	by the taxpayer to an account or accounts of an Indiana ABLE 529A
	12	+	savings plan during the taxable year; (2) $500; or (3) the amount of the
	13	+	taxpayer's adjusted gross income tax for the taxable year, reduced by
	14	+	the sum of all allowable credits. Provides that a taxpayer is not entitled
	15	+	to a carryback, carryover, or refund of an unused credit. Provides that
	16	+	a taxpayer may not sell, assign, convey, or otherwise transfer the tax
	17	+	credit. Provides that an account owner of an Indiana ABLE 529A
	18	+	savings plan must repay all or a part of the credit in a taxable year in
	19	+	which any nonqualified withdrawal is made.
	20	+	Effective: January 1, 2023.
	21	+	Olthoff, Karickhoff, Davisson J.,
	22	+	Clere
	23	+	January 11, 2022, read first time and referred to Committee on Ways and Means.
	24	+	January 24, 2022, amended, reported — Do Pass.
	25	+	HB 1303—LS 6935/DI 129 January 24, 2022
1	26		Second Regular Session of the 122nd General Assembly (2022)
2	27		PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
3	28		Constitution) is being amended, the text of the existing provision will appear in this style type,
4	29		additions will appear in this style type, and deletions will appear in this style type.
5	30		Additions: Whenever a new statutory provision is being enacted (or a new constitutional
6	31		provision adopted), the text of the new provision will appear in this style type. Also, the
7	32		word NEW will appear in that style type in the introductory clause of each SECTION that adds
8	33		a new provision to the Indiana Code or the Indiana Constitution.
9	34		Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
10	35		between statutes enacted by the 2021 Regular Session of the General Assembly.
11		-	HOUSE ENROLLED ACT No. 1303
12		-	AN ACT to amend the Indiana Code concerning taxation.
	36	+	HOUSE BILL No. 1303
	37	+	A BILL FOR AN ACT to amend the Indiana Code concerning
	38	+	taxation.
13	39		Be it enacted by the General Assembly of the State of Indiana:
14		-	SECTION 1. IC 6-3-3-12, AS AMENDED BY P.L.154-2020,
15		-	SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
16		-	JANUARY 1, 2024]: Sec. 12. (a) As used in this section, "account" has
17		-	the meaning set forth in IC 21-9-2-2.
18		-	(b) As used in this section, "account beneficiary" has the meaning
19		-	set forth in IC 21-9-2-3.
20		-	(c) As used in this section, "account owner" has the meaning set
21		-	forth in IC 21-9-2-4.
22		-	(d) As used in this section, "college choice 529 education savings
23		-	plan" refers to a college choice 529 plan established under IC 21-9.
24		-	(e) As used in this section, "contribution" means the amount of
25		-	money directly provided to a college choice 529 education savings plan
26		-	account by a taxpayer. A contribution does not include any of the
27		-	following:
28		-	(1) Money credited to an account as a result of bonus points or
29		-	other forms of consideration earned by the taxpayer that result in
30		-	a transfer of money to the account.
31		-	(2) Money transferred from any other qualified tuition program
32		-	under Section 529 of the Internal Revenue Code or from any other
33		-	similar plan.
34		-	(3) Money that is credited to an account and that will be
35		-	transferred to an from any qualified ABLE program under
36		-	HEA 1303 — Concur 2
37		-	account (as defined in Section 529A of the Internal Revenue Code
38		-	or any other similar plan.
39		-	(f) As used in this section, "nonqualified withdrawal" means a
40		-	withdrawal or distribution from a college choice 529 education savings
41		-	plan that is not a qualified withdrawal.
42		-	(g) As used in this section, "qualified higher education expenses"
43		-	has the meaning set forth in IC 21-9-2-19.5, except that the term does
44		-	not include qualified education loan repayments under Section
45		-	529(c)(9) of the Internal Revenue Code.
46		-	(h) As used in this section, "qualified K-12 education expenses"
47		-	means expenses that are for tuition in connection with enrollment or
48		-	attendance at an elementary or secondary public, private, or religious
49		-	school located in Indiana and are permitted under Section 529 of the
50		-	Internal Revenue Code.
51		-	(i) As used in this section, "qualified withdrawal" means a
52		-	withdrawal or distribution from a college choice 529 education savings
53		-	plan that is made:
54		-	(1) to pay for qualified higher education expenses, excluding any
55		-	withdrawals or distributions used to pay for qualified higher
56		-	education expenses, if the withdrawals or distributions are made
57		-	from an account of a college choice 529 education savings plan
58		-	that is terminated within twelve (12) months after the account is
59		-	opened;
60		-	(2) as a result of the death or disability of an account beneficiary;
61		-	(3) because an account beneficiary received a scholarship that
62		-	paid for all or part of the qualified higher education expenses of
63		-	the account beneficiary, to the extent that the withdrawal or
64		-	distribution does not exceed the amount of the scholarship; or
65		-	(4) by a college choice 529 education savings plan as the result of
66		-	a transfer of funds by a college choice 529 education savings plan
67		-	from one (1) third party custodian to another.
