Indiana 2022 Regular Session

Indiana House Bill HB1382 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	HOUSE BILL No. 1382
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 6-3-3-12.
7	7	Synopsis: College savings tax credit. Provides that "qualified higher
8	8	education expense" includes qualified education loan repayments under
9	9	Section 529(c)(9) of the Internal Revenue Code.
10	10	Effective: July 1, 2022.
11	11	Klinker, Davis
12	12	January 11, 2022, read first time and referred to Committee on Ways and Means.
13	13	2022 IN 1382—LS 6382/DI 134 Introduced
14	14	Second Regular Session of the 122nd General Assembly (2022)
15	15	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
16	16	Constitution) is being amended, the text of the existing provision will appear in this style type,
17	17	additions will appear in this style type, and deletions will appear in this style type.
18	18	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
19	19	provision adopted), the text of the new provision will appear in this style type. Also, the
20	20	word NEW will appear in that style type in the introductory clause of each SECTION that adds
21	21	a new provision to the Indiana Code or the Indiana Constitution.
22	22	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
23	23	between statutes enacted by the 2021 Regular Session of the General Assembly.
24	24	HOUSE BILL No. 1382
25	25	A BILL FOR AN ACT to amend the Indiana Code concerning
26	26	taxation.
27	27	Be it enacted by the General Assembly of the State of Indiana:
28	28	1 SECTION 1. IC 6-3-3-12, AS AMENDED BY P.L.154-2020,
29	29	2 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
30	30	3 JULY 1, 2022]: Sec. 12. (a) As used in this section, "account" has the
31	31	4 meaning set forth in IC 21-9-2-2.
32	32	5 (b) As used in this section, "account beneficiary" has the meaning
33	33	6 set forth in IC 21-9-2-3.
34	34	7 (c) As used in this section, "account owner" has the meaning set
35	35	8 forth in IC 21-9-2-4.
36	36	9 (d) As used in this section, "college choice 529 education savings
37	37	10 plan" refers to a college choice 529 plan established under IC 21-9.
38	38	11 (e) As used in this section, "contribution" means the amount of
39	39	12 money directly provided to a college choice 529 education savings plan
40	40	13 account by a taxpayer. A contribution does not include any of the
41	41	14 following:
42	42	15 (1) Money credited to an account as a result of bonus points or
43	43	16 other forms of consideration earned by the taxpayer that result in
44	44	17 a transfer of money to the account.
45	45	2022 IN 1382—LS 6382/DI 134 2
46	46	1 (2) Money transferred from any other qualified tuition program
47	47	2 under Section 529 of the Internal Revenue Code or from any other
48	48	3 similar plan.
49	49	4 (3) Money that is credited to an account and that will be
50	50	5 transferred to an ABLE account (as defined in Section 529A of
51	51	6 the Internal Revenue Code).
52	52	7 (f) As used in this section, "nonqualified withdrawal" means a
53	53	8 withdrawal or distribution from a college choice 529 education savings
54	54	9 plan that is not a qualified withdrawal.
55	55	10 (g) As used in this section, "qualified higher education expenses"
56	56	11 has the meaning set forth in IC 21-9-2-19.5. except that the term does
57	57	12 not include qualified education loan repayments under Section
58	58	13 529(c)(9) of the Internal Revenue Code.
59	59	14 (h) As used in this section, "qualified K-12 education expenses"
60	60	15 means expenses that are for tuition in connection with enrollment or
61	61	16 attendance at an elementary or secondary public, private, or religious
62	62	17 school located in Indiana and are permitted under Section 529 of the
63	63	18 Internal Revenue Code.
