Introduced Version
SENATE BILL No. 319
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3-1-3.5; IC 6-3-2-27.
Synopsis: Dependent child exemptions. Provides that a fetus is
considered a dependent child for purposes of the dependent child state
adjusted gross income exemptions.
Effective: January 1, 2023 (retroactive).
Zay
January 12, 2023, read first time and referred to Committee on Tax and Fiscal Policy.
2023 IN 319—LS 6455/DI 125 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. 319
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, 2023 (RETROACTIVE)]: Sec. 3.5. When used in this
4 article, the term "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 319—LS 6455/DI 125 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), except
4 that a fetus (as defined in IC 16-18-2-128.7) is considered
5 a dependent child for purposes of this exemption if the
6 taxpayer provides the information required under
7 IC 6-3-2-27;
8 (B) each additional amount allowable under Section 63(f) of
9 the Internal Revenue Code; and
10 (C) the spouse of the taxpayer if a separate return is made by
11 the taxpayer and if the spouse, for the calendar year in which
12 the taxable year of the taxpayer begins, has no gross income
13 and is not the dependent of another taxpayer.
14 (5) Subtract each of the following:
15 (A) One thousand five hundred dollars ($1,500) for each of the
16 exemptions allowed under Section 151(c)(1)(B) of the Internal
17 Revenue Code (as effective January 1, 2004), except that a
18 fetus (as defined in IC 16-18-2-128.7) is considered a
19 dependent child for purposes of this exemption if the
20 taxpayer provides the information required under
21 IC 6-3-2-27.
22 (B) One thousand five hundred dollars ($1,500) for each
23 exemption allowed under Section 151(c) of the Internal
24 Revenue Code (as effective January 1, 2017) for an individual:
25 (i) who is less than nineteen (19) years of age or is a
26 full-time student who is less than twenty-four (24) years of
27 age;
28 (ii) for whom the taxpayer is the legal guardian; and
29 (iii) for whom the taxpayer does not claim an exemption
30 under clause (A).
31 (C) Five hundred dollars ($500) for each additional amount
32 allowable under Section 63(f)(1) of the Internal Revenue Code
33 if the federal adjusted gross income of the taxpayer, or the
34 taxpayer and the taxpayer's spouse in the case of a joint return,
35 is less than forty thousand dollars ($40,000). In the case of a
36 married individual filing a separate return, the qualifying
37 income amount in this clause is equal to twenty thousand
38 dollars ($20,000).
39 (D) Three thousand dollars ($3,000) for each exemption
40 allowed under Section 151(c) of the Internal Revenue Code (as
41 effective January 1, 2017) for an individual who is:
42 (i) an adopted child of the taxpayer; and
2023 IN 319—LS 6455/DI 125 3
1 (ii) less than nineteen (19) years of age or is a full-time
2 student who is less than twenty-four (24) years of age.
3 This amount is in addition to any amount subtracted under
4 clause (A) or (B).
5 This amount is in addition to the amount subtracted under
6 subdivision (4).
7 (6) Subtract any amounts included in federal adjusted gross
8 income under Section 111 of the Internal Revenue Code as a
9 recovery of items previously deducted as an itemized deduction
10 from adjusted gross income.
11 (7) Subtract any amounts included in federal adjusted gross
12 income under the Internal Revenue Code which amounts were
13 received by the individual as supplemental railroad retirement
14 annuities under 45 U.S.C. 231 and which are not deductible under
15 subdivision (1).
16 (8) Subtract an amount equal to the amount of federal Social
17 Security and Railroad Retirement benefits included in a taxpayer's
18 federal gross income by Section 86 of the Internal Revenue Code.
19 (9) In the case of a nonresident taxpayer or a resident taxpayer
20 residing in Indiana for a period of less than the taxpayer's entire
21 taxable year, the total amount of the deductions allowed pursuant
22 to subdivisions (3), (4), and (5) shall be reduced to an amount
23 which bears the same ratio to the total as the taxpayer's income
24 taxable in Indiana bears to the taxpayer's total income.
25 (10) In the case of an individual who is a recipient of assistance
26 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
27 subtract an amount equal to that portion of the individual's
28 adjusted gross income with respect to which the individual is not
29 allowed under federal law to retain an amount to pay state and
30 local income taxes.
31 (11) In the case of an eligible individual, subtract the amount of
32 a Holocaust victim's settlement payment included in the
33 individual's federal adjusted gross income.