68		-	However, a qualified withdrawal does not include a withdrawal or
69		-	distribution that will be used for expenses that are for tuition in
70		-	connection with enrollment or attendance at an elementary or
71		-	secondary public, private, or religious school unless the school is
72		-	located in Indiana. A qualified withdrawal does not include a rollover
73		-	distribution or transfer of assets from a college choice 529 education
74		-	savings plan to any other qualified tuition program under Section 529
75		-	of the Internal Revenue Code, to any qualified ABLE program under
76		-	Section 529A other than an Indiana ABLE 529A savings plan
77		-	adopted by the state under IC 12-11, or to any other similar plan.
78		-	(j) As used in this section, "taxpayer" means:
79		-	HEA 1303 — Concur 3
80		-	(1) an individual filing a single return;
81		-	(2) a married couple filing a joint return; or
82		-	(3) for taxable years beginning after December 31, 2019, a
83		-	married individual filing a separate return.
84		-	(k) A taxpayer is entitled to a credit against the taxpayer's adjusted
85		-	gross income tax imposed by IC 6-3-1 through IC 6-3-7 for a taxable
86		-	year equal to the least of the following:
87		-	(1) The following amount:
88		-	(A) For taxable years beginning before January 1, 2019, the
89		-	sum of twenty percent (20%) multiplied by the amount of the
90		-	total contributions that are made by the taxpayer to an account
91		-	or accounts of a college choice 529 education savings plan
92		-	during the taxable year and that will be used to pay for
93		-	qualified higher education expenses that are not qualified K-12
94		-	education expenses, plus the lesser of:
95		-	(i) five hundred dollars ($500); or
96		-	(ii) ten percent (10%) multiplied by the amount of the total
97		-	contributions that are made by the taxpayer to an account or
98		-	accounts of a college choice 529 education savings plan
99		-	during the taxable year and that will be used to pay for
100		-	qualified K-12 education expenses.
101		-	(B) For taxable years beginning after December 31, 2018, the
102		-	sum of:
103		-	(i) twenty percent (20%) multiplied by the amount of the
104		-	total contributions that are made by the taxpayer to an
105		-	account or accounts of a college choice 529 education
106		-	savings plan during the taxable year and that are designated
107		-	to pay for qualified higher education expenses that are not
108		-	qualified K-12 education expenses; plus
109		-	(ii) twenty percent (20%) multiplied by the amount of the
110		-	total contributions that are made by the taxpayer to an
111		-	account or accounts of a college choice 529 education
112		-	savings plan during the taxable year and that are designated
113		-	to pay for qualified K-12 education expenses.
114		-	(2) One thousand dollars ($1,000), or five hundred dollars ($500)
115		-	in the case of a married individual filing a separate return.
116		-	(3) The amount of the taxpayer's adjusted gross income tax
117		-	imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
118		-	reduced by the sum of all credits (as determined without regard to
119		-	this section) allowed by IC 6-3-1 through IC 6-3-7.
120		-	(l) This subsection applies after December 31, 2018. At the time a
121		-	contribution is made to or a withdrawal is made from an account or
122		-	HEA 1303 — Concur 4
123		-	accounts of a college choice 529 education savings plan, the person
124		-	making the contribution or withdrawal shall designate whether the
125		-	contribution is made for or the withdrawal will be used for:
126		-	(1) qualified higher education expenses that are not qualified
127		-	K-12 education expenses; or
128		-	(2) qualified K-12 education expenses.
129		-	The Indiana education savings authority (IC 21-9-3) shall use
130		-	subaccounting to track the designations.
131		-	(m) A taxpayer who makes a contribution to a college choice 529
132		-	education savings plan is considered to have made the contribution on
133		-	the date that:
134		-	(1) the taxpayer's contribution is postmarked or accepted by a
135		-	delivery service, for contributions that are submitted to a college
136		-	choice 529 education savings plan by mail or delivery service; or
137		-	(2) the taxpayer's electronic funds transfer is initiated, for
138		-	contributions that are submitted to a college choice 529 education
139		-	savings plan by electronic funds transfer.
140		-	(n) A taxpayer is not entitled to a carryback, carryover, or refund of
141		-	an unused credit.
142		-	(o) A taxpayer may not sell, assign, convey, or otherwise transfer the
143		-	tax credit provided by this section.