64	64	19 (i) As used in this section, "qualified withdrawal" means a
65	65	20 withdrawal or distribution from a college choice 529 education savings
66	66	21 plan that is made:
67	67	22 (1) to pay for qualified higher education expenses, excluding any
68	68	23 withdrawals or distributions used to pay for qualified higher
69	69	24 education expenses, if the withdrawals or distributions are made
70	70	25 from an account of a college choice 529 education savings plan
71	71	26 that is terminated within twelve (12) months after the account is
72	72	27 opened;
73	73	28 (2) as a result of the death or disability of an account beneficiary;
74	74	29 (3) because an account beneficiary received a scholarship that
75	75	30 paid for all or part of the qualified higher education expenses of
76	76	31 the account beneficiary, to the extent that the withdrawal or
77	77	32 distribution does not exceed the amount of the scholarship; or
78	78	33 (4) by a college choice 529 education savings plan as the result of
79	79	34 a transfer of funds by a college choice 529 education savings plan
80	80	35 from one (1) third party custodian to another.
81	81	36 However, a qualified withdrawal does not include a withdrawal or
82	82	37 distribution that will be used for expenses that are for tuition in
83	83	38 connection with enrollment or attendance at an elementary or
84	84	39 secondary public, private, or religious school unless the school is
85	85	40 located in Indiana. A qualified withdrawal does not include a rollover
86	86	41 distribution or transfer of assets from a college choice 529 education
87	87	42 savings plan to any other qualified tuition program under Section 529
88	88	2022 IN 1382—LS 6382/DI 134 3
89	89	1 of the Internal Revenue Code or to any other similar plan.
90	90	2 (j) As used in this section, "taxpayer" means:
91	91	3 (1) an individual filing a single return;
92	92	4 (2) a married couple filing a joint return; or
93	93	5 (3) for taxable years beginning after December 31, 2019, a
94	94	6 married individual filing a separate return.
95	95	7 (k) A taxpayer is entitled to a credit against the taxpayer's adjusted
96	96	8 gross income tax imposed by IC 6-3-1 through IC 6-3-7 for a taxable
97	97	9 year equal to the least of the following:
98	98	10 (1) The following amount:
99	99	11 (A) For taxable years beginning before January 1, 2019, the
100	100	12 sum of twenty percent (20%) multiplied by the amount of the
101	101	13 total contributions that are made by the taxpayer to an account
102	102	14 or accounts of a college choice 529 education savings plan
103	103	15 during the taxable year and that will be used to pay for
104	104	16 qualified higher education expenses that are not qualified K-12
105	105	17 education expenses, plus the lesser of:
106	106	18 (i) five hundred dollars ($500); or
107	107	19 (ii) ten percent (10%) multiplied by the amount of the total
108	108	20 contributions that are made by the taxpayer to an account or
109	109	21 accounts of a college choice 529 education savings plan
110	110	22 during the taxable year and that will be used to pay for
111	111	23 qualified K-12 education expenses.
112	112	24 (B) For taxable years beginning after December 31, 2018, the
113	113	25 sum of:
114	114	26 (i) twenty percent (20%) multiplied by the amount of the
115	115	27 total contributions that are made by the taxpayer to an
116	116	28 account or accounts of a college choice 529 education
117	117	29 savings plan during the taxable year and that are designated
118	118	30 to pay for qualified higher education expenses that are not
119	119	31 qualified K-12 education expenses; plus
120	120	32 (ii) twenty percent (20%) multiplied by the amount of the
121	121	33 total contributions that are made by the taxpayer to an
122	122	34 account or accounts of a college choice 529 education
123	123	35 savings plan during the taxable year and that are designated
124	124	36 to pay for qualified K-12 education expenses.
125	125	37 (2) One thousand dollars ($1,000), or five hundred dollars ($500)
126	126	38 in the case of a married individual filing a separate return.
127	127	39 (3) The amount of the taxpayer's adjusted gross income tax
128	128	40 imposed by IC 6-3-1 through IC 6-3-7 for the taxable year,
129	129	41 reduced by the sum of all credits (as determined without regard to
130	130	42 this section) allowed by IC 6-3-1 through IC 6-3-7.