34 (12) Subtract an amount equal to the portion of any premiums
35 paid during the taxable year by the taxpayer for a qualified long
36 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
37 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
38 file a joint income tax return or the taxpayer is otherwise entitled
39 to a deduction under this subdivision for the taxpayer's spouse, or
40 both.
41 (13) Subtract an amount equal to the lesser of:
42 (A) two thousand five hundred dollars ($2,500), or one
2023 IN 319—LS 6455/DI 125 4
1 thousand two hundred fifty dollars ($1,250) in the case of a
2 married individual filing a separate return; or
3 (B) the amount of property taxes that are paid during the
4 taxable year in Indiana by the individual on the individual's
5 principal place of residence.
6 (14) Subtract an amount equal to the amount of a September 11
7 terrorist attack settlement payment included in the individual's
8 federal adjusted gross income.
9 (15) Add or subtract the amount necessary to make the adjusted
10 gross income of any taxpayer that owns property for which bonus
11 depreciation was allowed in the current taxable year or in an
12 earlier taxable year equal to the amount of adjusted gross income
13 that would have been computed had an election not been made
14 under Section 168(k) of the Internal Revenue Code to apply bonus
15 depreciation to the property in the year that it was placed in
16 service.
17 (16) Add an amount equal to any deduction allowed under
18 Section 172 of the Internal Revenue Code (concerning net
19 operating losses).
20 (17) Add or subtract the amount necessary to make the adjusted
21 gross income of any taxpayer that placed Section 179 property (as
22 defined in Section 179 of the Internal Revenue Code) in service
23 in the current taxable year or in an earlier taxable year equal to
24 the amount of adjusted gross income that would have been
25 computed had an election for federal income tax purposes not
26 been made for the year in which the property was placed in
27 service to take deductions under Section 179 of the Internal
28 Revenue Code in a total amount exceeding the sum of:
29 (A) twenty-five thousand dollars ($25,000) to the extent
30 deductions under Section 179 of the Internal Revenue Code
31 were not elected as provided in clause (B); and
32 (B) for taxable years beginning after December 31, 2017, the
33 deductions elected under Section 179 of the Internal Revenue
34 Code on property acquired in an exchange if:
35 (i) the exchange would have been eligible for
36 nonrecognition of gain or loss under Section 1031 of the
37 Internal Revenue Code in effect on January 1, 2017;
38 (ii) the exchange is not eligible for nonrecognition of gain or
39 loss under Section 1031 of the Internal Revenue Code; and
40 (iii) the taxpayer made an election to take deductions under
41 Section 179 of the Internal Revenue Code with regard to the
42 acquired property in the year that the property was placed
2023 IN 319—LS 6455/DI 125 5
1 into service.
2 The amount of deductions allowable for an item of property
3 under this clause may not exceed the amount of adjusted gross
4 income realized on the property that would have been deferred
5 under the Internal Revenue Code in effect on January 1, 2017.
6 (18) Subtract an amount equal to the amount of the taxpayer's
7 qualified military income that was not excluded from the
8 taxpayer's gross income for federal income tax purposes under
9 Section 112 of the Internal Revenue Code.
10 (19) Subtract income that is:
11 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
12 derived from patents); and
13 (B) included in the individual's federal adjusted gross income
14 under the Internal Revenue Code.
15 (20) Add an amount equal to any income not included in gross
16 income as a result of the deferral of income arising from business
17 indebtedness discharged in connection with the reacquisition after
18 December 31, 2008, and before January 1, 2011, of an applicable
19 debt instrument, as provided in Section 108(i) of the Internal
20 Revenue Code. Subtract the amount necessary from the adjusted
21 gross income of any taxpayer that added an amount to adjusted
22 gross income in a previous year to offset the amount included in
23 federal gross income as a result of the deferral of income arising
24 from business indebtedness discharged in connection with the
25 reacquisition after December 31, 2008, and before January 1,
26 2011, of an applicable debt instrument, as provided in Section
27 108(i) of the Internal Revenue Code.
28 (21) Add the amount excluded from federal gross income under
29 Section 103 of the Internal Revenue Code for interest received on
30 an obligation of a state other than Indiana, or a political
31 subdivision of such a state, that is acquired by the taxpayer after
32 December 31, 2011.
33 (22) Subtract an amount as described in Section 1341(a)(2) of the
34 Internal Revenue Code to the extent, if any, that the amount was
35 previously included in the taxpayer's adjusted gross income for a
36 prior taxable year.
