Indiana 2023 Regular Session

Indiana House Bill HB1277 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. 1277
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 6-3.
7	7	Synopsis: Taxation of retired and active members of USPHS.
8	8	Establishes the definition of "qualified uniformed service income" for
9	9	the purpose of determining a taxpayer's adjusted gross income. Adds
10	10	a taxpayer who is a member of the United States public health service
11	11	(USPHS) commissioned corps to the taxpayers who are eligible to
12	12	receive an income tax deduction for military pay, retirement, or
13	13	survivor benefits.
14	14	Effective: July 1, 2023.
15	15	Pack
16	16	January 11, 2023, read first time and referred to Committee on Ways and Means.
17	17	2023 IN 1277—LS 6765/DI 116 Introduced
18	18	First Regular Session of the 123rd General Assembly (2023)
19	19	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
20	20	Constitution) is being amended, the text of the existing provision will appear in this style type,
21	21	additions will appear in this style type, and deletions will appear in this style type.
22	22	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
23	23	provision adopted), the text of the new provision will appear in this style type. Also, the
24	24	word NEW will appear in that style type in the introductory clause of each SECTION that adds
25	25	a new provision to the Indiana Code or the Indiana Constitution.
26	26	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
27	27	between statutes enacted by the 2022 Regular Session of the General Assembly.
28	28	HOUSE BILL No. 1277
29	29	A BILL FOR AN ACT to amend the Indiana Code concerning
30	30	taxation.
31	31	Be it enacted by the General Assembly of the State of Indiana:
32	32	1 SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss),
33	33	2 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
34	34	3 JULY 1, 2023]: Sec. 3.5. When used in this article, the term "adjusted
35	35	4 gross income" shall mean the following:
36	36	5 (a) In the case of all individuals, "adjusted gross income" (as
37	37	6 defined in Section 62 of the Internal Revenue Code), modified as
38	38	7 follows:
39	39	8 (1) Subtract income that is exempt from taxation under this article
40	40	9 by the Constitution and statutes of the United States.
41	41	10 (2) Except as provided in subsection (c), add an amount equal to
42	42	11 any deduction or deductions allowed or allowable pursuant to
43	43	12 Section 62 of the Internal Revenue Code for taxes based on or
44	44	13 measured by income and levied at the state level by any state of
45	45	14 the United States.
46	46	15 (3) Subtract one thousand dollars ($1,000), or in the case of a
47	47	16 joint return filed by a husband and wife, subtract for each spouse
48	48	17 one thousand dollars ($1,000).
49	49	2023 IN 1277—LS 6765/DI 116 2
50	50	1 (4) Subtract one thousand dollars ($1,000) for:
51	51	2 (A) each of the exemptions provided by Section 151(c) of the
52	52	3 Internal Revenue Code (as effective January 1, 2017);
53	53	4 (B) each additional amount allowable under Section 63(f) of
54	54	5 the Internal Revenue Code; and
55	55	6 (C) the spouse of the taxpayer if a separate return is made by
56	56	7 the taxpayer and if the spouse, for the calendar year in which
57	57	8 the taxable year of the taxpayer begins, has no gross income
58	58	9 and is not the dependent of another taxpayer.
59	59	10 (5) Subtract:
60	60	11 (A) One thousand five hundred dollars ($1,500) for each of the
61	61	12 exemptions allowed under Section 151(c)(1)(B) of the Internal
62	62	13 Revenue Code (as effective January 1, 2004).
63	63	14 (B) One thousand five hundred dollars ($1,500) for each
64	64	15 exemption allowed under Section 151(c) of the Internal
65	65	16 Revenue Code (as effective January 1, 2017) for an individual:
66	66	17 (i) who is less than nineteen (19) years of age or is a
67	67	18 full-time student who is less than twenty-four (24) years of
68	68	19 age;
69	69	20 (ii) for whom the taxpayer is the legal guardian; and
70	70	21 (iii) for whom the taxpayer does not claim an exemption
71	71	22 under clause (A).
72	72	23 (C) Five hundred dollars ($500) for each additional amount
73	73	24 allowable under Section 63(f)(1) of the Internal Revenue Code
74	74	25 if the federal adjusted gross income of the taxpayer, or the
75	75	26 taxpayer and the taxpayer's spouse in the case of a joint return,
76	76	27 is less than forty thousand dollars ($40,000). In the case of a
77	77	28 married individual filing a separate return, the qualifying
78	78	29 income amount in this clause is equal to twenty thousand
79	79	30 dollars ($20,000).
80	80	31 (D) Three thousand dollars ($3,000) for each exemption
81	81	32 allowed under Section 151(c) of the Internal Revenue Code (as
82	82	33 effective January 1, 2017) for an individual who is:
83	83	34 (i) an adopted child of the taxpayer; and
84	84	35 (ii) less than nineteen (19) years of age or is a full-time
85	85	36 student who is less than twenty-four (24) years of age.
86	86	37 This amount is in addition to any amount subtracted under
87	87	38 clause (A) or (B).
88	88	39 This amount is in addition to the amount subtracted under
89	89	40 subdivision (4).
90	90	41 (6) Subtract any amounts included in federal adjusted gross
91	91	42 income under Section 111 of the Internal Revenue Code as a
92	92	2023 IN 1277—LS 6765/DI 116 3
93	93	1 recovery of items previously deducted as an itemized deduction
94	94	2 from adjusted gross income.
95	95	3 (7) Subtract any amounts included in federal adjusted gross
96	96	4 income under the Internal Revenue Code which amounts were
97	97	5 received by the individual as supplemental railroad retirement
98	98	6 annuities under 45 U.S.C. 231 and which are not deductible under
99	99	7 subdivision (1).
100	100	8 (8) Subtract an amount equal to the amount of federal Social
101	101	9 Security and Railroad Retirement benefits included in a taxpayer's
102	102	10 federal gross income by Section 86 of the Internal Revenue Code.
103	103	11 (9) In the case of a nonresident taxpayer or a resident taxpayer
104	104	12 residing in Indiana for a period of less than the taxpayer's entire
105	105	13 taxable year, the total amount of the deductions allowed pursuant
106	106	14 to subdivisions (3), (4), and (5) shall be reduced to an amount
107	107	15 which bears the same ratio to the total as the taxpayer's income
108	108	16 taxable in Indiana bears to the taxpayer's total income.
109	109	17 (10) In the case of an individual who is a recipient of assistance
110	110	18 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
111	111	19 subtract an amount equal to that portion of the individual's
112	112	20 adjusted gross income with respect to which the individual is not
113	113	21 allowed under federal law to retain an amount to pay state and
114	114	22 local income taxes.
115	115	23 (11) In the case of an eligible individual, subtract the amount of
116	116	24 a Holocaust victim's settlement payment included in the
117	117	25 individual's federal adjusted gross income.
118	118	26 (12) Subtract an amount equal to the portion of any premiums
119	119	27 paid during the taxable year by the taxpayer for a qualified long
120	120	28 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
121	121	29 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
122	122	30 file a joint income tax return or the taxpayer is otherwise entitled
123	123	31 to a deduction under this subdivision for the taxpayer's spouse, or
124	124	32 both.
125	125	33 (13) Subtract an amount equal to the lesser of:
126	126	34 (A) two thousand five hundred dollars ($2,500), or one
127	127	35 thousand two hundred fifty dollars ($1,250) in the case of a
128	128	36 married individual filing a separate return; or
129	129	37 (B) the amount of property taxes that are paid during the
130	130	38 taxable year in Indiana by the individual on the individual's
131	131	39 principal place of residence.
132	132	40 (14) Subtract an amount equal to the amount of a September 11
133	133	41 terrorist attack settlement payment included in the individual's
134	134	42 federal adjusted gross income.