144		-	(p) To receive the credit provided by this section, a taxpayer must
145		-	claim the credit on the taxpayer's annual state tax return or returns in
146		-	the manner prescribed by the department. The taxpayer shall submit to
147		-	the department all information that the department determines is
148		-	necessary for the calculation of the credit provided by this section.
149		-	(q) An account owner of an account of a college choice 529
150		-	education savings plan must repay all or a part of the credit in a taxable
151		-	year in which any nonqualified withdrawal is made from the account.
152		-	The amount the taxpayer must repay is equal to the lesser of:
153		-	(1) twenty percent (20%) of the total amount of nonqualified
154		-	withdrawals made during the taxable year from the account; or
155		-	(2) the excess of:
156		-	(A) the cumulative amount of all credits provided by this
157		-	section that are claimed by any taxpayer with respect to the
158		-	taxpayer's contributions to the account for all prior taxable
159		-	years beginning on or after January 1, 2007; over
160		-	(B) the cumulative amount of repayments paid by the account
161		-	owner under this subsection for all prior taxable years
162		-	beginning on or after January 1, 2008.
163		-	(r) Any required repayment under subsection (q) shall be reported
164		-	by the account owner on the account owner's annual state income tax
165		-	HEA 1303 — Concur 5
166		-	return for any taxable year in which a nonqualified withdrawal is made.
167		-	(s) A nonresident account owner who is not required to file an
168		-	annual income tax return for a taxable year in which a nonqualified
169		-	withdrawal is made shall make any required repayment on the form
170		-	required under IC 6-3-4-1(2). If the nonresident account owner does
171		-	not make the required repayment, the department shall issue a demand
172		-	notice in accordance with IC 6-8.1-5-1.
173		-	(t) The executive director of the Indiana education savings authority
174		-	shall submit or cause to be submitted to the department a copy of all
175		-	information returns or statements issued to account owners, account
176		-	beneficiaries, and other taxpayers for each taxable year with respect to:
177		-	(1) nonqualified withdrawals made from accounts, including
178		-	subaccounts of a college choice 529 education savings plan for
179		-	the taxable year; or
180		-	(2) account closings for the taxable year.
181		-	SECTION 2. IC 6-3-3-12.1 IS ADDED TO THE INDIANA CODE
182		-	AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
183		-	JANUARY 1, 2024]: Sec. 12.1. (a) As used in this section, "ABLE
184		-	account" has the meaning set forth in IC 12-11-14-1.
185		-	(b) As used in this section, "contribution" means the amount of
186		-	money directly provided to an Indiana ABLE 529A savings plan
187		-	account by a taxpayer. A contribution does not include any of the
188		-	following:
189		-	(1) Money credited to an ABLE account as a result of bonus
190		-	points or other forms of consideration earned by the taxpayer
191		-	that result in a transfer of money to the ABLE account.
192		-	(2) Money transferred from any qualified ABLE program
193		-	under Section 529A of the Internal Revenue Code or from any
194		-	other similar plan.
195		-	(3) Money transferred from any qualified tuition program
196		-	under Section 529 of the Internal Revenue Code or from any
197		-	other similar plan.
198		-	(c) As used in this section, "designated beneficiary" has the
199		-	meaning set forth in IC 12-11-14-5.
200		-	(d) As used in this section, "Indiana ABLE 529A savings plan"
201		-	refers to the Achieving a Better Life Experience (ABLE) 529A plan
202		-	established under IC 12-11.
203		-	(e) As used in this section, "nonqualified withdrawal" means a
204		-	withdrawal or distribution from an Indiana ABLE 529A savings
205		-	plan that is not a qualified withdrawal.
206		-	(f) As used in this section, "qualified disability expense" has the
207		-	meaning set forth in IC 12-11-14-8.
208		-	HEA 1303 — Concur 6
209		-	(g) As used in this section, "qualified withdrawal" means a
210		-	withdrawal or distribution from an Indiana ABLE 529A savings
211		-	plan that is made:
212		-	(1) to pay for qualified disability expenses, excluding any
213		-	withdrawals or distributions used to pay for qualified
214		-	disability expenses, if the withdrawals or distributions are
215		-	made from an Indiana ABLE 529A savings plan that is
216		-	terminated within twelve (12) months after the ABLE account
217		-	is opened;
218		-	(2) as a result of the death of a designated beneficiary; or
219		-	(3) by an Indiana ABLE 529A savings plan as the result of a
220		-	transfer of funds by an Indiana ABLE 529A savings plan
221		-	from one (1) third party custodian to another.
