Introduced Version SENATE BILL No. 223 _____ DIGEST OF INTRODUCED BILL Citations Affected: IC 6-3-1-3.5. Synopsis: Deduction for long term care premiums. Provides a deduction from adjusted gross income for any premiums paid during a taxable year for a long term care insurance policy purchased in a state other than Indiana that is considered to have reciprocity with Indiana under an Indiana long term care insurance program. Provides a deduction from adjusted gross income for any premiums paid during a taxable year for a qualified long term care insurance policy under the Indiana long term care insurance partnership program. Effective: January 1, 2024. Walker G January 10, 2023, read first time and referred to Committee on Insurance and Financial Institutions. 2023 IN 223—LS 6342/DI 134 Introduced First Regular Session of the 123rd General Assembly (2023) PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type. Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution. Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2022 Regular Session of the General Assembly. SENATE BILL No. 223 A BILL FOR AN ACT to amend the Indiana Code concerning taxation. Be it enacted by the General Assembly of the State of Indiana: 1 SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss), 2 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE 3 JANUARY 1, 2024]: Sec. 3.5. When used in this article, the term 4 "adjusted gross income" shall mean the following: 5 (a) In the case of all individuals, "adjusted gross income" (as 6 defined in Section 62 of the Internal Revenue Code), modified as 7 follows: 8 (1) Subtract income that is exempt from taxation under this article 9 by the Constitution and statutes of the United States. 10 (2) Except as provided in subsection (c), add an amount equal to 11 any deduction or deductions allowed or allowable pursuant to 12 Section 62 of the Internal Revenue Code for taxes based on or 13 measured by income and levied at the state level by any state of 14 the United States. 15 (3) Subtract one thousand dollars ($1,000), or in the case of a 16 joint return filed by a husband and wife, subtract for each spouse 17 one thousand dollars ($1,000). 2023 IN 223—LS 6342/DI 134 2 1 (4) Subtract one thousand dollars ($1,000) for: 2 (A) each of the exemptions provided by Section 151(c) of the 3 Internal Revenue Code (as effective January 1, 2017); 4 (B) each additional amount allowable under Section 63(f) of 5 the Internal Revenue Code; and 6 (C) the spouse of the taxpayer if a separate return is made by 7 the taxpayer and if the spouse, for the calendar year in which 8 the taxable year of the taxpayer begins, has no gross income 9 and is not the dependent of another taxpayer. 10 (5) Subtract: 11 (A) One thousand five hundred dollars ($1,500) for each of the 12 exemptions allowed under Section 151(c)(1)(B) of the Internal 13 Revenue Code (as effective January 1, 2004). 14 (B) One thousand five hundred dollars ($1,500) for each 15 exemption allowed under Section 151(c) of the Internal 16 Revenue Code (as effective January 1, 2017) for an individual: 17 (i) who is less than nineteen (19) years of age or is a 18 full-time student who is less than twenty-four (24) years of 19 age; 20 (ii) for whom the taxpayer is the legal guardian; and 21 (iii) for whom the taxpayer does not claim an exemption 22 under clause (A). 23 (C) Five hundred dollars ($500) for each additional amount 24 allowable under Section 63(f)(1) of the Internal Revenue Code 25 if the federal adjusted gross income of the taxpayer, or the 26 taxpayer and the taxpayer's spouse in the case of a joint return, 27 is less than forty thousand dollars ($40,000). In the case of a 28 married individual filing a separate return, the qualifying 29 income amount in this clause is equal to twenty thousand 30 dollars ($20,000). 31 (D) Three thousand dollars ($3,000) for each exemption 32 allowed under Section 151(c) of the Internal Revenue Code (as 33 effective January 1, 2017) for an individual who is: 34 (i) an adopted child of the taxpayer; and 35 (ii) less than nineteen (19) years of age or is a full-time 36 student who is less than twenty-four (24) years of age. 37 This amount is in addition to any amount subtracted under 38 clause (A) or (B). 39 This amount is in addition to the amount subtracted under 40 subdivision (4). 41 (6) Subtract any amounts included in federal adjusted gross 42 income under Section 111 of the Internal Revenue Code as a 2023 IN 223—LS 6342/DI 134 3 1 recovery of items previously deducted as an itemized deduction 2 from adjusted gross income. 3 (7) Subtract any amounts included in federal adjusted gross 4 income under the Internal Revenue Code which amounts were 5 received by the individual as supplemental railroad retirement 6 annuities under 45 U.S.C. 231 and which are not deductible under 7 subdivision (1). 8 (8) Subtract an amount equal to the amount of federal Social 9 Security and Railroad Retirement benefits included in a taxpayer's 10 federal gross income by Section 86 of the Internal Revenue Code. 11 (9) In the case of a nonresident taxpayer or a resident taxpayer 12 residing in Indiana for a period of less than the taxpayer's entire 13 taxable year, the total amount of the deductions allowed pursuant 14 to subdivisions (3), (4), and (5) shall be reduced to an amount 15 which bears the same ratio to the total as the taxpayer's income 16 taxable in Indiana bears to the taxpayer's total income. 17 (10) In the case of an individual who is a recipient of assistance 18 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7, 19 subtract an amount equal to that portion of the individual's 20 adjusted gross income with respect to which the individual is not 21 allowed under federal law to retain an amount to pay state and 22 local income taxes. 23 (11) In the case of an eligible individual, subtract the amount of 24 a Holocaust victim's settlement payment included in the 25 individual's federal adjusted gross income. 26 (12) Subtract an amount equal to the portion of any premiums 27 paid during the taxable year by the taxpayer for: 28 (A) a qualified long term care policy as defined in 29 IC 12-15-39.6-5; 30 (B) a qualified long term care insurance policy as defined 31 in IC 12-15-39.8-3; or 32 (C) a long term care insurance policy purchased in a state 33 other than Indiana that is considered to have reciprocity 34 with Indiana under a long term care insurance program 35 set forth in IC 12-15-39.6 or IC 12-15-39.8; 36 for the taxpayer or the taxpayer's spouse if the taxpayer and the 37 taxpayer's spouse file a joint income tax return or the taxpayer is 38 otherwise entitled to a deduction under this subdivision for the 39 taxpayer's spouse, or both. 40 (13) Subtract an amount equal to the lesser of: 41 (A) two thousand five hundred dollars ($2,500), or one 42 thousand two hundred fifty dollars ($1,250) in the case of a 2023 IN 223—LS 6342/DI 134 4 1 married individual filing a separate return; or 2 (B) the amount of property taxes that are paid during the 3 taxable year in Indiana by the individual on the individual's 4 principal place of residence. 