135	135	2023 IN 1277—LS 6765/DI 116 4
136	136	1 (15) Add or subtract the amount necessary to make the adjusted
137	137	2 gross income of any taxpayer that owns property for which bonus
138	138	3 depreciation was allowed in the current taxable year or in an
139	139	4 earlier taxable year equal to the amount of adjusted gross income
140	140	5 that would have been computed had an election not been made
141	141	6 under Section 168(k) of the Internal Revenue Code to apply bonus
142	142	7 depreciation to the property in the year that it was placed in
143	143	8 service.
144	144	9 (16) Add an amount equal to any deduction allowed under
145	145	10 Section 172 of the Internal Revenue Code (concerning net
146	146	11 operating losses).
147	147	12 (17) Add or subtract the amount necessary to make the adjusted
148	148	13 gross income of any taxpayer that placed Section 179 property (as
149	149	14 defined in Section 179 of the Internal Revenue Code) in service
150	150	15 in the current taxable year or in an earlier taxable year equal to
151	151	16 the amount of adjusted gross income that would have been
152	152	17 computed had an election for federal income tax purposes not
153	153	18 been made for the year in which the property was placed in
154	154	19 service to take deductions under Section 179 of the Internal
155	155	20 Revenue Code in a total amount exceeding the sum of:
156	156	21 (A) twenty-five thousand dollars ($25,000) to the extent
157	157	22 deductions under Section 179 of the Internal Revenue Code
158	158	23 were not elected as provided in clause (B); and
159	159	24 (B) for taxable years beginning after December 31, 2017, the
160	160	25 deductions elected under Section 179 of the Internal Revenue
161	161	26 Code on property acquired in an exchange if:
162	162	27 (i) the exchange would have been eligible for
163	163	28 nonrecognition of gain or loss under Section 1031 of the
164	164	29 Internal Revenue Code in effect on January 1, 2017;
165	165	30 (ii) the exchange is not eligible for nonrecognition of gain or
166	166	31 loss under Section 1031 of the Internal Revenue Code; and
167	167	32 (iii) the taxpayer made an election to take deductions under
168	168	33 Section 179 of the Internal Revenue Code with regard to the
169	169	34 acquired property in the year that the property was placed
170	170	35 into service.
171	171	36 The amount of deductions allowable for an item of property
172	172	37 under this clause may not exceed the amount of adjusted gross
173	173	38 income realized on the property that would have been deferred
174	174	39 under the Internal Revenue Code in effect on January 1, 2017.
175	175	40 (18) Subtract an amount equal to the amount of the taxpayer's
176	176	41 qualified military income or qualified uniformed service
177	177	42 income that was not excluded from the taxpayer's gross income
178	178	2023 IN 1277—LS 6765/DI 116 5
179	179	1 for federal income tax purposes under Section 112 of the Internal
180	180	2 Revenue Code.
181	181	3 (19) Subtract income that is:
182	182	4 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
183	183	5 derived from patents); and
184	184	6 (B) included in the individual's federal adjusted gross income
185	185	7 under the Internal Revenue Code.
186	186	8 (20) Add an amount equal to any income not included in gross
187	187	9 income as a result of the deferral of income arising from business
188	188	10 indebtedness discharged in connection with the reacquisition after
189	189	11 December 31, 2008, and before January 1, 2011, of an applicable
190	190	12 debt instrument, as provided in Section 108(i) of the Internal
191	191	13 Revenue Code. Subtract the amount necessary from the adjusted
192	192	14 gross income of any taxpayer that added an amount to adjusted
193	193	15 gross income in a previous year to offset the amount included in
194	194	16 federal gross income as a result of the deferral of income arising
195	195	17 from business indebtedness discharged in connection with the
196	196	18 reacquisition after December 31, 2008, and before January 1,
197	197	19 2011, of an applicable debt instrument, as provided in Section
198	198	20 108(i) of the Internal Revenue Code.
199	199	21 (21) Add the amount excluded from federal gross income under
200	200	22 Section 103 of the Internal Revenue Code for interest received on
201	201	23 an obligation of a state other than Indiana, or a political
202	202	24 subdivision of such a state, that is acquired by the taxpayer after
203	203	25 December 31, 2011.
204	204	26 (22) Subtract an amount as described in Section 1341(a)(2) of the
205	205	27 Internal Revenue Code to the extent, if any, that the amount was
206	206	28 previously included in the taxpayer's adjusted gross income for a
207	207	29 prior taxable year.
208	208	30 (23) For taxable years beginning after December 25, 2016, add an
209	209	31 amount equal to the deduction for deferred foreign income that
210	210	32 was claimed by the taxpayer for the taxable year under Section
211	211	33 965(c) of the Internal Revenue Code.
212	212	34 (24) Subtract any interest expense paid or accrued in the current
213	213	35 taxable year but not deducted as a result of the limitation imposed
214	214	36 under Section 163(j)(1) of the Internal Revenue Code. Add any
215	215	37 interest expense paid or accrued in a previous taxable year but
216	216	38 allowed as a deduction under Section 163 of the Internal Revenue
217	217	39 Code in the current taxable year. For purposes of this subdivision,
218	218	40 an interest expense is considered paid or accrued only in the first
219	219	41 taxable year the deduction would have been allowable under
220	220	42 Section 163 of the Internal Revenue Code if the limitation under
221	221	2023 IN 1277—LS 6765/DI 116 6
222	222	1 Section 163(j)(1) of the Internal Revenue Code did not exist.
223	223	2 (25) Subtract the amount that would have been excluded from
224	224	3 gross income but for the enactment of Section 118(b)(2) of the
225	225	4 Internal Revenue Code for taxable years ending after December
226	226	5 22, 2017.
227	227	6 (26) For taxable years beginning after December 31, 2019, and
228	228	7 before January 1, 2021, add an amount of the deduction claimed
229	229	8 under Section 62(a)(22) of the Internal Revenue Code.
230	230	9 (27) For taxable years beginning after December 31, 2019, for
231	231	10 payments made by an employer under an education assistance
232	232	11 program after March 27, 2020:
233	233	12 (A) add the amount of payments by an employer that are
234	234	13 excluded from the taxpayer's federal gross income under
235	235	14 Section 127(c)(1)(B) of the Internal Revenue Code; and
236	236	15 (B) deduct the interest allowable under Section 221 of the
237	237	16 Internal Revenue Code, if the disallowance under Section
238	238	17 221(e)(1) of the Internal Revenue Code did not apply to the
239	239	18 payments described in clause (A). For purposes of applying
240	240	19 Section 221(b) of the Internal Revenue Code to the amount
241	241	20 allowable under this clause, the amount under clause (A) shall
242	242	21 not be added to adjusted gross income.
243	243	22 (28) Add an amount equal to the remainder of:
244	244	23 (A) the amount allowable as a deduction under Section 274(n)
245	245	24 of the Internal Revenue Code; minus
246	246	25 (B) the amount otherwise allowable as a deduction under
247	247	26 Section 274(n) of the Internal Revenue Code, if Section
248	248	27 274(n)(2)(D) of the Internal Revenue Code was not in effect
249	249	28 for amounts paid or incurred after December 31, 2020.
250	250	29 (29) For taxable years beginning after December 31, 2017, and
251	251	30 before January 1, 2021, add an amount equal to the excess
252	252	31 business loss of the taxpayer as defined in Section 461(l)(3) of the
253	253	32 Internal Revenue Code. In addition:
254	254	33 (A) If a taxpayer has an excess business loss under this
255	255	34 subdivision and also has modifications under subdivisions (15)
256	256	35 and (17) for property placed in service during the taxable year,
257	257	36 the taxpayer shall treat a portion of the taxable year
258	258	37 modifications for that property as occurring in the taxable year
259	259	38 the property is placed in service and a portion of the
260	260	39 modifications as occurring in the immediately following
261	261	40 taxable year.
262	262	41 (B) The portion of the modifications under subdivisions (15)
263	263	42 and (17) for property placed in service during the taxable year
264	264	2023 IN 1277—LS 6765/DI 116 7
265	265	1 treated as occurring in the taxable year in which the property
266	266	2 is placed in service equals:
267	267	3 (i) the modification for the property otherwise determined
268	268	4 under this section; minus
269	269	5 (ii) the excess business loss disallowed under this
270	270	6 subdivision;
271	271	7 but not less than zero (0).