37 (23) For taxable years beginning after December 25, 2016, add an
38 amount equal to the deduction for deferred foreign income that
39 was claimed by the taxpayer for the taxable year under Section
40 965(c) of the Internal Revenue Code.
41 (24) Subtract any interest expense paid or accrued in the current
42 taxable year but not deducted as a result of the limitation imposed
2023 IN 319—LS 6455/DI 125 6
1 under Section 163(j)(1) of the Internal Revenue Code. Add any
2 interest expense paid or accrued in a previous taxable year but
3 allowed as a deduction under Section 163 of the Internal Revenue
4 Code in the current taxable year. For purposes of this subdivision,
5 an interest expense is considered paid or accrued only in the first
6 taxable year the deduction would have been allowable under
7 Section 163 of the Internal Revenue Code if the limitation under
8 Section 163(j)(1) of the Internal Revenue Code did not exist.
9 (25) Subtract the amount that would have been excluded from
10 gross income but for the enactment of Section 118(b)(2) of the
11 Internal Revenue Code for taxable years ending after December
12 22, 2017.
13 (26) For taxable years beginning after December 31, 2019, and
14 before January 1, 2021, add an amount of the deduction claimed
15 under Section 62(a)(22) of the Internal Revenue Code.
16 (27) For taxable years beginning after December 31, 2019, for
17 payments made by an employer under an education assistance
18 program after March 27, 2020:
19 (A) add the amount of payments by an employer that are
20 excluded from the taxpayer's federal gross income under
21 Section 127(c)(1)(B) of the Internal Revenue Code; and
22 (B) deduct the interest allowable under Section 221 of the
23 Internal Revenue Code, if the disallowance under Section
24 221(e)(1) of the Internal Revenue Code did not apply to the
25 payments described in clause (A). For purposes of applying
26 Section 221(b) of the Internal Revenue Code to the amount
27 allowable under this clause, the amount under clause (A) shall
28 not be added to adjusted gross income.
29 (28) 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 (29) For taxable years beginning after December 31, 2017, and
37 before January 1, 2021, add an amount equal to the excess
38 business loss of the taxpayer as defined in Section 461(l)(3) of the
39 Internal Revenue Code. In addition:
40 (A) If a taxpayer has an excess business loss under this
41 subdivision and also has modifications under subdivisions (15)
42 and (17) for property placed in service during the taxable year,
2023 IN 319—LS 6455/DI 125 7
1 the taxpayer shall treat a portion of the taxable year
2 modifications for that property as occurring in the taxable year
3 the property is placed in service and a portion of the
4 modifications as occurring in the immediately following
5 taxable year.
6 (B) The portion of the modifications under subdivisions (15)
7 and (17) for property placed in service during the taxable year
8 treated as occurring in the taxable year in which the property
9 is placed in service equals:
10 (i) the modification for the property otherwise determined
11 under this section; minus
12 (ii) the excess business loss disallowed under this
13 subdivision;
14 but not less than zero (0).
15 (C) The portion of the modifications under subdivisions (15)
16 and (17) for property placed in service during the taxable year
17 treated as occurring in the taxable year immediately following
18 the taxable year in which the property is placed in service
19 equals the modification for the property otherwise determined
20 under this section minus the amount in clause (B).
21 (D) Any reallocation of modifications between taxable years
22 under clauses (B) and (C) shall be first allocated to the
23 modification under subdivision (15), then to the modification
24 under subdivision (17).
25 (30) Add an amount equal to the amount excluded from federal
26 gross income under Section 108(f)(5) of the Internal Revenue
27 Code. For purposes of this subdivision:
28 (A) if an amount excluded under Section 108(f)(5) of the
29 Internal Revenue Code would be excludible under Section
30 108(a)(1)(B) of the Internal Revenue Code, the exclusion
31 under Section 108(a)(1)(B) of the Internal Revenue Code shall
32 take precedence; and
33 (B) if an amount would have been excludible under Section
34 108(f)(5) of the Internal Revenue Code as in effect on January
35 1, 2020, the amount is not required to be added back under this
36 subdivision.
37 (31) For taxable years ending after March 12, 2020, subtract an
38 amount equal to the deduction disallowed pursuant to:
39 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
40 as modified by Sections 206 and 207 of the Taxpayer Certainty
41 and Disaster Relief Tax Act (Division EE of Public Law
42 116-260); and
2023 IN 319—LS 6455/DI 125 8
1 (B) Section 3134(e) of the Internal Revenue Code.