131	131	2022 IN 1382—LS 6382/DI 134 4
132	132	1 (l) This subsection applies after December 31, 2018. At the time a
133	133	2 contribution is made to or a withdrawal is made from an account or
134	134	3 accounts of a college choice 529 education savings plan, the person
135	135	4 making the contribution or withdrawal shall designate whether the
136	136	5 contribution is made for or the withdrawal will be used for:
137	137	6 (1) qualified higher education expenses that are not qualified
138	138	7 K-12 education expenses; or
139	139	8 (2) qualified K-12 education expenses.
140	140	9 The Indiana education savings authority (IC 21-9-3) shall use
141	141	10 subaccounting to track the designations.
142	142	11 (m) A taxpayer who makes a contribution to a college choice 529
143	143	12 education savings plan is considered to have made the contribution on
144	144	13 the date that:
145	145	14 (1) the taxpayer's contribution is postmarked or accepted by a
146	146	15 delivery service, for contributions that are submitted to a college
147	147	16 choice 529 education savings plan by mail or delivery service; or
148	148	17 (2) the taxpayer's electronic funds transfer is initiated, for
149	149	18 contributions that are submitted to a college choice 529 education
150	150	19 savings plan by electronic funds transfer.
151	151	20 (n) A taxpayer is not entitled to a carryback, carryover, or refund of
152	152	21 an unused credit.
153	153	22 (o) A taxpayer may not sell, assign, convey, or otherwise transfer the
154	154	23 tax credit provided by this section.
155	155	24 (p) To receive the credit provided by this section, a taxpayer must
156	156	25 claim the credit on the taxpayer's annual state tax return or returns in
157	157	26 the manner prescribed by the department. The taxpayer shall submit to
158	158	27 the department all information that the department determines is
159	159	28 necessary for the calculation of the credit provided by this section.
160	160	29 (q) An account owner of an account of a college choice 529
161	161	30 education savings plan must repay all or a part of the credit in a taxable
162	162	31 year in which any nonqualified withdrawal is made from the account.
163	163	32 The amount the taxpayer must repay is equal to the lesser of:
164	164	33 (1) twenty percent (20%) of the total amount of nonqualified
165	165	34 withdrawals made during the taxable year from the account; or
166	166	35 (2) the excess of:
167	167	36 (A) the cumulative amount of all credits provided by this
168	168	37 section that are claimed by any taxpayer with respect to the
169	169	38 taxpayer's contributions to the account for all prior taxable
170	170	39 years beginning on or after January 1, 2007; over
171	171	40 (B) the cumulative amount of repayments paid by the account
172	172	41 owner under this subsection for all prior taxable years
173	173	42 beginning on or after January 1, 2008.
174	174	2022 IN 1382—LS 6382/DI 134 5
175	175	1 (r) Any required repayment under subsection (q) shall be reported
176	176	2 by the account owner on the account owner's annual state income tax
177	177	3 return for any taxable year in which a nonqualified withdrawal is made.
178	178	4 (s) A nonresident account owner who is not required to file an
179	179	5 annual income tax return for a taxable year in which a nonqualified
180	180	6 withdrawal is made shall make any required repayment on the form
181	181	7 required under IC 6-3-4-1(2). If the nonresident account owner does
182	182	8 not make the required repayment, the department shall issue a demand
183	183	9 notice in accordance with IC 6-8.1-5-1.
184	184	10 (t) The executive director of the Indiana education savings authority
185	185	11 shall submit or cause to be submitted to the department a copy of all
186	186	12 information returns or statements issued to account owners, account
187	187	13 beneficiaries, and other taxpayers for each taxable year with respect to:
188	188	14 (1) nonqualified withdrawals made from accounts, including
189	189	15 subaccounts of a college choice 529 education savings plan for
190	190	16 the taxable year; or
191	191	17 (2) account closings for the taxable year.
192	192	2022 IN 1382—LS 6382/DI 134