272	272	8 (C) The portion of the modifications under subdivisions (15)
273	273	9 and (17) for property placed in service during the taxable year
274	274	10 treated as occurring in the taxable year immediately following
275	275	11 the taxable year in which the property is placed in service
276	276	12 equals the modification for the property otherwise determined
277	277	13 under this section minus the amount in clause (B).
278	278	14 (D) Any reallocation of modifications between taxable years
279	279	15 under clauses (B) and (C) shall be first allocated to the
280	280	16 modification under subdivision (15), then to the modification
281	281	17 under subdivision (17).
282	282	18 (30) Add an amount equal to the amount excluded from federal
283	283	19 gross income under Section 108(f)(5) of the Internal Revenue
284	284	20 Code. For purposes of this subdivision:
285	285	21 (A) if an amount excluded under Section 108(f)(5) of the
286	286	22 Internal Revenue Code would be excludible under Section
287	287	23 108(a)(1)(B) of the Internal Revenue Code, the exclusion
288	288	24 under Section 108(a)(1)(B) of the Internal Revenue Code shall
289	289	25 take precedence; and
290	290	26 (B) if an amount would have been excludible under Section
291	291	27 108(f)(5) of the Internal Revenue Code as in effect on January
292	292	28 1, 2020, the amount is not required to be added back under this
293	293	29 subdivision.
294	294	30 (31) For taxable years ending after March 12, 2020, subtract an
295	295	31 amount equal to the deduction disallowed pursuant to:
296	296	32 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
297	297	33 as modified by Sections 206 and 207 of the Taxpayer Certainty
298	298	34 and Disaster Relief Tax Act (Division EE of Public Law
299	299	35 116-260); and
300	300	36 (B) Section 3134(e) of the Internal Revenue Code.
301	301	37 (32) Subtract the amount of an annual grant amount distributed to
302	302	38 a taxpayer's Indiana education scholarship account under
303	303	39 IC 20-51.4-4-2 that is used for a qualified expense (as defined in
304	304	40 IC 20-51.4-2-9) or to an Indiana enrichment scholarship account
305	305	41 under IC 20-52 that is used for qualified expenses (as defined in
306	306	42 IC 20-52-2-6), to the extent the distribution used for the qualified
307	307	2023 IN 1277—LS 6765/DI 116 8
308	308	1 expense is included in the taxpayer's federal adjusted gross
309	309	2 income under the Internal Revenue Code.
310	310	3 (33) For taxable years beginning after December 31, 2019, and
311	311	4 before January 1, 2021, add an amount equal to the amount of
312	312	5 unemployment compensation excluded from federal gross income
313	313	6 under Section 85(c) of the Internal Revenue Code.
314	314	7 (34) For taxable years beginning after December 31, 2022,
315	315	8 subtract an amount equal to the deduction disallowed under
316	316	9 Section 280C(h) of the Internal Revenue Code.
317	317	10 (35) Subtract any other amounts the taxpayer is entitled to deduct
318	318	11 under IC 6-3-2.
319	319	12 (b) In the case of corporations, the same as "taxable income" (as
320	320	13 defined in Section 63 of the Internal Revenue Code) adjusted as
321	321	14 follows:
322	322	15 (1) Subtract income that is exempt from taxation under this article
323	323	16 by the Constitution and statutes of the United States.
324	324	17 (2) Add an amount equal to any deduction or deductions allowed
325	325	18 or allowable pursuant to Section 170 of the Internal Revenue
326	326	19 Code (concerning charitable contributions).
327	327	20 (3) Except as provided in subsection (c), add an amount equal to
328	328	21 any deduction or deductions allowed or allowable pursuant to
329	329	22 Section 63 of the Internal Revenue Code for taxes based on or
330	330	23 measured by income and levied at the state level by any state of
331	331	24 the United States.
332	332	25 (4) Subtract an amount equal to the amount included in the
333	333	26 corporation's taxable income under Section 78 of the Internal
334	334	27 Revenue Code (concerning foreign tax credits).
335	335	28 (5) Add or subtract the amount necessary to make the adjusted
336	336	29 gross income of any taxpayer that owns property for which bonus
337	337	30 depreciation was allowed in the current taxable year or in an
338	338	31 earlier taxable year equal to the amount of adjusted gross income
339	339	32 that would have been computed had an election not been made
340	340	33 under Section 168(k) of the Internal Revenue Code to apply bonus
341	341	34 depreciation to the property in the year that it was placed in
342	342	35 service.
343	343	36 (6) Add an amount equal to any deduction allowed under Section
344	344	37 172 of the Internal Revenue Code (concerning net operating
345	345	38 losses).
346	346	39 (7) Add or subtract the amount necessary to make the adjusted
347	347	40 gross income of any taxpayer that placed Section 179 property (as
348	348	41 defined in Section 179 of the Internal Revenue Code) in service
349	349	42 in the current taxable year or in an earlier taxable year equal to
350	350	2023 IN 1277—LS 6765/DI 116 9
351	351	1 the amount of adjusted gross income that would have been
352	352	2 computed had an election for federal income tax purposes not
353	353	3 been made for the year in which the property was placed in
354	354	4 service to take deductions under Section 179 of the Internal
355	355	5 Revenue Code in a total amount exceeding the sum of:
356	356	6 (A) twenty-five thousand dollars ($25,000) to the extent
357	357	7 deductions under Section 179 of the Internal Revenue Code
358	358	8 were not elected as provided in clause (B); and
359	359	9 (B) for taxable years beginning after December 31, 2017, the
360	360	10 deductions elected under Section 179 of the Internal Revenue
361	361	11 Code on property acquired in an exchange if:
362	362	12 (i) the exchange would have been eligible for
363	363	13 nonrecognition of gain or loss under Section 1031 of the
364	364	14 Internal Revenue Code in effect on January 1, 2017;
365	365	15 (ii) the exchange is not eligible for nonrecognition of gain or
366	366	16 loss under Section 1031 of the Internal Revenue Code; and
367	367	17 (iii) the taxpayer made an election to take deductions under
368	368	18 Section 179 of the Internal Revenue Code with regard to the
369	369	19 acquired property in the year that the property was placed
370	370	20 into service.
371	371	21 The amount of deductions allowable for an item of property
372	372	22 under this clause may not exceed the amount of adjusted gross
373	373	23 income realized on the property that would have been deferred
374	374	24 under the Internal Revenue Code in effect on January 1, 2017.
375	375	25 (8) Add to the extent required by IC 6-3-2-20:
376	376	26 (A) the amount of intangible expenses (as defined in
377	377	27 IC 6-3-2-20) for the taxable year that reduced the corporation's
378	378	28 taxable income (as defined in Section 63 of the Internal
379	379	29 Revenue Code) for federal income tax purposes; and
380	380	30 (B) any directly related interest expenses (as defined in
381	381	31 IC 6-3-2-20) that reduced the corporation's adjusted gross
382	382	32 income (determined without regard to this subdivision). For
383	383	33 purposes of this clause, any directly related interest expense
384	384	34 that constitutes business interest within the meaning of Section
385	385	35 163(j) of the Internal Revenue Code shall be considered to
386	386	36 have reduced the taxpayer's federal taxable income only in the
387	387	37 first taxable year in which the deduction otherwise would have
388	388	38 been allowable under Section 163 of the Internal Revenue
389	389	39 Code if the limitation under Section 163(j)(1) of the Internal
390	390	40 Revenue Code did not exist.
391	391	41 (9) Add an amount equal to any deduction for dividends paid (as
392	392	42 defined in Section 561 of the Internal Revenue Code) to
393	393	2023 IN 1277—LS 6765/DI 116 10
394	394	1 shareholders of a captive real estate investment trust (as defined
395	395	2 in section 34.5 of this chapter).
396	396	3 (10) Subtract income that is:
397	397	4 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
398	398	5 derived from patents); and
399	399	6 (B) included in the corporation's taxable income under the
400	400	7 Internal Revenue Code.