222		-	A qualified withdrawal does not include a rollover distribution or
223		-	transfer of assets from an Indiana ABLE 529A savings plan to any
224		-	other qualified ABLE program under Section 529A of the Internal
225		-	Revenue Code, or to any qualified tuition program under Section
226		-	529 of the Internal Revenue Code other than a college choice 529
227		-	saving plan established under IC 21-9, or to any other similar plan.
228		-	(h) As used in this section, "taxpayer" means:
229		-	(1) an individual filing a single return;
230		-	(2) a married couple filing a joint return; or
231		-	(3) a married individual filing a separate return.
232		-	(i) A taxpayer is entitled to a credit against the taxpayer's
233		-	adjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7
234		-	for a taxable year equal to the least of the following:
235		-	(1) Twenty percent (20%) of the amount of the total
236		-	contributions made by the taxpayer to an ABLE account or
237		-	accounts of an Indiana ABLE 529A savings plan during the
238		-	taxable year.
239		-	(2) Five hundred dollars ($500).
240		-	(3) The amount of the taxpayer's adjusted gross income tax
241		-	imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
242		-	reduced by the sum of all credits (as determined without
243		-	regard to this section) allowed by IC 6-3-1 through IC 6-3-7.
244		-	(j) A taxpayer is not entitled to a carryback, carryover, or
245		-	refund of an unused credit.
246		-	(k) A taxpayer may not sell, assign, convey, or otherwise
247		-	transfer the tax credit provided by this section.
248		-	(l) To receive the credit provided by this section, a taxpayer
249		-	must claim the credit on the taxpayer's annual state tax return or
250		-	returns in the manner prescribed by the department. The taxpayer
251		-	HEA 1303 — Concur 7
252		-	shall submit to the department all information that the department
253		-	determines is necessary for the calculation of the credit provided
254		-	by this section.
255		-	(m) An owner of an ABLE account of an Indiana ABLE 529A
256		-	savings plan must repay all or a part of the credit in a taxable year
257		-	in which any nonqualified withdrawal is made from the ABLE
258		-	account. The amount the taxpayer must repay is equal to the lesser
259		-	of:
260		-	(1) twenty percent (20%) of the total amount of nonqualified
261		-	withdrawals made during the taxable year from the ABLE
262		-	account; or
263		-	(2) the excess of:
264		-	(A) the cumulative amount of all credits provided by this
265		-	section that are claimed by any taxpayer with respect to
266		-	the taxpayer's contributions to the ABLE account for all
267		-	prior taxable years; over
268		-	(B) the cumulative amount of repayments paid by the
269		-	owner of the ABLE account under this subsection for all
270		-	prior taxable years.
271		-	(n) Any required repayment under subsection (m) must be
272		-	reported by the owner of the ABLE account on the owner's annual
273		-	state income tax return for any taxable year in which a
274		-	nonqualified withdrawal is made.
275		-	(o) A nonresident owner of an ABLE account who is not
276		-	required to file an annual income tax return for a taxable year in
277		-	which a nonqualified withdrawal is made shall make any required
278		-	repayment on the form required under IC 6-3-4-1(2). If the
279		-	nonresident owner of the ABLE account does not make the
280		-	required repayment, the department shall issue a demand notice in
281		-	accordance with IC 6-8.1-5-1.
282		-	(p) The executive director of the Indiana ABLE authority shall
283		-	submit or cause to be submitted to the department a copy of all
284		-	information returns or statements issued to ABLE account owners,
285		-	designated beneficiaries, and other taxpayers for each taxable year
286		-	with respect to:
287		-	(1) nonqualified withdrawals made from ABLE accounts for
288		-	the taxable year; or
289		-	(2) ABLE account closings for the taxable year.
290		-	SECTION 3. [EFFECTIVE JANUARY 1, 2024] (a) IC 6-3-3-12.1,
291		-	as added by this act, and IC 6-3-3-12, as amended by this act, apply
292		-	to taxable years beginning after December 31, 2023.
293		-	(b) This SECTION expires January 1, 2027.
294		-	HEA 1303 — Concur Speaker of the House of Representatives
295		-	President of the Senate
296		-	President Pro Tempore
297		-	Governor of the State of Indiana
298		-	Date: Time:
299		-	HEA 1303 — Concur
	40	+	1 SECTION 1. IC 6-3-3-12, AS AMENDED BY P.L.154-2020,
	41	+	2 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
	42	+	3 JANUARY 1, 2023]: Sec. 12. (a) As used in this section, "account" has
	43	+	4 the meaning set forth in IC 21-9-2-2.
	44	+	5 (b) As used in this section, "account beneficiary" has the meaning
	45	+	6 set forth in IC 21-9-2-3.