5 (14) Subtract an amount equal to the amount of a September 11 6 terrorist attack settlement payment included in the individual's 7 federal adjusted gross income. 8 (15) Add or subtract the amount necessary to make the adjusted 9 gross income of any taxpayer that owns property for which bonus 10 depreciation was allowed in the current taxable year or in an 11 earlier taxable year equal to the amount of adjusted gross income 12 that would have been computed had an election not been made 13 under Section 168(k) of the Internal Revenue Code to apply bonus 14 depreciation to the property in the year that it was placed in 15 service. 16 (16) Add an amount equal to any deduction allowed under 17 Section 172 of the Internal Revenue Code (concerning net 18 operating losses). 19 (17) Add or subtract the amount necessary to make the adjusted 20 gross income of any taxpayer that placed Section 179 property (as 21 defined in Section 179 of the Internal Revenue Code) in service 22 in the current taxable year or in an earlier taxable year equal to 23 the amount of adjusted gross income that would have been 24 computed had an election for federal income tax purposes not 25 been made for the year in which the property was placed in 26 service to take deductions under Section 179 of the Internal 27 Revenue Code in a total amount exceeding the sum of: 28 (A) twenty-five thousand dollars ($25,000) to the extent 29 deductions under Section 179 of the Internal Revenue Code 30 were not elected as provided in clause (B); and 31 (B) for taxable years beginning after December 31, 2017, the 32 deductions elected under Section 179 of the Internal Revenue 33 Code on property acquired in an exchange if: 34 (i) the exchange would have been eligible for 35 nonrecognition of gain or loss under Section 1031 of the 36 Internal Revenue Code in effect on January 1, 2017; 37 (ii) the exchange is not eligible for nonrecognition of gain or 38 loss under Section 1031 of the Internal Revenue Code; and 39 (iii) the taxpayer made an election to take deductions under 40 Section 179 of the Internal Revenue Code with regard to the 41 acquired property in the year that the property was placed 42 into service. 2023 IN 223—LS 6342/DI 134 5 1 The amount of deductions allowable for an item of property 2 under this clause may not exceed the amount of adjusted gross 3 income realized on the property that would have been deferred 4 under the Internal Revenue Code in effect on January 1, 2017. 5 (18) Subtract an amount equal to the amount of the taxpayer's 6 qualified military income that was not excluded from the 7 taxpayer's gross income for federal income tax purposes under 8 Section 112 of the Internal Revenue Code. 9 (19) Subtract income that is: 10 (A) exempt from taxation under IC 6-3-2-21.7 (certain income 11 derived from patents); and 12 (B) included in the individual's federal adjusted gross income 13 under the Internal Revenue Code. 14 (20) Add an amount equal to any income not included in gross 15 income as a result of the deferral of income arising from business 16 indebtedness discharged in connection with the reacquisition after 17 December 31, 2008, and before January 1, 2011, of an applicable 18 debt instrument, as provided in Section 108(i) of the Internal 19 Revenue Code. Subtract the amount necessary from the adjusted 20 gross income of any taxpayer that added an amount to adjusted 21 gross income in a previous year to offset the amount included in 22 federal gross income as a result of the deferral of income arising 23 from business indebtedness discharged in connection with the 24 reacquisition after December 31, 2008, and before January 1, 25 2011, of an applicable debt instrument, as provided in Section 26 108(i) of the Internal Revenue Code. 27 (21) Add the amount excluded from federal gross income under 28 Section 103 of the Internal Revenue Code for interest received on 29 an obligation of a state other than Indiana, or a political 30 subdivision of such a state, that is acquired by the taxpayer after 31 December 31, 2011. 32 (22) Subtract an amount as described in Section 1341(a)(2) of the 33 Internal Revenue Code to the extent, if any, that the amount was 34 previously included in the taxpayer's adjusted gross income for a 35 prior taxable year. 36 (23) For taxable years beginning after December 25, 2016, add an 37 amount equal to the deduction for deferred foreign income that 38 was claimed by the taxpayer for the taxable year under Section 39 965(c) of the Internal Revenue Code. 40 (24) Subtract any interest expense paid or accrued in the current 41 taxable year but not deducted as a result of the limitation imposed 42 under Section 163(j)(1) of the Internal Revenue Code. Add any 2023 IN 223—LS 6342/DI 134 6 1 interest expense paid or accrued in a previous taxable year but 2 allowed as a deduction under Section 163 of the Internal Revenue 3 Code in the current taxable year. For purposes of this subdivision, 4 an interest expense is considered paid or accrued only in the first 5 taxable year the deduction would have been allowable under 6 Section 163 of the Internal Revenue Code if the limitation under 7 Section 163(j)(1) of the Internal Revenue Code did not exist. 8 (25) Subtract the amount that would have been excluded from 9 gross income but for the enactment of Section 118(b)(2) of the 10 Internal Revenue Code for taxable years ending after December 11 22, 2017. 12 (26) For taxable years beginning after December 31, 2019, and 13 before January 1, 2021, add an amount of the deduction claimed 14 under Section 62(a)(22) of the Internal Revenue Code. 15 (27) For taxable years beginning after December 31, 2019, for 16 payments made by an employer under an education assistance 17 program after March 27, 2020: 18 (A) add the amount of payments by an employer that are 19 excluded from the taxpayer's federal gross income under 20 Section 127(c)(1)(B) of the Internal Revenue Code; and 21 (B) deduct the interest allowable under Section 221 of the 22 Internal Revenue Code, if the disallowance under Section 23 221(e)(1) of the Internal Revenue Code did not apply to the 24 payments described in clause (A). For purposes of applying 25 Section 221(b) of the Internal Revenue Code to the amount 26 allowable under this clause, the amount under clause (A) shall 27 not be added to adjusted gross income. 28 (28) Add an amount equal to the remainder of: 29 (A) the amount allowable as a deduction under Section 274(n) 30 of the Internal Revenue Code; minus 31 (B) the amount otherwise allowable as a deduction under 32 Section 274(n) of the Internal Revenue Code, if Section 33 274(n)(2)(D) of the Internal Revenue Code was not in effect 34 for amounts paid or incurred after December 31, 2020. 