2 (32) Subtract the amount of an annual grant amount distributed to
3 a taxpayer's Indiana education scholarship account under
4 IC 20-51.4-4-2 that is used for a qualified expense (as defined in
5 IC 20-51.4-2-9) or to an Indiana enrichment scholarship account
6 under IC 20-52 that is used for qualified expenses (as defined in
7 IC 20-52-2-6), to the extent the distribution used for the qualified
8 expense is included in the taxpayer's federal adjusted gross
9 income under the Internal Revenue Code.
10 (33) For taxable years beginning after December 31, 2019, and
11 before January 1, 2021, add an amount equal to the amount of
12 unemployment compensation excluded from federal gross income
13 under Section 85(c) of the Internal Revenue Code.
14 (34) For taxable years beginning after December 31, 2022,
15 subtract an amount equal to the deduction disallowed under
16 Section 280C(h) of the Internal Revenue Code.
17 (35) Subtract any other amounts the taxpayer is entitled to deduct
18 under IC 6-3-2.
19 (b) In the case of corporations, the same as "taxable income" (as
20 defined in Section 63 of the Internal Revenue Code) adjusted as
21 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) Add an amount equal to any deduction or deductions allowed
25 or allowable pursuant to Section 170 of the Internal Revenue
26 Code (concerning charitable contributions).
27 (3) Except as provided in subsection (c), add an amount equal to
28 any deduction or deductions allowed or allowable pursuant to
29 Section 63 of the Internal Revenue Code for taxes based on or
30 measured by income and levied at the state level by any state of
31 the United States.
32 (4) Subtract an amount equal to the amount included in the
33 corporation's taxable income under Section 78 of the Internal
34 Revenue Code (concerning foreign tax credits).
35 (5) Add or subtract the amount necessary to make the adjusted
36 gross income of any taxpayer that owns property for which bonus
37 depreciation was allowed in the current taxable year or in an
38 earlier taxable year equal to the amount of adjusted gross income
39 that would have been computed had an election not been made
40 under Section 168(k) of the Internal Revenue Code to apply bonus
41 depreciation to the property in the year that it was placed in
42 service.
2023 IN 319—LS 6455/DI 125 9
1 (6) Add an amount equal to any deduction allowed under Section
2 172 of the Internal Revenue Code (concerning net operating
3 losses).
4 (7) Add or subtract the amount necessary to make the adjusted
5 gross income of any taxpayer that placed Section 179 property (as
6 defined in Section 179 of the Internal Revenue Code) in service
7 in the current taxable year or in an earlier taxable year equal to
8 the amount of adjusted gross income that would have been
9 computed had an election for federal income tax purposes not
10 been made for the year in which the property was placed in
11 service to take deductions under Section 179 of the Internal
12 Revenue Code in a total amount exceeding the sum of:
13 (A) twenty-five thousand dollars ($25,000) to the extent
14 deductions under Section 179 of the Internal Revenue Code
15 were not elected as provided in clause (B); and
16 (B) for taxable years beginning after December 31, 2017, the
17 deductions elected under Section 179 of the Internal Revenue
18 Code on property acquired in an exchange if:
19 (i) the exchange would have been eligible for
20 nonrecognition of gain or loss under Section 1031 of the
21 Internal Revenue Code in effect on January 1, 2017;
22 (ii) the exchange is not eligible for nonrecognition of gain or
23 loss under Section 1031 of the Internal Revenue Code; and
24 (iii) the taxpayer made an election to take deductions under
25 Section 179 of the Internal Revenue Code with regard to the
26 acquired property in the year that the property was placed
27 into service.
28 The amount of deductions allowable for an item of property
29 under this clause may not exceed the amount of adjusted gross
30 income realized on the property that would have been deferred
31 under the Internal Revenue Code in effect on January 1, 2017.