	46	+	7 (c) As used in this section, "account owner" has the meaning set
	47	+	8 forth in IC 21-9-2-4.
	48	+	9 (d) As used in this section, "college choice 529 education savings
	49	+	10 plan" refers to a college choice 529 plan established under IC 21-9.
	50	+	11 (e) As used in this section, "contribution" means the amount of
	51	+	12 money directly provided to a college choice 529 education savings plan
	52	+	13 account by a taxpayer. A contribution does not include any of the
	53	+	14 following:
	54	+	15 (1) Money credited to an account as a result of bonus points or
	55	+	16 other forms of consideration earned by the taxpayer that result in
	56	+	17 a transfer of money to the account.
	57	+	HB 1303—LS 6935/DI 129 2
	58	+	1 (2) Money transferred from any other qualified tuition program
	59	+	2 under Section 529 of the Internal Revenue Code or from any other
	60	+	3 similar plan.
	61	+	4 (3) Money that is credited to an account and that will be
	62	+	5 transferred to an from any qualified ABLE program under
	63	+	6 account (as defined in Section 529A of the Internal Revenue Code
	64	+	7 or any other similar plan.
	65	+	8 (f) As used in this section, "nonqualified withdrawal" means a
	66	+	9 withdrawal or distribution from a college choice 529 education savings
	67	+	10 plan that is not a qualified withdrawal.
	68	+	11 (g) As used in this section, "qualified higher education expenses"
	69	+	12 has the meaning set forth in IC 21-9-2-19.5, except that the term does
	70	+	13 not include qualified education loan repayments under Section
	71	+	14 529(c)(9) of the Internal Revenue Code.
	72	+	15 (h) As used in this section, "qualified K-12 education expenses"
	73	+	16 means expenses that are for tuition in connection with enrollment or
	74	+	17 attendance at an elementary or secondary public, private, or religious
	75	+	18 school located in Indiana and are permitted under Section 529 of the
	76	+	19 Internal Revenue Code.
	77	+	20 (i) As used in this section, "qualified withdrawal" means a
	78	+	21 withdrawal or distribution from a college choice 529 education savings
	79	+	22 plan that is made:
	80	+	23 (1) to pay for qualified higher education expenses, excluding any
	81	+	24 withdrawals or distributions used to pay for qualified higher
	82	+	25 education expenses, if the withdrawals or distributions are made
	83	+	26 from an account of a college choice 529 education savings plan
	84	+	27 that is terminated within twelve (12) months after the account is
	85	+	28 opened;
	86	+	29 (2) as a result of the death or disability of an account beneficiary;
	87	+	30 (3) because an account beneficiary received a scholarship that
	88	+	31 paid for all or part of the qualified higher education expenses of
	89	+	32 the account beneficiary, to the extent that the withdrawal or
	90	+	33 distribution does not exceed the amount of the scholarship; or
	91	+	34 (4) by a college choice 529 education savings plan as the result of
	92	+	35 a transfer of funds by a college choice 529 education savings plan
	93	+	36 from one (1) third party custodian to another.
	94	+	37 However, a qualified withdrawal does not include a withdrawal or
	95	+	38 distribution that will be used for expenses that are for tuition in
	96	+	39 connection with enrollment or attendance at an elementary or
	97	+	40 secondary public, private, or religious school unless the school is
	98	+	41 located in Indiana. A qualified withdrawal does not include a rollover
	99	+	42 distribution or transfer of assets from a college choice 529 education
	100	+	HB 1303—LS 6935/DI 129 3
	101	+	1 savings plan to any other qualified tuition program under Section 529
	102	+	2 of the Internal Revenue Code, to any qualified ABLE program under
	103	+	3 Section 529A other than an Indiana ABLE 529A savings plan
	104	+	4 adopted by the state under IC 12-11, or to any other similar plan.
	105	+	5 (j) As used in this section, "taxpayer" means:
	106	+	6 (1) an individual filing a single return;
	107	+	7 (2) a married couple filing a joint return; or
	108	+	8 (3) for taxable years beginning after December 31, 2019, a
	109	+	9 married individual filing a separate return.
	110	+	10 (k) A taxpayer is entitled to a credit against the taxpayer's adjusted
	111	+	11 gross income tax imposed by IC 6-3-1 through IC 6-3-7 for a taxable
	112	+	12 year equal to the least of the following:
	113	+	13 (1) The following amount:
	114	+	14 (A) For taxable years beginning before January 1, 2019, the
	115	+	15 sum of twenty percent (20%) multiplied by the amount of the
	116	+	16 total contributions that are made by the taxpayer to an account
	117	+	17 or accounts of a college choice 529 education savings plan
	118	+	18 during the taxable year and that will be used to pay for
	119	+	19 qualified higher education expenses that are not qualified K-12
	120	+	20 education expenses, plus the lesser of:
	121	+	21 (i) five hundred dollars ($500); or
	122	+	22 (ii) ten percent (10%) multiplied by the amount of the total
	123	+	23 contributions that are made by the taxpayer to an account or
	124	+	24 accounts of a college choice 529 education savings plan
	125	+	25 during the taxable year and that will be used to pay for
	126	+	26 qualified K-12 education expenses.