401	401	8 (11) Add an amount equal to any income not included in gross
402	402	9 income as a result of the deferral of income arising from business
403	403	10 indebtedness discharged in connection with the reacquisition after
404	404	11 December 31, 2008, and before January 1, 2011, of an applicable
405	405	12 debt instrument, as provided in Section 108(i) of the Internal
406	406	13 Revenue Code. Subtract from the adjusted gross income of any
407	407	14 taxpayer that added an amount to adjusted gross income in a
408	408	15 previous year the amount necessary to offset the amount included
409	409	16 in federal gross income as a result of the deferral of income
410	410	17 arising from business indebtedness discharged in connection with
411	411	18 the reacquisition after December 31, 2008, and before January 1,
412	412	19 2011, of an applicable debt instrument, as provided in Section
413	413	20 108(i) of the Internal Revenue Code.
414	414	21 (12) Add the amount excluded from federal gross income under
415	415	22 Section 103 of the Internal Revenue Code for interest received on
416	416	23 an obligation of a state other than Indiana, or a political
417	417	24 subdivision of such a state, that is acquired by the taxpayer after
418	418	25 December 31, 2011.
419	419	26 (13) For taxable years beginning after December 25, 2016:
420	420	27 (A) for a corporation other than a real estate investment trust,
421	421	28 add:
422	422	29 (i) an amount equal to the amount reported by the taxpayer
423	423	30 on IRC 965 Transition Tax Statement, line 1; or
424	424	31 (ii) if the taxpayer deducted an amount under Section 965(c)
425	425	32 of the Internal Revenue Code in determining the taxpayer's
426	426	33 taxable income for purposes of the federal income tax, the
427	427	34 amount deducted under Section 965(c) of the Internal
428	428	35 Revenue Code; and
429	429	36 (B) for a real estate investment trust, add an amount equal to
430	430	37 the deduction for deferred foreign income that was claimed by
431	431	38 the taxpayer for the taxable year under Section 965(c) of the
432	432	39 Internal Revenue Code, but only to the extent that the taxpayer
433	433	40 included income pursuant to Section 965 of the Internal
434	434	41 Revenue Code in its taxable income for federal income tax
435	435	42 purposes or is required to add back dividends paid under
436	436	2023 IN 1277—LS 6765/DI 116 11
437	437	1 subdivision (9).
438	438	2 (14) Add an amount equal to the deduction that was claimed by
439	439	3 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
440	440	4 Internal Revenue Code (attributable to global intangible
441	441	5 low-taxed income). The taxpayer shall separately specify the
442	442	6 amount of the reduction under Section 250(a)(1)(B)(i) of the
443	443	7 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
444	444	8 Internal Revenue Code.
445	445	9 (15) Subtract any interest expense paid or accrued in the current
446	446	10 taxable year but not deducted as a result of the limitation imposed
447	447	11 under Section 163(j)(1) of the Internal Revenue Code. Add any
448	448	12 interest expense paid or accrued in a previous taxable year but
449	449	13 allowed as a deduction under Section 163 of the Internal Revenue
450	450	14 Code in the current taxable year. For purposes of this subdivision,
451	451	15 an interest expense is considered paid or accrued only in the first
452	452	16 taxable year the deduction would have been allowable under
453	453	17 Section 163 of the Internal Revenue Code if the limitation under
454	454	18 Section 163(j)(1) of the Internal Revenue Code did not exist.
455	455	19 (16) Subtract the amount that would have been excluded from
456	456	20 gross income but for the enactment of Section 118(b)(2) of the
457	457	21 Internal Revenue Code for taxable years ending after December
458	458	22 22, 2017.
459	459	23 (17) Add an amount equal to the remainder of:
460	460	24 (A) the amount allowable as a deduction under Section 274(n)
461	461	25 of the Internal Revenue Code; minus
462	462	26 (B) the amount otherwise allowable as a deduction under
463	463	27 Section 274(n) of the Internal Revenue Code, if Section
464	464	28 274(n)(2)(D) of the Internal Revenue Code was not in effect
465	465	29 for amounts paid or incurred after December 31, 2020.
466	466	30 (18) For taxable years ending after March 12, 2020, subtract an
467	467	31 amount equal to the deduction disallowed pursuant to:
468	468	32 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
469	469	33 as modified by Sections 206 and 207 of the Taxpayer Certainty
470	470	34 and Disaster Relief Tax Act (Division EE of Public Law
471	471	35 116-260); and
472	472	36 (B) Section 3134(e) of the Internal Revenue Code.
473	473	37 (19) For taxable years beginning after December 31, 2022,
474	474	38 subtract an amount equal to the deduction disallowed under
475	475	39 Section 280C(h) of the Internal Revenue Code.
476	476	40 (20) Add or subtract any other amounts the taxpayer is:
477	477	41 (A) required to add or subtract; or
478	478	42 (B) entitled to deduct;
479	479	2023 IN 1277—LS 6765/DI 116 12
480	480	1 under IC 6-3-2.
481	481	2 (c) The following apply to taxable years beginning after December
482	482	3 31, 2018, for purposes of the add back of any deduction allowed on the
483	483	4 taxpayer's federal income tax return for wagering taxes, as provided in
484	484	5 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
485	485	6 the taxpayer is a corporation:
486	486	7 (1) For taxable years beginning after December 31, 2018, and
487	487	8 before January 1, 2020, a taxpayer is required to add back under
488	488	9 this section eighty-seven and five-tenths percent (87.5%) of any
489	489	10 deduction allowed on the taxpayer's federal income tax return for
490	490	11 wagering taxes.
491	491	12 (2) For taxable years beginning after December 31, 2019, and
492	492	13 before January 1, 2021, a taxpayer is required to add back under
493	493	14 this section seventy-five percent (75%) of any deduction allowed
494	494	15 on the taxpayer's federal income tax return for wagering taxes.
495	495	16 (3) For taxable years beginning after December 31, 2020, and
496	496	17 before January 1, 2022, a taxpayer is required to add back under
497	497	18 this section sixty-two and five-tenths percent (62.5%) of any
498	498	19 deduction allowed on the taxpayer's federal income tax return for
499	499	20 wagering taxes.
500	500	21 (4) For taxable years beginning after December 31, 2021, and
501	501	22 before January 1, 2023, a taxpayer is required to add back under
502	502	23 this section fifty percent (50%) of any deduction allowed on the
503	503	24 taxpayer's federal income tax return for wagering taxes.
504	504	25 (5) For taxable years beginning after December 31, 2022, and
505	505	26 before January 1, 2024, a taxpayer is required to add back under
506	506	27 this section thirty-seven and five-tenths percent (37.5%) of any
507	507	28 deduction allowed on the taxpayer's federal income tax return for
508	508	29 wagering taxes.
509	509	30 (6) For taxable years beginning after December 31, 2023, and
510	510	31 before January 1, 2025, a taxpayer is required to add back under
511	511	32 this section twenty-five percent (25%) of any deduction allowed
512	512	33 on the taxpayer's federal income tax return for wagering taxes.
513	513	34 (7) For taxable years beginning after December 31, 2024, and
514	514	35 before January 1, 2026, a taxpayer is required to add back under
515	515	36 this section twelve and five-tenths percent (12.5%) of any
516	516	37 deduction allowed on the taxpayer's federal income tax return for
517	517	38 wagering taxes.
518	518	39 (8) For taxable years beginning after December 31, 2025, a
519	519	40 taxpayer is not required to add back under this section any amount
520	520	41 of a deduction allowed on the taxpayer's federal income tax return
521	521	42 for wagering taxes.
522	522	2023 IN 1277—LS 6765/DI 116 13
523	523	1 (d) In the case of life insurance companies (as defined in Section
524	524	2 816(a) of the Internal Revenue Code) that are organized under Indiana
525	525	3 law, the same as "life insurance company taxable income" (as defined
526	526	4 in Section 801 of the Internal Revenue Code), adjusted as follows:
527	527	5 (1) Subtract income that is exempt from taxation under this article
528	528	6 by the Constitution and statutes of the United States.