32 (8) Add to the extent required by IC 6-3-2-20:
33 (A) the amount of intangible expenses (as defined in
34 IC 6-3-2-20) for the taxable year that reduced the corporation's
35 taxable income (as defined in Section 63 of the Internal
36 Revenue Code) for federal income tax purposes; and
37 (B) any directly related interest expenses (as defined in
38 IC 6-3-2-20) that reduced the corporation's adjusted gross
39 income (determined without regard to this subdivision). For
40 purposes of this clause, any directly related interest expense
41 that constitutes business interest within the meaning of Section
42 163(j) of the Internal Revenue Code shall be considered to
2023 IN 319—LS 6455/DI 125 10
1 have reduced the taxpayer's federal taxable income only in the
2 first taxable year in which the deduction otherwise would have
3 been allowable under Section 163 of the Internal Revenue
4 Code if the limitation under Section 163(j)(1) of the Internal
5 Revenue Code did not exist.
6 (9) Add an amount equal to any deduction for dividends paid (as
7 defined in Section 561 of the Internal Revenue Code) to
8 shareholders of a captive real estate investment trust (as defined
9 in section 34.5 of this chapter).
10 (10) Subtract income that is:
11 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
12 derived from patents); and
13 (B) included in the corporation's taxable income under the
14 Internal Revenue Code.
15 (11) Add an amount equal to any income not included in gross
16 income as a result of the deferral of income arising from business
17 indebtedness discharged in connection with the reacquisition after
18 December 31, 2008, and before January 1, 2011, of an applicable
19 debt instrument, as provided in Section 108(i) of the Internal
20 Revenue Code. Subtract from the adjusted gross income of any
21 taxpayer that added an amount to adjusted gross income in a
22 previous year the amount necessary to offset the amount included
23 in federal gross income as a result of the deferral of income
24 arising from business indebtedness discharged in connection with
25 the reacquisition after December 31, 2008, and before January 1,
26 2011, of an applicable debt instrument, as provided in Section
27 108(i) of the Internal Revenue Code.
28 (12) Add the amount excluded from federal gross income under
29 Section 103 of the Internal Revenue Code for interest received on
30 an obligation of a state other than Indiana, or a political
31 subdivision of such a state, that is acquired by the taxpayer after
32 December 31, 2011.
33 (13) For taxable years beginning after December 25, 2016:
34 (A) for a corporation other than a real estate investment trust,
35 add:
36 (i) an amount equal to the amount reported by the taxpayer
37 on IRC 965 Transition Tax Statement, line 1; or
38 (ii) if the taxpayer deducted an amount under Section 965(c)
39 of the Internal Revenue Code in determining the taxpayer's
40 taxable income for purposes of the federal income tax, the
41 amount deducted under Section 965(c) of the Internal
42 Revenue Code; and
2023 IN 319—LS 6455/DI 125 11
1 (B) for a real estate investment trust, add an amount equal to
2 the deduction for deferred foreign income that was claimed by
3 the taxpayer for the taxable year under Section 965(c) of the
4 Internal Revenue Code, but only to the extent that the taxpayer
5 included income pursuant to Section 965 of the Internal
6 Revenue Code in its taxable income for federal income tax
7 purposes or is required to add back dividends paid under
8 subdivision (9).
9 (14) Add an amount equal to the deduction that was claimed by
10 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
11 Internal Revenue Code (attributable to global intangible
12 low-taxed income). The taxpayer shall separately specify the
13 amount of the reduction under Section 250(a)(1)(B)(i) of the
14 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
15 Internal Revenue Code.
16 (15) Subtract any interest expense paid or accrued in the current
17 taxable year but not deducted as a result of the limitation imposed
18 under Section 163(j)(1) of the Internal Revenue Code. Add any
19 interest expense paid or accrued in a previous taxable year but
20 allowed as a deduction under Section 163 of the Internal Revenue
21 Code in the current taxable year. For purposes of this subdivision,
22 an interest expense is considered paid or accrued only in the first
23 taxable year the deduction would have been allowable under
24 Section 163 of the Internal Revenue Code if the limitation under
25 Section 163(j)(1) of the Internal Revenue Code did not exist.
26 (16) Subtract the amount that would have been excluded from
27 gross income but for the enactment of Section 118(b)(2) of the
28 Internal Revenue Code for taxable years ending after December
29 22, 2017.
30 (17) Add an amount equal to the remainder of:
31 (A) the amount allowable as a deduction under Section 274(n)
32 of the Internal Revenue Code; minus
33 (B) the amount otherwise allowable as a deduction under
34 Section 274(n) of the Internal Revenue Code, if Section
35 274(n)(2)(D) of the Internal Revenue Code was not in effect
36 for amounts paid or incurred after December 31, 2020.