35 (29) For taxable years beginning after December 31, 2017, and 36 before January 1, 2021, add an amount equal to the excess 37 business loss of the taxpayer as defined in Section 461(l)(3) of the 38 Internal Revenue Code. In addition: 39 (A) If a taxpayer has an excess business loss under this 40 subdivision and also has modifications under subdivisions (15) 41 and (17) for property placed in service during the taxable year, 42 the taxpayer shall treat a portion of the taxable year 2023 IN 223—LS 6342/DI 134 7 1 modifications for that property as occurring in the taxable year 2 the property is placed in service and a portion of the 3 modifications as occurring in the immediately following 4 taxable year. 5 (B) The portion of the modifications under subdivisions (15) 6 and (17) for property placed in service during the taxable year 7 treated as occurring in the taxable year in which the property 8 is placed in service equals: 9 (i) the modification for the property otherwise determined 10 under this section; minus 11 (ii) the excess business loss disallowed under this 12 subdivision; 13 but not less than zero (0). 14 (C) The portion of the modifications under subdivisions (15) 15 and (17) for property placed in service during the taxable year 16 treated as occurring in the taxable year immediately following 17 the taxable year in which the property is placed in service 18 equals the modification for the property otherwise determined 19 under this section minus the amount in clause (B). 20 (D) Any reallocation of modifications between taxable years 21 under clauses (B) and (C) shall be first allocated to the 22 modification under subdivision (15), then to the modification 23 under subdivision (17). 24 (30) Add an amount equal to the amount excluded from federal 25 gross income under Section 108(f)(5) of the Internal Revenue 26 Code. For purposes of this subdivision: 27 (A) if an amount excluded under Section 108(f)(5) of the 28 Internal Revenue Code would be excludible under Section 29 108(a)(1)(B) of the Internal Revenue Code, the exclusion 30 under Section 108(a)(1)(B) of the Internal Revenue Code shall 31 take precedence; and 32 (B) if an amount would have been excludible under Section 33 108(f)(5) of the Internal Revenue Code as in effect on January 34 1, 2020, the amount is not required to be added back under this 35 subdivision. 36 (31) For taxable years ending after March 12, 2020, subtract an 37 amount equal to the deduction disallowed pursuant to: 38 (A) Section 2301(e) of the CARES Act (Public Law 116-136), 39 as modified by Sections 206 and 207 of the Taxpayer Certainty 40 and Disaster Relief Tax Act (Division EE of Public Law 41 116-260); and 42 (B) Section 3134(e) of the Internal Revenue Code. 2023 IN 223—LS 6342/DI 134 8 1 (32) Subtract the amount of an annual grant amount distributed to 2 a taxpayer's Indiana education scholarship account under 3 IC 20-51.4-4-2 that is used for a qualified expense (as defined in 4 IC 20-51.4-2-9) or to an Indiana enrichment scholarship account 5 under IC 20-52 that is used for qualified expenses (as defined in 6 IC 20-52-2-6), to the extent the distribution used for the qualified 7 expense is included in the taxpayer's federal adjusted gross 8 income under the Internal Revenue Code. 9 (33) For taxable years beginning after December 31, 2019, and 10 before January 1, 2021, add an amount equal to the amount of 11 unemployment compensation excluded from federal gross income 12 under Section 85(c) of the Internal Revenue Code. 13 (34) For taxable years beginning after December 31, 2022, 14 subtract an amount equal to the deduction disallowed under 15 Section 280C(h) of the Internal Revenue Code. 16 (35) Subtract any other amounts the taxpayer is entitled to deduct 17 under IC 6-3-2. 18 (b) In the case of corporations, the same as "taxable income" (as 19 defined in Section 63 of the Internal Revenue Code) adjusted as 20 follows: 21 (1) Subtract income that is exempt from taxation under this article 22 by the Constitution and statutes of the United States. 23 (2) Add an amount equal to any deduction or deductions allowed 24 or allowable pursuant to Section 170 of the Internal Revenue 25 Code (concerning charitable contributions). 26 (3) Except as provided in subsection (c), add an amount equal to 27 any deduction or deductions allowed or allowable pursuant to 28 Section 63 of the Internal Revenue Code for taxes based on or 29 measured by income and levied at the state level by any state of 30 the United States. 31 (4) Subtract an amount equal to the amount included in the 32 corporation's taxable income under Section 78 of the Internal 33 Revenue Code (concerning foreign tax credits). 34 (5) Add or subtract the amount necessary to make the adjusted 35 gross income of any taxpayer that owns property for which bonus 36 depreciation was allowed in the current taxable year or in an 37 earlier taxable year equal to the amount of adjusted gross income 38 that would have been computed had an election not been made 39 under Section 168(k) of the Internal Revenue Code to apply bonus 40 depreciation to the property in the year that it was placed in 41 service. 42 (6) Add an amount equal to any deduction allowed under Section 2023 IN 223—LS 6342/DI 134 9 1 172 of the Internal Revenue Code (concerning net operating 2 losses). 3 (7) Add or subtract the amount necessary to make the adjusted 4 gross income of any taxpayer that placed Section 179 property (as 5 defined in Section 179 of the Internal Revenue Code) in service 6 in the current taxable year or in an earlier taxable year equal to 7 the amount of adjusted gross income that would have been 8 computed had an election for federal income tax purposes not 9 been made for the year in which the property was placed in 10 service to take deductions under Section 179 of the Internal 11 Revenue Code in a total amount exceeding the sum of: 12 (A) twenty-five thousand dollars ($25,000) to the extent 13 deductions under Section 179 of the Internal Revenue Code 14 were not elected as provided in clause (B); and 15 (B) for taxable years beginning after December 31, 2017, the 16 deductions elected under Section 179 of the Internal Revenue 17 Code on property acquired in an exchange if: 18 (i) the exchange would have been eligible for 19 nonrecognition of gain or loss under Section 1031 of the 20 Internal Revenue Code in effect on January 1, 2017; 21 (ii) the exchange is not eligible for nonrecognition of gain or 22 loss under Section 1031 of the Internal Revenue Code; and 23 (iii) the taxpayer made an election to take deductions under 24 Section 179 of the Internal Revenue Code with regard to the 25 acquired property in the year that the property was placed 26 into service. 27 The amount of deductions allowable for an item of property 28 under this clause may not exceed the amount of adjusted gross 29 income realized on the property that would have been deferred 30 under the Internal Revenue Code in effect on January 1, 2017. 