	127	+	27 (B) For taxable years beginning after December 31, 2018, the
	128	+	28 sum of:
	129	+	29 (i) twenty percent (20%) multiplied by the amount of the
	130	+	30 total contributions that are made by the taxpayer to an
	131	+	31 account or accounts of a college choice 529 education
	132	+	32 savings plan during the taxable year and that are designated
	133	+	33 to pay for qualified higher education expenses that are not
	134	+	34 qualified K-12 education expenses; plus
	135	+	35 (ii) twenty percent (20%) multiplied by the amount of the
	136	+	36 total contributions that are made by the taxpayer to an
	137	+	37 account or accounts of a college choice 529 education
	138	+	38 savings plan during the taxable year and that are designated
	139	+	39 to pay for qualified K-12 education expenses.
	140	+	40 (2) One thousand dollars ($1,000), or five hundred dollars ($500)
	141	+	41 in the case of a married individual filing a separate return.
	142	+	42 (3) The amount of the taxpayer's adjusted gross income tax
	143	+	HB 1303—LS 6935/DI 129 4
	144	+	1 imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
	145	+	2 reduced by the sum of all credits (as determined without regard to
	146	+	3 this section) allowed by IC 6-3-1 through IC 6-3-7.
	147	+	4 (l) This subsection applies after December 31, 2018. At the time a
	148	+	5 contribution is made to or a withdrawal is made from an account or
	149	+	6 accounts of a college choice 529 education savings plan, the person
	150	+	7 making the contribution or withdrawal shall designate whether the
	151	+	8 contribution is made for or the withdrawal will be used for:
	152	+	9 (1) qualified higher education expenses that are not qualified
	153	+	10 K-12 education expenses; or
	154	+	11 (2) qualified K-12 education expenses.
	155	+	12 The Indiana education savings authority (IC 21-9-3) shall use
	156	+	13 subaccounting to track the designations.
	157	+	14 (m) A taxpayer who makes a contribution to a college choice 529
	158	+	15 education savings plan is considered to have made the contribution on
	159	+	16 the date that:
	160	+	17 (1) the taxpayer's contribution is postmarked or accepted by a
	161	+	18 delivery service, for contributions that are submitted to a college
	162	+	19 choice 529 education savings plan by mail or delivery service; or
	163	+	20 (2) the taxpayer's electronic funds transfer is initiated, for
	164	+	21 contributions that are submitted to a college choice 529 education
	165	+	22 savings plan by electronic funds transfer.
	166	+	23 (n) A taxpayer is not entitled to a carryback, carryover, or refund of
	167	+	24 an unused credit.
	168	+	25 (o) A taxpayer may not sell, assign, convey, or otherwise transfer the
	169	+	26 tax credit provided by this section.
	170	+	27 (p) To receive the credit provided by this section, a taxpayer must
	171	+	28 claim the credit on the taxpayer's annual state tax return or returns in
	172	+	29 the manner prescribed by the department. The taxpayer shall submit to
	173	+	30 the department all information that the department determines is
	174	+	31 necessary for the calculation of the credit provided by this section.
	175	+	32 (q) An account owner of an account of a college choice 529
	176	+	33 education savings plan must repay all or a part of the credit in a taxable
	177	+	34 year in which any nonqualified withdrawal is made from the account.
	178	+	35 The amount the taxpayer must repay is equal to the lesser of:
	179	+	36 (1) twenty percent (20%) of the total amount of nonqualified
	180	+	37 withdrawals made during the taxable year from the account; or
	181	+	38 (2) the excess of:
	182	+	39 (A) the cumulative amount of all credits provided by this
	183	+	40 section that are claimed by any taxpayer with respect to the
	184	+	41 taxpayer's contributions to the account for all prior taxable
	185	+	42 years beginning on or after January 1, 2007; over
	186	+	HB 1303—LS 6935/DI 129 5
	187	+	1 (B) the cumulative amount of repayments paid by the account
	188	+	2 owner under this subsection for all prior taxable years
	189	+	3 beginning on or after January 1, 2008.