37 (18) For taxable years ending after March 12, 2020, subtract an
38 amount equal to the deduction disallowed pursuant to:
39 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
40 as modified by Sections 206 and 207 of the Taxpayer Certainty
41 and Disaster Relief Tax Act (Division EE of Public Law
42 116-260); and
2023 IN 319—LS 6455/DI 125 12
1 (B) Section 3134(e) of the Internal Revenue Code.
2 (19) For taxable years beginning after December 31, 2022,
3 subtract an amount equal to the deduction disallowed under
4 Section 280C(h) of the Internal Revenue Code.
5 (20) Add or subtract any other amounts the taxpayer is:
6 (A) required to add or subtract; or
7 (B) entitled to deduct;
8 under IC 6-3-2.
9 (c) The following apply to taxable years beginning after December
10 31, 2018, for purposes of the add back of any deduction allowed on the
11 taxpayer's federal income tax return for wagering taxes, as provided in
12 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
13 the taxpayer is a corporation:
14 (1) For taxable years beginning after December 31, 2018, and
15 before January 1, 2020, a taxpayer is required to add back under
16 this section eighty-seven and five-tenths percent (87.5%) of any
17 deduction allowed on the taxpayer's federal income tax return for
18 wagering taxes.
19 (2) For taxable years beginning after December 31, 2019, and
20 before January 1, 2021, a taxpayer is required to add back under
21 this section seventy-five percent (75%) of any deduction allowed
22 on the taxpayer's federal income tax return for wagering taxes.
23 (3) For taxable years beginning after December 31, 2020, and
24 before January 1, 2022, a taxpayer is required to add back under
25 this section sixty-two and five-tenths percent (62.5%) of any
26 deduction allowed on the taxpayer's federal income tax return for
27 wagering taxes.
28 (4) For taxable years beginning after December 31, 2021, and
29 before January 1, 2023, a taxpayer is required to add back under
30 this section fifty percent (50%) of any deduction allowed on the
31 taxpayer's federal income tax return for wagering taxes.
32 (5) For taxable years beginning after December 31, 2022, and
33 before January 1, 2024, a taxpayer is required to add back under
34 this section thirty-seven and five-tenths percent (37.5%) of any
35 deduction allowed on the taxpayer's federal income tax return for
36 wagering taxes.
37 (6) For taxable years beginning after December 31, 2023, and
38 before January 1, 2025, a taxpayer is required to add back under
39 this section twenty-five percent (25%) of any deduction allowed
40 on the taxpayer's federal income tax return for wagering taxes.
41 (7) For taxable years beginning after December 31, 2024, and
42 before January 1, 2026, a taxpayer is required to add back under
2023 IN 319—LS 6455/DI 125 13
1 this section twelve and five-tenths percent (12.5%) of any
2 deduction allowed on the taxpayer's federal income tax return for
3 wagering taxes.
4 (8) For taxable years beginning after December 31, 2025, a
5 taxpayer is not required to add back under this section any amount
6 of a deduction allowed on the taxpayer's federal income tax return
7 for wagering taxes.
8 (d) In the case of life insurance companies (as defined in Section
9 816(a) of the Internal Revenue Code) that are organized under Indiana
10 law, the same as "life insurance company taxable income" (as defined
11 in Section 801 of the Internal Revenue Code), adjusted as follows:
12 (1) Subtract income that is exempt from taxation under this article
13 by the Constitution and statutes of the United States.
14 (2) Add an amount equal to any deduction allowed or allowable
15 under Section 170 of the Internal Revenue Code (concerning
16 charitable contributions).
17 (3) Add an amount equal to a deduction allowed or allowable
18 under Section 805 or Section 832(c) of the Internal Revenue Code
19 for taxes based on or measured by income and levied at the state
20 level by any state.
21 (4) Subtract an amount equal to the amount included in the
22 company's taxable income under Section 78 of the Internal
23 Revenue Code (concerning foreign tax credits).
24 (5) Add or subtract the amount necessary to make the adjusted
25 gross income of any taxpayer that owns property for which bonus
26 depreciation was allowed in the current taxable year or in an
27 earlier taxable year equal to the amount of adjusted gross income
28 that would have been computed had an election not been made
29 under Section 168(k) of the Internal Revenue Code to apply bonus
30 depreciation to the property in the year that it was placed in
31 service.
32 (6) Add an amount equal to any deduction allowed under Section
33 172 of the Internal Revenue Code (concerning net operating
34 losses).