529	529	7 (2) Add an amount equal to any deduction allowed or allowable
530	530	8 under Section 170 of the Internal Revenue Code (concerning
531	531	9 charitable contributions).
532	532	10 (3) Add an amount equal to a deduction allowed or allowable
533	533	11 under Section 805 or Section 832(c) of the Internal Revenue Code
534	534	12 for taxes based on or measured by income and levied at the state
535	535	13 level by any state.
536	536	14 (4) Subtract an amount equal to the amount included in the
537	537	15 company's taxable income under Section 78 of the Internal
538	538	16 Revenue Code (concerning foreign tax credits).
539	539	17 (5) Add or subtract the amount necessary to make the adjusted
540	540	18 gross income of any taxpayer that owns property for which bonus
541	541	19 depreciation was allowed in the current taxable year or in an
542	542	20 earlier taxable year equal to the amount of adjusted gross income
543	543	21 that would have been computed had an election not been made
544	544	22 under Section 168(k) of the Internal Revenue Code to apply bonus
545	545	23 depreciation to the property in the year that it was placed in
546	546	24 service.
547	547	25 (6) Add an amount equal to any deduction allowed under Section
548	548	26 172 of the Internal Revenue Code (concerning net operating
549	549	27 losses).
550	550	28 (7) Add or subtract the amount necessary to make the adjusted
551	551	29 gross income of any taxpayer that placed Section 179 property (as
552	552	30 defined in Section 179 of the Internal Revenue Code) in service
553	553	31 in the current taxable year or in an earlier taxable year equal to
554	554	32 the amount of adjusted gross income that would have been
555	555	33 computed had an election for federal income tax purposes not
556	556	34 been made for the year in which the property was placed in
557	557	35 service to take deductions under Section 179 of the Internal
558	558	36 Revenue Code in a total amount exceeding the sum of:
559	559	37 (A) twenty-five thousand dollars ($25,000) to the extent
560	560	38 deductions under Section 179 of the Internal Revenue Code
561	561	39 were not elected as provided in clause (B); and
562	562	40 (B) for taxable years beginning after December 31, 2017, the
563	563	41 deductions elected under Section 179 of the Internal Revenue
564	564	42 Code on property acquired in an exchange if:
565	565	2023 IN 1277—LS 6765/DI 116 14
566	566	1 (i) the exchange would have been eligible for
567	567	2 nonrecognition of gain or loss under Section 1031 of the
568	568	3 Internal Revenue Code in effect on January 1, 2017;
569	569	4 (ii) the exchange is not eligible for nonrecognition of gain or
570	570	5 loss under Section 1031 of the Internal Revenue Code; and
571	571	6 (iii) the taxpayer made an election to take deductions under
572	572	7 Section 179 of the Internal Revenue Code with regard to the
573	573	8 acquired property in the year that the property was placed
574	574	9 into service.
575	575	10 The amount of deductions allowable for an item of property
576	576	11 under this clause may not exceed the amount of adjusted gross
577	577	12 income realized on the property that would have been deferred
578	578	13 under the Internal Revenue Code in effect on January 1, 2017.
579	579	14 (8) Subtract income that is:
580	580	15 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
581	581	16 derived from patents); and
582	582	17 (B) included in the insurance company's taxable income under
583	583	18 the Internal Revenue Code.
584	584	19 (9) Add an amount equal to any income not included in gross
585	585	20 income as a result of the deferral of income arising from business
586	586	21 indebtedness discharged in connection with the reacquisition after
587	587	22 December 31, 2008, and before January 1, 2011, of an applicable
588	588	23 debt instrument, as provided in Section 108(i) of the Internal
589	589	24 Revenue Code. Subtract from the adjusted gross income of any
590	590	25 taxpayer that added an amount to adjusted gross income in a
591	591	26 previous year the amount necessary to offset the amount included
592	592	27 in federal gross income as a result of the deferral of income
593	593	28 arising from business indebtedness discharged in connection with
594	594	29 the reacquisition after December 31, 2008, and before January 1,
595	595	30 2011, of an applicable debt instrument, as provided in Section
596	596	31 108(i) of the Internal Revenue Code.
597	597	32 (10) Add an amount equal to any exempt insurance income under
598	598	33 Section 953(e) of the Internal Revenue Code that is active
599	599	34 financing income under Subpart F of Subtitle A, Chapter 1,
600	600	35 Subchapter N of the Internal Revenue Code.
601	601	36 (11) Add the amount excluded from federal gross income under
602	602	37 Section 103 of the Internal Revenue Code for interest received on
603	603	38 an obligation of a state other than Indiana, or a political
604	604	39 subdivision of such a state, that is acquired by the taxpayer after
605	605	40 December 31, 2011.
606	606	41 (12) For taxable years beginning after December 25, 2016, add:
607	607	42 (A) an amount equal to the amount reported by the taxpayer on
608	608	2023 IN 1277—LS 6765/DI 116 15
609	609	1 IRC 965 Transition Tax Statement, line 1; or
610	610	2 (B) if the taxpayer deducted an amount under Section 965(c)
611	611	3 of the Internal Revenue Code in determining the taxpayer's
612	612	4 taxable income for purposes of the federal income tax, the
613	613	5 amount deducted under Section 965(c) of the Internal Revenue
614	614	6 Code.
615	615	7 (13) Add an amount equal to the deduction that was claimed by
616	616	8 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
617	617	9 Internal Revenue Code (attributable to global intangible
618	618	10 low-taxed income). The taxpayer shall separately specify the
619	619	11 amount of the reduction under Section 250(a)(1)(B)(i) of the
620	620	12 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
621	621	13 Internal Revenue Code.
622	622	14 (14) Subtract any interest expense paid or accrued in the current
623	623	15 taxable year but not deducted as a result of the limitation imposed
624	624	16 under Section 163(j)(1) of the Internal Revenue Code. Add any
625	625	17 interest expense paid or accrued in a previous taxable year but
626	626	18 allowed as a deduction under Section 163 of the Internal Revenue
627	627	19 Code in the current taxable year. For purposes of this subdivision,
628	628	20 an interest expense is considered paid or accrued only in the first
629	629	21 taxable year the deduction would have been allowable under
630	630	22 Section 163 of the Internal Revenue Code if the limitation under
631	631	23 Section 163(j)(1) of the Internal Revenue Code did not exist.
632	632	24 (15) Subtract the amount that would have been excluded from
633	633	25 gross income but for the enactment of Section 118(b)(2) of the
634	634	26 Internal Revenue Code for taxable years ending after December
635	635	27 22, 2017.
636	636	28 (16) Add an amount equal to the remainder of:
637	637	29 (A) the amount allowable as a deduction under Section 274(n)
638	638	30 of the Internal Revenue Code; minus
639	639	31 (B) the amount otherwise allowable as a deduction under
640	640	32 Section 274(n) of the Internal Revenue Code, if Section
641	641	33 274(n)(2)(D) of the Internal Revenue Code was not in effect
642	642	34 for amounts paid or incurred after December 31, 2020.
643	643	35 (17) For taxable years ending after March 12, 2020, subtract an
644	644	36 amount equal to the deduction disallowed pursuant to:
645	645	37 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
646	646	38 as modified by Sections 206 and 207 of the Taxpayer Certainty
647	647	39 and Disaster Relief Tax Act (Division EE of Public Law
648	648	40 116-260); and
649	649	41 (B) Section 3134(e) of the Internal Revenue Code.
650	650	42 (18) For taxable years beginning after December 31, 2022,
651	651	2023 IN 1277—LS 6765/DI 116 16
652	652	1 subtract an amount equal to the deduction disallowed under
653	653	2 Section 280C(h) of the Internal Revenue Code.
654	654	3 (19) Add or subtract any other amounts the taxpayer is:
655	655	4 (A) required to add or subtract; or
656	656	5 (B) entitled to deduct;
657	657	6 under IC 6-3-2.