	190	+	4 (r) Any required repayment under subsection (q) shall be reported
	191	+	5 by the account owner on the account owner's annual state income tax
	192	+	6 return for any taxable year in which a nonqualified withdrawal is made.
	193	+	7 (s) A nonresident account owner who is not required to file an
	194	+	8 annual income tax return for a taxable year in which a nonqualified
	195	+	9 withdrawal is made shall make any required repayment on the form
	196	+	10 required under IC 6-3-4-1(2). If the nonresident account owner does
	197	+	11 not make the required repayment, the department shall issue a demand
	198	+	12 notice in accordance with IC 6-8.1-5-1.
	199	+	13 (t) The executive director of the Indiana education savings authority
	200	+	14 shall submit or cause to be submitted to the department a copy of all
	201	+	15 information returns or statements issued to account owners, account
	202	+	16 beneficiaries, and other taxpayers for each taxable year with respect to:
	203	+	17 (1) nonqualified withdrawals made from accounts, including
	204	+	18 subaccounts of a college choice 529 education savings plan for
	205	+	19 the taxable year; or
	206	+	20 (2) account closings for the taxable year.
	207	+	21 SECTION 2. IC 6-3-3-12.1 IS ADDED TO THE INDIANA CODE
	208	+	22 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
	209	+	23 JANUARY 1, 2023]: Sec. 12.1. (a) As used in this section, "ABLE
	210	+	24 account" has the meaning set forth in IC 12-11-14-1.
	211	+	25 (b) As used in this section, "contribution" means the amount of
	212	+	26 money directly provided to an Indiana ABLE 529A savings plan
	213	+	27 account by a taxpayer. A contribution does not include any of the
	214	+	28 following:
	215	+	29 (1) Money credited to an ABLE account as a result of bonus
	216	+	30 points or other forms of consideration earned by the taxpayer
	217	+	31 that result in a transfer of money to the ABLE account.
	218	+	32 (2) Money transferred from any qualified ABLE program
	219	+	33 under Section 529A of the Internal Revenue Code or from any
	220	+	34 other similar plan.
	221	+	35 (3) Money transferred from any qualified tuition program
	222	+	36 under Section 529 of the Internal Revenue Code or from any
	223	+	37 other similar plan.
	224	+	38 (c) As used in this section, "designated beneficiary" has the
	225	+	39 meaning set forth in IC 12-11-14-5.
	226	+	40 (d) As used in this section, "Indiana ABLE 529A savings plan"
	227	+	41 refers to the Achieving a Better Life Experience (ABLE) 529A plan
	228	+	42 established under IC 12-11.
	229	+	HB 1303—LS 6935/DI 129 6
	230	+	1 (e) As used in this section, "nonqualified withdrawal" means a
	231	+	2 withdrawal or distribution from an Indiana ABLE 529A savings
	232	+	3 plan that is not a qualified withdrawal.
	233	+	4 (f) As used in this section, "qualified disability expense" has the
	234	+	5 meaning set forth in IC 12-11-14-8.
	235	+	6 (g) As used in this section, "qualified withdrawal" means a
	236	+	7 withdrawal or distribution from an Indiana ABLE 529A savings
	237	+	8 plan that is made:
	238	+	9 (1) to pay for qualified disability expenses, excluding any
	239	+	10 withdrawals or distributions used to pay for qualified
	240	+	11 disability expenses, if the withdrawals or distributions are
	241	+	12 made from an Indiana ABLE 529A savings plan that is
	242	+	13 terminated within twelve (12) months after the ABLE account
	243	+	14 is opened;
	244	+	15 (2) as a result of the death of a designated beneficiary; or
	245	+	16 (3) by an Indiana ABLE 529A savings plan as the result of a
	246	+	17 transfer of funds by an Indiana ABLE 529A savings plan
	247	+	18 from one (1) third party custodian to another.
	248	+	19 A qualified withdrawal does not include a rollover distribution or
	249	+	20 transfer of assets from an Indiana ABLE 529A savings plan to any
	250	+	21 other qualified ABLE program under Section 529A of the Internal
	251	+	22 Revenue Code, or to any qualified tuition program under Section
	252	+	23 529 of the Internal Revenue Code other than a college choice 529
	253	+	24 saving plan established under IC 21-9, or to any other similar plan.
	254	+	25 (h) As used in this section, "taxpayer" means:
	255	+	26 (1) an individual filing a single return;
	256	+	27 (2) a married couple filing a joint return; or
	257	+	28 (3) a married individual filing a separate return.
	258	+	29 (i) A taxpayer is entitled to a credit against the taxpayer's
	259	+	30 adjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7
	260	+	31 for a taxable year equal to the least of the following:
	261	+	32 (1) Twenty percent (20%) of the amount of the total
	262	+	33 contributions made by the taxpayer to an ABLE account or
	263	+	34 accounts of an Indiana ABLE 529A savings plan during the
	264	+	35 taxable year.