31 (8) Add to the extent required by IC 6-3-2-20: 32 (A) the amount of intangible expenses (as defined in 33 IC 6-3-2-20) for the taxable year that reduced the corporation's 34 taxable income (as defined in Section 63 of the Internal 35 Revenue Code) for federal income tax purposes; and 36 (B) any directly related interest expenses (as defined in 37 IC 6-3-2-20) that reduced the corporation's adjusted gross 38 income (determined without regard to this subdivision). For 39 purposes of this clause, any directly related interest expense 40 that constitutes business interest within the meaning of Section 41 163(j) of the Internal Revenue Code shall be considered to 42 have reduced the taxpayer's federal taxable income only in the 2023 IN 223—LS 6342/DI 134 10 1 first taxable year in which the deduction otherwise would have 2 been allowable under Section 163 of the Internal Revenue 3 Code if the limitation under Section 163(j)(1) of the Internal 4 Revenue Code did not exist. 5 (9) Add an amount equal to any deduction for dividends paid (as 6 defined in Section 561 of the Internal Revenue Code) to 7 shareholders of a captive real estate investment trust (as defined 8 in section 34.5 of this chapter). 9 (10) Subtract income that is: 10 (A) exempt from taxation under IC 6-3-2-21.7 (certain income 11 derived from patents); and 12 (B) included in the corporation's taxable income under the 13 Internal Revenue Code. 14 (11) Add an amount equal to any income not included in gross 15 income as a result of the deferral of income arising from business 16 indebtedness discharged in connection with the reacquisition after 17 December 31, 2008, and before January 1, 2011, of an applicable 18 debt instrument, as provided in Section 108(i) of the Internal 19 Revenue Code. Subtract from the adjusted gross income of any 20 taxpayer that added an amount to adjusted gross income in a 21 previous year the amount necessary to offset the amount included 22 in federal gross income as a result of the deferral of income 23 arising from business indebtedness discharged in connection with 24 the reacquisition after December 31, 2008, and before January 1, 25 2011, of an applicable debt instrument, as provided in Section 26 108(i) of the Internal Revenue Code. 27 (12) Add the amount excluded from federal gross income under 28 Section 103 of the Internal Revenue Code for interest received on 29 an obligation of a state other than Indiana, or a political 30 subdivision of such a state, that is acquired by the taxpayer after 31 December 31, 2011. 32 (13) For taxable years beginning after December 25, 2016: 33 (A) for a corporation other than a real estate investment trust, 34 add: 35 (i) an amount equal to the amount reported by the taxpayer 36 on IRC 965 Transition Tax Statement, line 1; or 37 (ii) if the taxpayer deducted an amount under Section 965(c) 38 of the Internal Revenue Code in determining the taxpayer's 39 taxable income for purposes of the federal income tax, the 40 amount deducted under Section 965(c) of the Internal 41 Revenue Code; and 42 (B) for a real estate investment trust, add an amount equal to 2023 IN 223—LS 6342/DI 134 11 1 the deduction for deferred foreign income that was claimed by 2 the taxpayer for the taxable year under Section 965(c) of the 3 Internal Revenue Code, but only to the extent that the taxpayer 4 included income pursuant to Section 965 of the Internal 5 Revenue Code in its taxable income for federal income tax 6 purposes or is required to add back dividends paid under 7 subdivision (9). 8 (14) Add an amount equal to the deduction that was claimed by 9 the taxpayer for the taxable year under Section 250(a)(1)(B) of the 10 Internal Revenue Code (attributable to global intangible 11 low-taxed income). The taxpayer shall separately specify the 12 amount of the reduction under Section 250(a)(1)(B)(i) of the 13 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the 14 Internal Revenue Code. 15 (15) Subtract any interest expense paid or accrued in the current 16 taxable year but not deducted as a result of the limitation imposed 17 under Section 163(j)(1) of the Internal Revenue Code. Add any 18 interest expense paid or accrued in a previous taxable year but 19 allowed as a deduction under Section 163 of the Internal Revenue 20 Code in the current taxable year. For purposes of this subdivision, 21 an interest expense is considered paid or accrued only in the first 22 taxable year the deduction would have been allowable under 23 Section 163 of the Internal Revenue Code if the limitation under 24 Section 163(j)(1) of the Internal Revenue Code did not exist. 25 (16) Subtract the amount that would have been excluded from 26 gross income but for the enactment of Section 118(b)(2) of the 27 Internal Revenue Code for taxable years ending after December 28 22, 2017. 29 (17) Add an amount equal to the remainder of: 30 (A) the amount allowable as a deduction under Section 274(n) 31 of the Internal Revenue Code; minus 32 (B) the amount otherwise allowable as a deduction under 33 Section 274(n) of the Internal Revenue Code, if Section 34 274(n)(2)(D) of the Internal Revenue Code was not in effect 35 for amounts paid or incurred after December 31, 2020. 36 (18) For taxable years ending after March 12, 2020, subtract an 37 amount equal to the deduction disallowed pursuant to: 38 (A) Section 2301(e) of the CARES Act (Public Law 116-136), 39 as modified by Sections 206 and 207 of the Taxpayer Certainty 40 and Disaster Relief Tax Act (Division EE of Public Law 41 116-260); and 42 (B) Section 3134(e) of the Internal Revenue Code. 2023 IN 223—LS 6342/DI 134 12 1 (19) For taxable years beginning after December 31, 2022, 2 subtract an amount equal to the deduction disallowed under 3 Section 280C(h) of the Internal Revenue Code. 4 (20) Add or subtract any other amounts the taxpayer is: 5 (A) required to add or subtract; or 6 (B) entitled to deduct; 7 under IC 6-3-2. 8 (c) The following apply to taxable years beginning after December 9 31, 2018, for purposes of the add back of any deduction allowed on the 10 taxpayer's federal income tax return for wagering taxes, as provided in 11 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if 12 the taxpayer is a corporation: 13 (1) For taxable years beginning after December 31, 2018, and 14 before January 1, 2020, a taxpayer is required to add back under 15 this section eighty-seven and five-tenths percent (87.5%) of any 16 deduction allowed on the taxpayer's federal income tax return for 17 wagering taxes. 18 (2) For taxable years beginning after December 31, 2019, and 19 before January 1, 2021, a taxpayer is required to add back under 20 this section seventy-five percent (75%) of any deduction allowed 21 on the taxpayer's federal income tax return for wagering taxes. 22 (3) For taxable years beginning after December 31, 2020, and 23 before January 1, 2022, a taxpayer is required to add back under 24 this section sixty-two and five-tenths percent (62.5%) of any 25 deduction allowed on the taxpayer's federal income tax return for 26 wagering taxes. 