658	658	7 (e) In the case of insurance companies subject to tax under Section
659	659	8 831 of the Internal Revenue Code and organized under Indiana law, the
660	660	9 same as "taxable income" (as defined in Section 832 of the Internal
661	661	10 Revenue Code), adjusted as follows:
662	662	11 (1) Subtract income that is exempt from taxation under this article
663	663	12 by the Constitution and statutes of the United States.
664	664	13 (2) Add an amount equal to any deduction allowed or allowable
665	665	14 under Section 170 of the Internal Revenue Code (concerning
666	666	15 charitable contributions).
667	667	16 (3) Add an amount equal to a deduction allowed or allowable
668	668	17 under Section 805 or Section 832(c) of the Internal Revenue Code
669	669	18 for taxes based on or measured by income and levied at the state
670	670	19 level by any state.
671	671	20 (4) Subtract an amount equal to the amount included in the
672	672	21 company's taxable income under Section 78 of the Internal
673	673	22 Revenue Code (concerning foreign tax credits).
674	674	23 (5) Add or subtract the amount necessary to make the adjusted
675	675	24 gross income of any taxpayer that owns property for which bonus
676	676	25 depreciation was allowed in the current taxable year or in an
677	677	26 earlier taxable year equal to the amount of adjusted gross income
678	678	27 that would have been computed had an election not been made
679	679	28 under Section 168(k) of the Internal Revenue Code to apply bonus
680	680	29 depreciation to the property in the year that it was placed in
681	681	30 service.
682	682	31 (6) Add an amount equal to any deduction allowed under Section
683	683	32 172 of the Internal Revenue Code (concerning net operating
684	684	33 losses).
685	685	34 (7) Add or subtract the amount necessary to make the adjusted
686	686	35 gross income of any taxpayer that placed Section 179 property (as
687	687	36 defined in Section 179 of the Internal Revenue Code) in service
688	688	37 in the current taxable year or in an earlier taxable year equal to
689	689	38 the amount of adjusted gross income that would have been
690	690	39 computed had an election for federal income tax purposes not
691	691	40 been made for the year in which the property was placed in
692	692	41 service to take deductions under Section 179 of the Internal
693	693	42 Revenue Code in a total amount exceeding the sum of:
694	694	2023 IN 1277—LS 6765/DI 116 17
695	695	1 (A) twenty-five thousand dollars ($25,000) to the extent
696	696	2 deductions under Section 179 of the Internal Revenue Code
697	697	3 were not elected as provided in clause (B); and
698	698	4 (B) for taxable years beginning after December 31, 2017, the
699	699	5 deductions elected under Section 179 of the Internal Revenue
700	700	6 Code on property acquired in an exchange if:
701	701	7 (i) the exchange would have been eligible for
702	702	8 nonrecognition of gain or loss under Section 1031 of the
703	703	9 Internal Revenue Code in effect on January 1, 2017;
704	704	10 (ii) the exchange is not eligible for nonrecognition of gain or
705	705	11 loss under Section 1031 of the Internal Revenue Code; and
706	706	12 (iii) the taxpayer made an election to take deductions under
707	707	13 Section 179 of the Internal Revenue Code with regard to the
708	708	14 acquired property in the year that the property was placed
709	709	15 into service.
710	710	16 The amount of deductions allowable for an item of property
711	711	17 under this clause may not exceed the amount of adjusted gross
712	712	18 income realized on the property that would have been deferred
713	713	19 under the Internal Revenue Code in effect on January 1, 2017.
714	714	20 (8) Subtract income that is:
715	715	21 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
716	716	22 derived from patents); and
717	717	23 (B) included in the insurance company's taxable income under
718	718	24 the Internal Revenue Code.
719	719	25 (9) Add an amount equal to any income not included in gross
720	720	26 income as a result of the deferral of income arising from business
721	721	27 indebtedness discharged in connection with the reacquisition after
722	722	28 December 31, 2008, and before January 1, 2011, of an applicable
723	723	29 debt instrument, as provided in Section 108(i) of the Internal
724	724	30 Revenue Code. Subtract from the adjusted gross income of any
725	725	31 taxpayer that added an amount to adjusted gross income in a
726	726	32 previous year the amount necessary to offset the amount included
727	727	33 in federal gross income as a result of the deferral of income
728	728	34 arising from business indebtedness discharged in connection with
729	729	35 the reacquisition after December 31, 2008, and before January 1,
730	730	36 2011, of an applicable debt instrument, as provided in Section
731	731	37 108(i) of the Internal Revenue Code.
732	732	38 (10) Add an amount equal to any exempt insurance income under
733	733	39 Section 953(e) of the Internal Revenue Code that is active
734	734	40 financing income under Subpart F of Subtitle A, Chapter 1,
735	735	41 Subchapter N of the Internal Revenue Code.
736	736	42 (11) Add the amount excluded from federal gross income under
737	737	2023 IN 1277—LS 6765/DI 116 18
738	738	1 Section 103 of the Internal Revenue Code for interest received on
739	739	2 an obligation of a state other than Indiana, or a political
740	740	3 subdivision of such a state, that is acquired by the taxpayer after
741	741	4 December 31, 2011.
742	742	5 (12) For taxable years beginning after December 25, 2016, add:
743	743	6 (A) an amount equal to the amount reported by the taxpayer on
744	744	7 IRC 965 Transition Tax Statement, line 1; or
745	745	8 (B) if the taxpayer deducted an amount under Section 965(c)
746	746	9 of the Internal Revenue Code in determining the taxpayer's
747	747	10 taxable income for purposes of the federal income tax, the
748	748	11 amount deducted under Section 965(c) of the Internal Revenue
749	749	12 Code.
750	750	13 (13) Add an amount equal to the deduction that was claimed by
751	751	14 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
752	752	15 Internal Revenue Code (attributable to global intangible
753	753	16 low-taxed income). The taxpayer shall separately specify the
754	754	17 amount of the reduction under Section 250(a)(1)(B)(i) of the
755	755	18 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
756	756	19 Internal Revenue Code.
757	757	20 (14) Subtract any interest expense paid or accrued in the current
758	758	21 taxable year but not deducted as a result of the limitation imposed
759	759	22 under Section 163(j)(1) of the Internal Revenue Code. Add any
760	760	23 interest expense paid or accrued in a previous taxable year but
761	761	24 allowed as a deduction under Section 163 of the Internal Revenue
762	762	25 Code in the current taxable year. For purposes of this subdivision,
763	763	26 an interest expense is considered paid or accrued only in the first
764	764	27 taxable year the deduction would have been allowable under
765	765	28 Section 163 of the Internal Revenue Code if the limitation under
766	766	29 Section 163(j)(1) of the Internal Revenue Code did not exist.
767	767	30 (15) Subtract the amount that would have been excluded from
768	768	31 gross income but for the enactment of Section 118(b)(2) of the
769	769	32 Internal Revenue Code for taxable years ending after December
770	770	33 22, 2017.
771	771	34 (16) Add an amount equal to the remainder of:
772	772	35 (A) the amount allowable as a deduction under Section 274(n)
773	773	36 of the Internal Revenue Code; minus
774	774	37 (B) the amount otherwise allowable as a deduction under
775	775	38 Section 274(n) of the Internal Revenue Code, if Section
776	776	39 274(n)(2)(D) of the Internal Revenue Code was not in effect
777	777	40 for amounts paid or incurred after December 31, 2020.
778	778	41 (17) For taxable years ending after March 12, 2020, subtract an
779	779	42 amount equal to the deduction disallowed pursuant to:
780	780	2023 IN 1277—LS 6765/DI 116 19
781	781	1 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
782	782	2 as modified by Sections 206 and 207 of the Taxpayer Certainty
783	783	3 and Disaster Relief Tax Act (Division EE of Public Law
784	784	4 116-260); and
785	785	5 (B) Section 3134(e) of the Internal Revenue Code.