	265	+	36 (2) Five hundred dollars ($500).
	266	+	37 (3) The amount of the taxpayer's adjusted gross income tax
	267	+	38 imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
	268	+	39 reduced by the sum of all credits (as determined without
	269	+	40 regard to this section) allowed by IC 6-3-1 through IC 6-3-7.
	270	+	41 (j) A taxpayer is not entitled to a carryback, carryover, or
	271	+	42 refund of an unused credit.
	272	+	HB 1303—LS 6935/DI 129 7
	273	+	1 (k) A taxpayer may not sell, assign, convey, or otherwise
	274	+	2 transfer the tax credit provided by this section.
	275	+	3 (l) To receive the credit provided by this section, a taxpayer
	276	+	4 must claim the credit on the taxpayer's annual state tax return or
	277	+	5 returns in the manner prescribed by the department. The taxpayer
	278	+	6 shall submit to the department all information that the department
	279	+	7 determines is necessary for the calculation of the credit provided
	280	+	8 by this section.
	281	+	9 (m) An owner of an ABLE account of an Indiana ABLE 529A
	282	+	10 savings plan must repay all or a part of the credit in a taxable year
	283	+	11 in which any nonqualified withdrawal is made from the ABLE
	284	+	12 account. The amount the taxpayer must repay is equal to the lesser
	285	+	13 of:
	286	+	14 (1) twenty percent (20%) of the total amount of nonqualified
	287	+	15 withdrawals made during the taxable year from the ABLE
	288	+	16 account; or
	289	+	17 (2) the excess of:
	290	+	18 (A) the cumulative amount of all credits provided by this
	291	+	19 section that are claimed by any taxpayer with respect to
	292	+	20 the taxpayer's contributions to the ABLE account for all
	293	+	21 prior taxable years; over
	294	+	22 (B) the cumulative amount of repayments paid by the
	295	+	23 owner of the ABLE account under this subsection for all
	296	+	24 prior taxable years.
	297	+	25 (n) Any required repayment under subsection (m) must be
	298	+	26 reported by the owner of the ABLE account on the owner's annual
	299	+	27 state income tax return for any taxable year in which a
	300	+	28 nonqualified withdrawal is made.
	301	+	29 (o) A nonresident owner of an ABLE account who is not
	302	+	30 required to file an annual income tax return for a taxable year in
	303	+	31 which a nonqualified withdrawal is made shall make any required
	304	+	32 repayment on the form required under IC 6-3-4-1(2). If the
	305	+	33 nonresident owner of the ABLE account does not make the
	306	+	34 required repayment, the department shall issue a demand notice in
	307	+	35 accordance with IC 6-8.1-5-1.
	308	+	36 (p) The executive director of the Indiana ABLE authority shall
	309	+	37 submit or cause to be submitted to the department a copy of all
	310	+	38 information returns or statements issued to ABLE account owners,
	311	+	39 designated beneficiaries, and other taxpayers for each taxable year
	312	+	40 with respect to:
	313	+	41 (1) nonqualified withdrawals made from ABLE accounts for
	314	+	42 the taxable year; or
	315	+	HB 1303—LS 6935/DI 129 8
	316	+	1 (2) ABLE account closings for the taxable year.
	317	+	2 SECTION 3. [EFFECTIVE JANUARY 1, 2023] (a) IC 6-3-3-12.1,
	318	+	3 as added by this act, and IC 6-3-3-12, as amended by this act, apply
	319	+	4 to taxable years beginning after December 31, 2022.
	320	+	5 (b) This SECTION expires January 1, 2026.
	321	+	HB 1303—LS 6935/DI 129 9
	322	+	COMMITTEE REPORT
	323	+	Mr. Speaker: Your Committee on Ways and Means, to which was
	324	+	referred House Bill 1303, has had the same under consideration and
	325	+	begs leave to report the same back to the House with the
	326	+	recommendation that said bill be amended as follows:
	327	+	Page 6, line 36, delete "One thousand dollars ($1,000), or five" and
	328	+	insert "Five".
	329	+	Page 6, line 37, after "(500)" insert ".".
	330	+	Page 6, line 37, delete "in the case of a married individual filing a
	331	+	separate".
	332	+	Page 6, delete line 38.
	333	+	and when so amended that said bill do pass.
	334	+	(Reference is to HB 1303 as introduced.)
	335	+	BROWN T
	336	+	Committee Vote: yeas 20, nays 0.
	337	+	HB 1303—LS 6935/DI 129