27 (4) For taxable years beginning after December 31, 2021, and 28 before January 1, 2023, a taxpayer is required to add back under 29 this section fifty percent (50%) of any deduction allowed on the 30 taxpayer's federal income tax return for wagering taxes. 31 (5) For taxable years beginning after December 31, 2022, and 32 before January 1, 2024, a taxpayer is required to add back under 33 this section thirty-seven and five-tenths percent (37.5%) of any 34 deduction allowed on the taxpayer's federal income tax return for 35 wagering taxes. 36 (6) For taxable years beginning after December 31, 2023, and 37 before January 1, 2025, a taxpayer is required to add back under 38 this section twenty-five percent (25%) of any deduction allowed 39 on the taxpayer's federal income tax return for wagering taxes. 40 (7) For taxable years beginning after December 31, 2024, and 41 before January 1, 2026, a taxpayer is required to add back under 42 this section twelve and five-tenths percent (12.5%) of any 2023 IN 223—LS 6342/DI 134 13 1 deduction allowed on the taxpayer's federal income tax return for 2 wagering taxes. 3 (8) For taxable years beginning after December 31, 2025, a 4 taxpayer is not required to add back under this section any amount 5 of a deduction allowed on the taxpayer's federal income tax return 6 for wagering taxes. 7 (d) In the case of life insurance companies (as defined in Section 8 816(a) of the Internal Revenue Code) that are organized under Indiana 9 law, the same as "life insurance company taxable income" (as defined 10 in Section 801 of the Internal Revenue Code), adjusted as follows: 11 (1) Subtract income that is exempt from taxation under this article 12 by the Constitution and statutes of the United States. 13 (2) Add an amount equal to any deduction allowed or allowable 14 under Section 170 of the Internal Revenue Code (concerning 15 charitable contributions). 16 (3) Add an amount equal to a deduction allowed or allowable 17 under Section 805 or Section 832(c) of the Internal Revenue Code 18 for taxes based on or measured by income and levied at the state 19 level by any state. 20 (4) Subtract an amount equal to the amount included in the 21 company's taxable income under Section 78 of the Internal 22 Revenue Code (concerning foreign tax credits). 23 (5) Add or subtract the amount necessary to make the adjusted 24 gross income of any taxpayer that owns property for which bonus 25 depreciation was allowed in the current taxable year or in an 26 earlier taxable year equal to the amount of adjusted gross income 27 that would have been computed had an election not been made 28 under Section 168(k) of the Internal Revenue Code to apply bonus 29 depreciation to the property in the year that it was placed in 30 service. 31 (6) Add an amount equal to any deduction allowed under Section 32 172 of the Internal Revenue Code (concerning net operating 33 losses). 34 (7) Add or subtract the amount necessary to make the adjusted 35 gross income of any taxpayer that placed Section 179 property (as 36 defined in Section 179 of the Internal Revenue Code) in service 37 in the current taxable year or in an earlier taxable year equal to 38 the amount of adjusted gross income that would have been 39 computed had an election for federal income tax purposes not 40 been made for the year in which the property was placed in 41 service to take deductions under Section 179 of the Internal 42 Revenue Code in a total amount exceeding the sum of: 2023 IN 223—LS 6342/DI 134 14 1 (A) twenty-five thousand dollars ($25,000) to the extent 2 deductions under Section 179 of the Internal Revenue Code 3 were not elected as provided in clause (B); and 4 (B) for taxable years beginning after December 31, 2017, the 5 deductions elected under Section 179 of the Internal Revenue 6 Code on property acquired in an exchange if: 7 (i) the exchange would have been eligible for 8 nonrecognition of gain or loss under Section 1031 of the 9 Internal Revenue Code in effect on January 1, 2017; 10 (ii) the exchange is not eligible for nonrecognition of gain or 11 loss under Section 1031 of the Internal Revenue Code; and 12 (iii) the taxpayer made an election to take deductions under 13 Section 179 of the Internal Revenue Code with regard to the 14 acquired property in the year that the property was placed 15 into service. 16 The amount of deductions allowable for an item of property 17 under this clause may not exceed the amount of adjusted gross 18 income realized on the property that would have been deferred 19 under the Internal Revenue Code in effect on January 1, 2017. 20 (8) Subtract income that is: 21 (A) exempt from taxation under IC 6-3-2-21.7 (certain income 22 derived from patents); and 23 (B) included in the insurance company's taxable income under 24 the Internal Revenue Code. 25 (9) Add an amount equal to any income not included in gross 26 income as a result of the deferral of income arising from business 27 indebtedness discharged in connection with the reacquisition after 28 December 31, 2008, and before January 1, 2011, of an applicable 29 debt instrument, as provided in Section 108(i) of the Internal 30 Revenue Code. Subtract from the adjusted gross income of any 31 taxpayer that added an amount to adjusted gross income in a 32 previous year the amount necessary to offset the amount included 33 in federal gross income as a result of the deferral of income 34 arising from business indebtedness discharged in connection with 35 the reacquisition after December 31, 2008, and before January 1, 36 2011, of an applicable debt instrument, as provided in Section 37 108(i) of the Internal Revenue Code. 38 (10) Add an amount equal to any exempt insurance income under 39 Section 953(e) of the Internal Revenue Code that is active 40 financing income under Subpart F of Subtitle A, Chapter 1, 41 Subchapter N of the Internal Revenue Code. 42 (11) Add the amount excluded from federal gross income under 2023 IN 223—LS 6342/DI 134 15 1 Section 103 of the Internal Revenue Code for interest received on 2 an obligation of a state other than Indiana, or a political 3 subdivision of such a state, that is acquired by the taxpayer after 4 December 31, 2011. 5 (12) For taxable years beginning after December 25, 2016, add: 6 (A) an amount equal to the amount reported by the taxpayer on 7 IRC 965 Transition Tax Statement, line 1; or 8 (B) if the taxpayer deducted an amount under Section 965(c) 9 of the Internal Revenue Code in determining the taxpayer's 10 taxable income for purposes of the federal income tax, the 11 amount deducted under Section 965(c) of the Internal Revenue 12 Code. 13 (13) Add an amount equal to the deduction that was claimed by 14 the taxpayer for the taxable year under Section 250(a)(1)(B) of the 15 Internal Revenue Code (attributable to global intangible 16 low-taxed income). The taxpayer shall separately specify the 17 amount of the reduction under Section 250(a)(1)(B)(i) of the 18 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the 19 Internal Revenue Code. 20 (14) Subtract any interest expense paid or accrued in the current 21 taxable year but not deducted as a result of the limitation imposed 22 under Section 163(j)(1) of the Internal Revenue Code. Add any 23 interest expense paid or accrued in a previous taxable year but 24 allowed as a deduction under Section 163 of the Internal Revenue 25 Code in the current taxable year. For purposes of this subdivision, 26 an interest expense is considered paid or accrued only in the first 27 taxable year the deduction would have been allowable under 28 Section 163 of the Internal Revenue Code if the limitation under 29 Section 163(j)(1) of the Internal Revenue Code did not exist. 