786	786	6 (18) For taxable years beginning after December 31, 2022,
787	787	7 subtract an amount equal to the deduction disallowed under
788	788	8 Section 280C(h) of the Internal Revenue Code.
789	789	9 (19) Add or subtract any other amounts the taxpayer is:
790	790	10 (A) required to add or subtract; or
791	791	11 (B) entitled to deduct;
792	792	12 under IC 6-3-2.
793	793	13 (f) In the case of trusts and estates, "taxable income" (as defined for
794	794	14 trusts and estates in Section 641(b) of the Internal Revenue Code)
795	795	15 adjusted as follows:
796	796	16 (1) Subtract income that is exempt from taxation under this article
797	797	17 by the Constitution and statutes of the United States.
798	798	18 (2) Subtract an amount equal to the amount of a September 11
799	799	19 terrorist attack settlement payment included in the federal
800	800	20 adjusted gross income of the estate of a victim of the September
801	801	21 11 terrorist attack or a trust to the extent the trust benefits a victim
802	802	22 of the September 11 terrorist attack.
803	803	23 (3) Add or subtract the amount necessary to make the adjusted
804	804	24 gross income of any taxpayer that owns property for which bonus
805	805	25 depreciation was allowed in the current taxable year or in an
806	806	26 earlier taxable year equal to the amount of adjusted gross income
807	807	27 that would have been computed had an election not been made
808	808	28 under Section 168(k) of the Internal Revenue Code to apply bonus
809	809	29 depreciation to the property in the year that it was placed in
810	810	30 service.
811	811	31 (4) Add an amount equal to any deduction allowed under Section
812	812	32 172 of the Internal Revenue Code (concerning net operating
813	813	33 losses).
814	814	34 (5) Add or subtract the amount necessary to make the adjusted
815	815	35 gross income of any taxpayer that placed Section 179 property (as
816	816	36 defined in Section 179 of the Internal Revenue Code) in service
817	817	37 in the current taxable year or in an earlier taxable year equal to
818	818	38 the amount of adjusted gross income that would have been
819	819	39 computed had an election for federal income tax purposes not
820	820	40 been made for the year in which the property was placed in
821	821	41 service to take deductions under Section 179 of the Internal
822	822	42 Revenue Code in a total amount exceeding the sum of:
823	823	2023 IN 1277—LS 6765/DI 116 20
824	824	1 (A) twenty-five thousand dollars ($25,000) to the extent
825	825	2 deductions under Section 179 of the Internal Revenue Code
826	826	3 were not elected as provided in clause (B); and
827	827	4 (B) for taxable years beginning after December 31, 2017, the
828	828	5 deductions elected under Section 179 of the Internal Revenue
829	829	6 Code on property acquired in an exchange if:
830	830	7 (i) the exchange would have been eligible for
831	831	8 nonrecognition of gain or loss under Section 1031 of the
832	832	9 Internal Revenue Code in effect on January 1, 2017;
833	833	10 (ii) the exchange is not eligible for nonrecognition of gain or
834	834	11 loss under Section 1031 of the Internal Revenue Code; and
835	835	12 (iii) the taxpayer made an election to take deductions under
836	836	13 Section 179 of the Internal Revenue Code with regard to the
837	837	14 acquired property in the year that the property was placed
838	838	15 into service.
839	839	16 The amount of deductions allowable for an item of property
840	840	17 under this clause may not exceed the amount of adjusted gross
841	841	18 income realized on the property that would have been deferred
842	842	19 under the Internal Revenue Code in effect on January 1, 2017.
843	843	20 (6) Subtract income that is:
844	844	21 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
845	845	22 derived from patents); and
846	846	23 (B) included in the taxpayer's taxable income under the
847	847	24 Internal Revenue Code.
848	848	25 (7) Add an amount equal to any income not included in gross
849	849	26 income as a result of the deferral of income arising from business
850	850	27 indebtedness discharged in connection with the reacquisition after
851	851	28 December 31, 2008, and before January 1, 2011, of an applicable
852	852	29 debt instrument, as provided in Section 108(i) of the Internal
853	853	30 Revenue Code. Subtract from the adjusted gross income of any
854	854	31 taxpayer that added an amount to adjusted gross income in a
855	855	32 previous year the amount necessary to offset the amount included
856	856	33 in federal gross income as a result of the deferral of income
857	857	34 arising from business indebtedness discharged in connection with
858	858	35 the reacquisition after December 31, 2008, and before January 1,
859	859	36 2011, of an applicable debt instrument, as provided in Section
860	860	37 108(i) of the Internal Revenue Code.
861	861	38 (8) Add the amount excluded from federal gross income under
862	862	39 Section 103 of the Internal Revenue Code for interest received on
863	863	40 an obligation of a state other than Indiana, or a political
864	864	41 subdivision of such a state, that is acquired by the taxpayer after
865	865	42 December 31, 2011.
866	866	2023 IN 1277—LS 6765/DI 116 21
867	867	1 (9) For taxable years beginning after December 25, 2016, add an
868	868	2 amount equal to:
869	869	3 (A) the amount reported by the taxpayer on IRC 965
870	870	4 Transition Tax Statement, line 1;
871	871	5 (B) if the taxpayer deducted an amount under Section 965(c)
872	872	6 of the Internal Revenue Code in determining the taxpayer's
873	873	7 taxable income for purposes of the federal income tax, the
874	874	8 amount deducted under Section 965(c) of the Internal Revenue
875	875	9 Code; and
876	876	10 (C) with regard to any amounts of income under Section 965
877	877	11 of the Internal Revenue Code distributed by the taxpayer, the
878	878	12 deduction under Section 965(c) of the Internal Revenue Code
879	879	13 attributable to such distributed amounts and not reported to the
880	880	14 beneficiary.
881	881	15 For purposes of this article, the amount required to be added back
882	882	16 under clause (B) is not considered to be distributed or
883	883	17 distributable to a beneficiary of the estate or trust for purposes of
884	884	18 Sections 651 and 661 of the Internal Revenue Code.
885	885	19 (10) Subtract any interest expense paid or accrued in the current
886	886	20 taxable year but not deducted as a result of the limitation imposed
887	887	21 under Section 163(j)(1) of the Internal Revenue Code. Add any
888	888	22 interest expense paid or accrued in a previous taxable year but
889	889	23 allowed as a deduction under Section 163 of the Internal Revenue
890	890	24 Code in the current taxable year. For purposes of this subdivision,
891	891	25 an interest expense is considered paid or accrued only in the first
892	892	26 taxable year the deduction would have been allowable under
893	893	27 Section 163 of the Internal Revenue Code if the limitation under
894	894	28 Section 163(j)(1) of the Internal Revenue Code did not exist.
895	895	29 (11) Add an amount equal to the deduction for qualified business
896	896	30 income that was claimed by the taxpayer for the taxable year
897	897	31 under Section 199A of the Internal Revenue Code.
898	898	32 (12) Subtract the amount that would have been excluded from
899	899	33 gross income but for the enactment of Section 118(b)(2) of the
900	900	34 Internal Revenue Code for taxable years ending after December
901	901	35 22, 2017.
902	902	36 (13) Add an amount equal to the remainder of:
903	903	37 (A) the amount allowable as a deduction under Section 274(n)
904	904	38 of the Internal Revenue Code; minus
905	905	39 (B) the amount otherwise allowable as a deduction under
906	906	40 Section 274(n) of the Internal Revenue Code, if Section
907	907	41 274(n)(2)(D) of the Internal Revenue Code was not in effect
908	908	42 for amounts paid or incurred after December 31, 2020.
909	909	2023 IN 1277—LS 6765/DI 116 22
910	910	1 (14) For taxable years beginning after December 31, 2017, and
911	911	2 before January 1, 2021, add an amount equal to the excess
912	912	3 business loss of the taxpayer as defined in Section 461(l)(3) of the
913	913	4 Internal Revenue Code. In addition:
914	914	5 (A) If a taxpayer has an excess business loss under this
915	915	6 subdivision and also has modifications under subdivisions (3)
916	916	7 and (5) for property placed in service during the taxable year,
917	917	8 the taxpayer shall treat a portion of the taxable year
918	918	9 modifications for that property as occurring in the taxable year
919	919	10 the property is placed in service and a portion of the
920	920	11 modifications as occurring in the immediately following
921	921	12 taxable year.