30 (15) Subtract the amount that would have been excluded from 31 gross income but for the enactment of Section 118(b)(2) of the 32 Internal Revenue Code for taxable years ending after December 33 22, 2017. 34 (16) Add an amount equal to the remainder of: 35 (A) the amount allowable as a deduction under Section 274(n) 36 of the Internal Revenue Code; minus 37 (B) the amount otherwise allowable as a deduction under 38 Section 274(n) of the Internal Revenue Code, if Section 39 274(n)(2)(D) of the Internal Revenue Code was not in effect 40 for amounts paid or incurred after December 31, 2020. 41 (17) For taxable years ending after March 12, 2020, subtract an 42 amount equal to the deduction disallowed pursuant to: 2023 IN 223—LS 6342/DI 134 16 1 (A) Section 2301(e) of the CARES Act (Public Law 116-136), 2 as modified by Sections 206 and 207 of the Taxpayer Certainty 3 and Disaster Relief Tax Act (Division EE of Public Law 4 116-260); and 5 (B) Section 3134(e) of the Internal Revenue Code. 6 (18) For taxable years beginning after December 31, 2022, 7 subtract an amount equal to the deduction disallowed under 8 Section 280C(h) of the Internal Revenue Code. 9 (19) Add or subtract any other amounts the taxpayer is: 10 (A) required to add or subtract; or 11 (B) entitled to deduct; 12 under IC 6-3-2. 13 (e) In the case of insurance companies subject to tax under Section 14 831 of the Internal Revenue Code and organized under Indiana law, the 15 same as "taxable income" (as defined in Section 832 of the Internal 16 Revenue Code), adjusted as follows: 17 (1) Subtract income that is exempt from taxation under this article 18 by the Constitution and statutes of the United States. 19 (2) Add an amount equal to any deduction allowed or allowable 20 under Section 170 of the Internal Revenue Code (concerning 21 charitable contributions). 22 (3) Add an amount equal to a deduction allowed or allowable 23 under Section 805 or Section 832(c) of the Internal Revenue Code 24 for taxes based on or measured by income and levied at the state 25 level by any state. 26 (4) Subtract an amount equal to the amount included in the 27 company's taxable income under Section 78 of the Internal 28 Revenue Code (concerning foreign tax credits). 29 (5) Add or subtract the amount necessary to make the adjusted 30 gross income of any taxpayer that owns property for which bonus 31 depreciation was allowed in the current taxable year or in an 32 earlier taxable year equal to the amount of adjusted gross income 33 that would have been computed had an election not been made 34 under Section 168(k) of the Internal Revenue Code to apply bonus 35 depreciation to the property in the year that it was placed in 36 service. 37 (6) Add an amount equal to any deduction allowed under Section 38 172 of the Internal Revenue Code (concerning net operating 39 losses). 40 (7) Add or subtract the amount necessary to make the adjusted 41 gross income of any taxpayer that placed Section 179 property (as 42 defined in Section 179 of the Internal Revenue Code) in service 2023 IN 223—LS 6342/DI 134 17 1 in the current taxable year or in an earlier taxable year equal to 2 the amount of adjusted gross income that would have been 3 computed had an election for federal income tax purposes not 4 been made for the year in which the property was placed in 5 service to take deductions under Section 179 of the Internal 6 Revenue Code in a total amount exceeding the sum of: 7 (A) twenty-five thousand dollars ($25,000) to the extent 8 deductions under Section 179 of the Internal Revenue Code 9 were not elected as provided in clause (B); and 10 (B) for taxable years beginning after December 31, 2017, the 11 deductions elected under Section 179 of the Internal Revenue 12 Code on property acquired in an exchange if: 13 (i) the exchange would have been eligible for 14 nonrecognition of gain or loss under Section 1031 of the 15 Internal Revenue Code in effect on January 1, 2017; 16 (ii) the exchange is not eligible for nonrecognition of gain or 17 loss under Section 1031 of the Internal Revenue Code; and 18 (iii) the taxpayer made an election to take deductions under 19 Section 179 of the Internal Revenue Code with regard to the 20 acquired property in the year that the property was placed 21 into service. 22 The amount of deductions allowable for an item of property 23 under this clause may not exceed the amount of adjusted gross 24 income realized on the property that would have been deferred 25 under the Internal Revenue Code in effect on January 1, 2017. 26 (8) Subtract income that is: 27 (A) exempt from taxation under IC 6-3-2-21.7 (certain income 28 derived from patents); and 29 (B) included in the insurance company's taxable income under 30 the Internal Revenue Code. 31 (9) Add an amount equal to any income not included in gross 32 income as a result of the deferral of income arising from business 33 indebtedness discharged in connection with the reacquisition after 34 December 31, 2008, and before January 1, 2011, of an applicable 35 debt instrument, as provided in Section 108(i) of the Internal 36 Revenue Code. Subtract from the adjusted gross income of any 37 taxpayer that added an amount to adjusted gross income in a 38 previous year the amount necessary to offset the amount included 39 in federal gross income as a result of the deferral of income 40 arising from business indebtedness discharged in connection with 41 the reacquisition after December 31, 2008, and before January 1, 42 2011, of an applicable debt instrument, as provided in Section 2023 IN 223—LS 6342/DI 134 18 1 108(i) of the Internal Revenue Code. 2 (10) Add an amount equal to any exempt insurance income under 3 Section 953(e) of the Internal Revenue Code that is active 4 financing income under Subpart F of Subtitle A, Chapter 1, 5 Subchapter N of the Internal Revenue Code. 6 (11) Add the amount excluded from federal gross income under 7 Section 103 of the Internal Revenue Code for interest received on 8 an obligation of a state other than Indiana, or a political 9 subdivision of such a state, that is acquired by the taxpayer after 10 December 31, 2011. 11 (12) For taxable years beginning after December 25, 2016, add: 12 (A) an amount equal to the amount reported by the taxpayer on 13 IRC 965 Transition Tax Statement, line 1; or 14 (B) if the taxpayer deducted an amount under Section 965(c) 15 of the Internal Revenue Code in determining the taxpayer's 16 taxable income for purposes of the federal income tax, the 17 amount deducted under Section 965(c) of the Internal Revenue 18 Code. 19 (13) Add an amount equal to the deduction that was claimed by 20 the taxpayer for the taxable year under Section 250(a)(1)(B) of the 21 Internal Revenue Code (attributable to global intangible 22 low-taxed income). The taxpayer shall separately specify the 23 amount of the reduction under Section 250(a)(1)(B)(i) of the 24 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the 25 Internal Revenue Code. 26 (14) Subtract any interest expense paid or accrued in the current 27 taxable year but not deducted as a result of the limitation imposed 28 under Section 163(j)(1) of the Internal Revenue Code. Add any 29 interest expense paid or accrued in a previous taxable year but 30 allowed as a deduction under Section 163 of the Internal Revenue 31 Code in the current taxable year. For purposes of this subdivision, 32 an interest expense is considered paid or accrued only in the first 33 taxable year the deduction would have been allowable under 34 Section 163 of the Internal Revenue Code if the limitation under 35 Section 163(j)(1) of the Internal Revenue Code did not exist. 36 (15) Subtract the amount that would have been excluded from 37 gross income but for the enactment of Section 118(b)(2) of the 38 Internal Revenue Code for taxable years ending after December 39 22, 2017. 40 (16) Add an amount equal to the remainder of: 41 (A) the amount allowable as a deduction under Section 274(n) 42 of the Internal Revenue Code; minus 2023 IN 223—LS 6342/DI 134 19 1 (B) the amount otherwise allowable as a deduction under 2 Section 274(n) of the Internal Revenue Code, if Section 3 274(n)(2)(D) of the Internal Revenue Code was not in effect 4 for amounts paid or incurred after December 31, 2020. 5 (17) For taxable years ending after March 12, 2020, subtract an 6 amount equal to the deduction disallowed pursuant to: 7 (A) Section 2301(e) of the CARES Act (Public Law 116-136), 8 as modified by Sections 206 and 207 of the Taxpayer Certainty 9 and Disaster Relief Tax Act (Division EE of Public Law 10 116-260); and 11 (B) Section 3134(e) of the Internal Revenue Code. 12 (18) For taxable years beginning after December 31, 2022, 13 subtract an amount equal to the deduction disallowed under 14 Section 280C(h) of the Internal Revenue Code. 15 (19) Add or subtract any other amounts the taxpayer is: 16 (A) required to add or subtract; or 17 (B) entitled to deduct; 18 under IC 6-3-2. 19 (f) In the case of trusts and estates, "taxable income" (as defined for 20 trusts and estates in Section 641(b) of the Internal Revenue Code) 21 adjusted as follows: 22 (1) Subtract income that is exempt from taxation under this article 23 by the Constitution and statutes of the United States. 24 (2) Subtract an amount equal to the amount of a September 11 25 terrorist attack settlement payment included in the federal 26 adjusted gross income of the estate of a victim of the September 27 11 terrorist attack or a trust to the extent the trust benefits a victim 28 of the September 11 terrorist attack. 29 (3) Add or subtract the amount necessary to make the adjusted 30 gross income of any taxpayer that owns property for which bonus 31 depreciation was allowed in the current taxable year or in an 32 earlier taxable year equal to the amount of adjusted gross income 33 that would have been computed had an election not been made 34 under Section 168(k) of the Internal Revenue Code to apply bonus 35 depreciation to the property in the year that it was placed in 36 service. 37 (4) Add an amount equal to any deduction allowed under Section 38 172 of the Internal Revenue Code (concerning net operating 39 losses). 40 (5) Add or subtract the amount necessary to make the adjusted 41 gross income of any taxpayer that placed Section 179 property (as 42 defined in Section 179 of the Internal Revenue Code) in service 2023 IN 223—LS 6342/DI 134 20 1 in the current taxable year or in an earlier taxable year equal to 2 the amount of adjusted gross income that would have been 3 computed had an election for federal income tax purposes not 4 been made for the year in which the property was placed in 5 service to take deductions under Section 179 of the Internal 6 Revenue Code in a total amount exceeding the sum of: 7 (A) twenty-five thousand dollars ($25,000) to the extent 8 deductions under Section 179 of the Internal Revenue Code 9 were not elected as provided in clause (B); and 10 (B) for taxable years beginning after December 31, 2017, the 11 deductions elected under Section 179 of the Internal Revenue 12 Code on property acquired in an exchange if: 13 (i) the exchange would have been eligible for 14 nonrecognition of gain or loss under Section 1031 of the 15 Internal Revenue Code in effect on January 1, 2017; 16 (ii) the exchange is not eligible for nonrecognition of gain or 17 loss under Section 1031 of the Internal Revenue Code; and 18 (iii) the taxpayer made an election to take deductions under 19 Section 179 of the Internal Revenue Code with regard to the 20 acquired property in the year that the property was placed 21 into service. 22 The amount of deductions allowable for an item of property 23 under this clause may not exceed the amount of adjusted gross 24 income realized on the property that would have been deferred 25 under the Internal Revenue Code in effect on January 1, 2017. 26 (6) Subtract income that is: 27 (A) exempt from taxation under IC 6-3-2-21.7 (certain income 28 derived from patents); and 29 (B) included in the taxpayer's taxable income under the 30 Internal Revenue Code. 31 (7) Add an amount equal to any income not included in gross 32 income as a result of the deferral of income arising from business 33 indebtedness discharged in connection with the reacquisition after 34 December 31, 2008, and before January 1, 2011, of an applicable 35 debt instrument, as provided in Section 108(i) of the Internal 36 Revenue Code. Subtract from the adjusted gross income of any 37 taxpayer that added an amount to adjusted gross income in a 38 previous year the amount necessary to offset the amount included 39 in federal gross income as a result of the deferral of income 40 arising from business indebtedness discharged in connection with 41 the reacquisition after December 31, 2008, and before January 1, 42 2011, of an applicable debt instrument, as provided in Section 2023 IN 223—LS 6342/DI 134 21 1 108(i) of the Internal Revenue Code. 2 (8) Add the amount excluded from federal gross income under 3 Section 103 of the Internal Revenue Code for interest received on 4 an obligation of a state other than Indiana, or a political 5 subdivision of such a state, that is acquired by the taxpayer after 6 December 31, 2011. 