922	922	13 (B) The portion of the modifications under subdivisions (3)
923	923	14 and (5) for property placed in service during the taxable year
924	924	15 treated as occurring in the taxable year in which the property
925	925	16 is placed in service equals:
926	926	17 (i) the modification for the property otherwise determined
927	927	18 under this section; minus
928	928	19 (ii) the excess business loss disallowed under this
929	929	20 subdivision;
930	930	21 but not less than zero (0).
931	931	22 (C) The portion of the modifications under subdivisions (3)
932	932	23 and (5) for property placed in service during the taxable year
933	933	24 treated as occurring in the taxable year immediately following
934	934	25 the taxable year in which the property is placed in service
935	935	26 equals the modification for the property otherwise determined
936	936	27 under this section minus the amount in clause (B).
937	937	28 (D) Any reallocation of modifications between taxable years
938	938	29 under clauses (B) and (C) shall be first allocated to the
939	939	30 modification under subdivision (3), then to the modification
940	940	31 under subdivision (5).
941	941	32 (15) For taxable years ending after March 12, 2020, subtract an
942	942	33 amount equal to the deduction disallowed pursuant to:
943	943	34 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
944	944	35 as modified by Sections 206 and 207 of the Taxpayer Certainty
945	945	36 and Disaster Relief Tax Act (Division EE of Public Law
946	946	37 116-260); and
947	947	38 (B) Section 3134(e) of the Internal Revenue Code.
948	948	39 (16) For taxable years beginning after December 31, 2022,
949	949	40 subtract an amount equal to the deduction disallowed under
950	950	41 Section 280C(h) of the Internal Revenue Code.
951	951	42 (17) Add or subtract any other amounts the taxpayer is:
952	952	2023 IN 1277—LS 6765/DI 116 23
953	953	1 (A) required to add or subtract; or
954	954	2 (B) entitled to deduct;
955	955	3 under IC 6-3-2.
956	956	4 (g) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17) may not
957	957	5 be construed to require an add back or allow a deduction or exemption
958	958	6 more than once for a particular add back, deduction, or exemption.
959	959	7 (h) For taxable years beginning after December 25, 2016, if:
960	960	8 (1) a taxpayer is a shareholder, either directly or indirectly, in a
961	961	9 corporation that is an E&P deficit foreign corporation as defined
962	962	10 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
963	963	11 earnings and profit deficit, or a portion of the earnings and profit
964	964	12 deficit, of the E&P deficit foreign corporation is permitted to
965	965	13 reduce the federal adjusted gross income or federal taxable
966	966	14 income of the taxpayer, the deficit, or the portion of the deficit,
967	967	15 shall also reduce the amount taxable under this section to the
968	968	16 extent permitted under the Internal Revenue Code, however, in no
969	969	17 case shall this permit a reduction in the amount taxable under
970	970	18 Section 965 of the Internal Revenue Code for purposes of this
971	971	19 section to be less than zero (0); and
972	972	20 (2) the Internal Revenue Service issues guidance that such an
973	973	21 income or deduction is not reported directly on a federal tax
974	974	22 return or is to be reported in a manner different than specified in
975	975	23 this section, this section shall be construed as if federal adjusted
976	976	24 gross income or federal taxable income included the income or
977	977	25 deduction.
978	978	26 (i) If a partner is required to include an item of income, a deduction,
979	979	27 or another tax attribute in the partner's adjusted gross income tax return
980	980	28 pursuant to IC 6-3-4.5, such item shall be considered to be includible
981	981	29 in the partner's federal adjusted gross income or federal taxable
982	982	30 income, regardless of whether such item is actually required to be
983	983	31 reported by the partner for federal income tax purposes. For purposes
984	984	32 of this subsection:
985	985	33 (1) items for which a valid election is made under IC 6-3-4.5-6,
986	986	34 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
987	987	35 in the partner's adjusted gross income or taxable income; and
988	988	36 (2) items for which the partnership did not make an election under
989	989	37 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
990	990	38 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
991	991	39 shall be included in the partner's adjusted gross income or taxable
992	992	40 income.
993	993	41 SECTION 2. IC 6-3-1-39 IS ADDED TO THE INDIANA CODE
994	994	42 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
995	995	2023 IN 1277—LS 6765/DI 116 24
996	996	1 1, 2023]: Sec. 39. "Qualified uniformed service income" means
997	997	2 wages that are paid to an individual employed by the United States
998	998	3 public health service commissioned corps.
999	999	4 SECTION 3. IC 6-3-2-4, AS AMENDED BY P.L.162-2019,
1000	1000	5 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1001	1001	6 JULY 1, 2023]: Sec. 4. (a) Each taxable year, an individual, or the
1002	1002	7 individual's surviving spouse, is entitled to the following:
1003	1003	8 (1) An adjusted gross income tax deduction for the first five
1004	1004	9 thousand dollars ($5,000) of income, excluding adjusted gross
1005	1005	10 income described in subdivision (2), received during the taxable
1006	1006	11 year by the individual, or the individual's surviving spouse, for the
1007	1007	12 individual's service in:
1008	1008	13 (A) an active or reserve component of the armed forces of the
1009	1009	14 United States, including the army, navy, air force, coast guard,
1010	1010	15 marine corps, merchant marine, Indiana army national guard,
1011	1011	16 or Indiana air national guard; or
1012	1012	17 (B) the United States public health service commissioned
1013	1013	18 corps.
1014	1014	19 (2) An adjusted gross income tax deduction for income from
1015	1015	20 retirement or survivor's benefits received during the taxable year
1016	1016	21 by the individual, or the individual's surviving spouse, for the
1017	1017	22 individual's service in the United States public health service
1018	1018	23 commissioned corps or an active or reserve component of the
1019	1019	24 armed forces of the United States, including the army, navy, air
1020	1020	25 force, coast guard, marine corps, merchant marine, Indiana army
1021	1021	26 national guard, or Indiana air national guard. The amount of the
1022	1022	27 deduction is the lesser of:
1023	1023	28 (A) the benefits included in the adjusted gross income of the
1024	1024	29 individual or the individual's surviving spouse; or
1025	1025	30 (B) six thousand two hundred fifty dollars ($6,250) plus the
1026	1026	31 following:
1027	1027	32 (i) For taxable years beginning in 2019, twenty-five percent
1028	1028	33 (25%) of the amount of the benefits in excess of six
1029	1029	34 thousand two hundred fifty dollars ($6,250).
1030	1030	35 (ii) For taxable years beginning in 2020, fifty percent (50%)
1031	1031	36 of the amount of the benefits in excess of six thousand two
1032	1032	37 hundred fifty dollars ($6,250).
1033	1033	38 (iii) For taxable years beginning in 2021, seventy-five
1034	1034	39 percent (75%) of the amount of the benefits in excess of six
1035	1035	40 thousand two hundred fifty dollars ($6,250).
1036	1036	41 (iv) For taxable years beginning after 2021, one hundred
1037	1037	42 percent (100%) of the amount of the benefits in excess of six
1038	1038	2023 IN 1277—LS 6765/DI 116 25
1039	1039	1 thousand two hundred fifty dollars ($6,250).
1040	1040	2 (b) An individual whose qualified military income or qualified
1041	1041	3 uniformed service income is subtracted from the individual's federal
1042	1042	4 adjusted gross income under IC 6-3-1-3.5(a)(18) for Indiana individual
1043	1043	5 income tax purposes is not, for that taxable year, entitled to a deduction
1044	1044	6 under this section for the same qualified military income or qualified
1045	1045	7 uniformed service income that is deducted under IC 6-3-1-3.5(a)(18).
1046	1046	2023 IN 1277—LS 6765/DI 116