7 (9) For taxable years beginning after December 25, 2016, add an 8 amount equal to: 9 (A) the amount reported by the taxpayer on IRC 965 10 Transition Tax Statement, line 1; 11 (B) if the taxpayer deducted an amount under Section 965(c) 12 of the Internal Revenue Code in determining the taxpayer's 13 taxable income for purposes of the federal income tax, the 14 amount deducted under Section 965(c) of the Internal Revenue 15 Code; and 16 (C) with regard to any amounts of income under Section 965 17 of the Internal Revenue Code distributed by the taxpayer, the 18 deduction under Section 965(c) of the Internal Revenue Code 19 attributable to such distributed amounts and not reported to the 20 beneficiary. 21 For purposes of this article, the amount required to be added back 22 under clause (B) is not considered to be distributed or 23 distributable to a beneficiary of the estate or trust for purposes of 24 Sections 651 and 661 of the Internal Revenue Code. 25 (10) Subtract any interest expense paid or accrued in the current 26 taxable year but not deducted as a result of the limitation imposed 27 under Section 163(j)(1) of the Internal Revenue Code. Add any 28 interest expense paid or accrued in a previous taxable year but 29 allowed as a deduction under Section 163 of the Internal Revenue 30 Code in the current taxable year. For purposes of this subdivision, 31 an interest expense is considered paid or accrued only in the first 32 taxable year the deduction would have been allowable under 33 Section 163 of the Internal Revenue Code if the limitation under 34 Section 163(j)(1) of the Internal Revenue Code did not exist. 35 (11) Add an amount equal to the deduction for qualified business 36 income that was claimed by the taxpayer for the taxable year 37 under Section 199A of the Internal Revenue Code. 38 (12) Subtract the amount that would have been excluded from 39 gross income but for the enactment of Section 118(b)(2) of the 40 Internal Revenue Code for taxable years ending after December 41 22, 2017. 42 (13) Add an amount equal to the remainder of: 2023 IN 223—LS 6342/DI 134 22 1 (A) the amount allowable as a deduction under Section 274(n) 2 of the Internal Revenue Code; minus 3 (B) the amount otherwise allowable as a deduction under 4 Section 274(n) of the Internal Revenue Code, if Section 5 274(n)(2)(D) of the Internal Revenue Code was not in effect 6 for amounts paid or incurred after December 31, 2020. 7 (14) For taxable years beginning after December 31, 2017, and 8 before January 1, 2021, add an amount equal to the excess 9 business loss of the taxpayer as defined in Section 461(l)(3) of the 10 Internal Revenue Code. In addition: 11 (A) If a taxpayer has an excess business loss under this 12 subdivision and also has modifications under subdivisions (3) 13 and (5) for property placed in service during the taxable year, 14 the taxpayer shall treat a portion of the taxable year 15 modifications for that property as occurring in the taxable year 16 the property is placed in service and a portion of the 17 modifications as occurring in the immediately following 18 taxable year. 19 (B) The portion of the modifications under subdivisions (3) 20 and (5) for property placed in service during the taxable year 21 treated as occurring in the taxable year in which the property 22 is placed in service equals: 23 (i) the modification for the property otherwise determined 24 under this section; minus 25 (ii) the excess business loss disallowed under this 26 subdivision; 27 but not less than zero (0). 28 (C) The portion of the modifications under subdivisions (3) 29 and (5) for property placed in service during the taxable year 30 treated as occurring in the taxable year immediately following 31 the taxable year in which the property is placed in service 32 equals the modification for the property otherwise determined 33 under this section minus the amount in clause (B). 34 (D) Any reallocation of modifications between taxable years 35 under clauses (B) and (C) shall be first allocated to the 36 modification under subdivision (3), then to the modification 37 under subdivision (5). 38 (15) For taxable years ending after March 12, 2020, subtract an 39 amount equal to the deduction disallowed pursuant to: 40 (A) Section 2301(e) of the CARES Act (Public Law 116-136), 41 as modified by Sections 206 and 207 of the Taxpayer Certainty 42 and Disaster Relief Tax Act (Division EE of Public Law 2023 IN 223—LS 6342/DI 134 23 1 116-260); and 2 (B) Section 3134(e) of the Internal Revenue Code. 3 (16) For taxable years beginning after December 31, 2022, 4 subtract an amount equal to the deduction disallowed under 5 Section 280C(h) of the Internal Revenue Code. 6 (17) Add or subtract any other amounts the taxpayer is: 7 (A) required to add or subtract; or 8 (B) entitled to deduct; 9 under IC 6-3-2. 10 (g) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17) may not 11 be construed to require an add back or allow a deduction or exemption 12 more than once for a particular add back, deduction, or exemption. 13 (h) For taxable years beginning after December 25, 2016, if: 14 (1) a taxpayer is a shareholder, either directly or indirectly, in a 15 corporation that is an E&P deficit foreign corporation as defined 16 in Section 965(b)(3)(B) of the Internal Revenue Code, and the 17 earnings and profit deficit, or a portion of the earnings and profit 18 deficit, of the E&P deficit foreign corporation is permitted to 19 reduce the federal adjusted gross income or federal taxable 20 income of the taxpayer, the deficit, or the portion of the deficit, 21 shall also reduce the amount taxable under this section to the 22 extent permitted under the Internal Revenue Code, however, in no 23 case shall this permit a reduction in the amount taxable under 24 Section 965 of the Internal Revenue Code for purposes of this 25 section to be less than zero (0); and 26 (2) the Internal Revenue Service issues guidance that such an 27 income or deduction is not reported directly on a federal tax 28 return or is to be reported in a manner different than specified in 29 this section, this section shall be construed as if federal adjusted 30 gross income or federal taxable income included the income or 31 deduction. 32 (i) If a partner is required to include an item of income, a deduction, 33 or another tax attribute in the partner's adjusted gross income tax return 34 pursuant to IC 6-3-4.5, such item shall be considered to be includible 35 in the partner's federal adjusted gross income or federal taxable 36 income, regardless of whether such item is actually required to be 37 reported by the partner for federal income tax purposes. For purposes 38 of this subsection: 39 (1) items for which a valid election is made under IC 6-3-4.5-6, 40 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included 41 in the partner's adjusted gross income or taxable income; and 42 (2) items for which the partnership did not make an election under 2023 IN 223—LS 6342/DI 134 24 1 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the 2 partnership is required to remit tax pursuant to IC 6-3-4.5-18, 3 shall be included in the partner's adjusted gross income or taxable 4 income. 2023 IN 223—LS 6342/DI 134