35 (7) Add or subtract the amount necessary to make the adjusted
36 gross income of any taxpayer that placed Section 179 property (as
37 defined in Section 179 of the Internal Revenue Code) in service
38 in the current taxable year or in an earlier taxable year equal to
39 the amount of adjusted gross income that would have been
40 computed had an election for federal income tax purposes not
41 been made for the year in which the property was placed in
42 service to take deductions under Section 179 of the Internal
2023 IN 319—LS 6455/DI 125 14
1 Revenue Code in a total amount exceeding the sum of:
2 (A) twenty-five thousand dollars ($25,000) to the extent
3 deductions under Section 179 of the Internal Revenue Code
4 were not elected as provided in clause (B); and
5 (B) for taxable years beginning after December 31, 2017, the
6 deductions elected under Section 179 of the Internal Revenue
7 Code on property acquired in an exchange if:
8 (i) the exchange would have been eligible for
9 nonrecognition of gain or loss under Section 1031 of the
10 Internal Revenue Code in effect on January 1, 2017;
11 (ii) the exchange is not eligible for nonrecognition of gain or
12 loss under Section 1031 of the Internal Revenue Code; and
13 (iii) the taxpayer made an election to take deductions under
14 Section 179 of the Internal Revenue Code with regard to the
15 acquired property in the year that the property was placed
16 into service.
17 The amount of deductions allowable for an item of property
18 under this clause may not exceed the amount of adjusted gross
19 income realized on the property that would have been deferred
20 under the Internal Revenue Code in effect on January 1, 2017.
21 (8) Subtract income that is:
22 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
23 derived from patents); and
24 (B) included in the insurance company's taxable income under
25 the Internal Revenue Code.
26 (9) Add an amount equal to any income not included in gross
27 income as a result of the deferral of income arising from business
28 indebtedness discharged in connection with the reacquisition after
29 December 31, 2008, and before January 1, 2011, of an applicable
30 debt instrument, as provided in Section 108(i) of the Internal
31 Revenue Code. Subtract from the adjusted gross income of any
32 taxpayer that added an amount to adjusted gross income in a
33 previous year the amount necessary to offset the amount included
34 in federal gross income as a result of the deferral of income
35 arising from business indebtedness discharged in connection with
36 the reacquisition after December 31, 2008, and before January 1,
37 2011, of an applicable debt instrument, as provided in Section
38 108(i) of the Internal Revenue Code.
39 (10) Add an amount equal to any exempt insurance income under
40 Section 953(e) of the Internal Revenue Code that is active
41 financing income under Subpart F of Subtitle A, Chapter 1,
42 Subchapter N of the Internal Revenue Code.
2023 IN 319—LS 6455/DI 125 15
1 (11) Add the amount excluded from federal gross income under
2 Section 103 of the Internal Revenue Code for interest received on
3 an obligation of a state other than Indiana, or a political
4 subdivision of such a state, that is acquired by the taxpayer after
5 December 31, 2011.
6 (12) For taxable years beginning after December 25, 2016, add:
7 (A) an amount equal to the amount reported by the taxpayer on
8 IRC 965 Transition Tax Statement, line 1; or
9 (B) if the taxpayer deducted an amount under Section 965(c)
10 of the Internal Revenue Code in determining the taxpayer's
11 taxable income for purposes of the federal income tax, the
12 amount deducted under Section 965(c) of the Internal Revenue
13 Code.
14 (13) Add an amount equal to the deduction that was claimed by
15 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
16 Internal Revenue Code (attributable to global intangible
17 low-taxed income). The taxpayer shall separately specify the
18 amount of the reduction under Section 250(a)(1)(B)(i) of the
19 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
20 Internal Revenue Code.
21 (14) Subtract any interest expense paid or accrued in the current
22 taxable year but not deducted as a result of the limitation imposed
23 under Section 163(j)(1) of the Internal Revenue Code. Add any
24 interest expense paid or accrued in a previous taxable year but
25 allowed as a deduction under Section 163 of the Internal Revenue
26 Code in the current taxable year. For purposes of this subdivision,
27 an interest expense is considered paid or accrued only in the first
28 taxable year the deduction would have been allowable under
29 Section 163 of the Internal Revenue Code if the limitation under
30 Section 163(j)(1) of the Internal Revenue Code did not exist.
31 (15) Subtract the amount that would have been excluded from
32 gross income but for the enactment of Section 118(b)(2) of the
33 Internal Revenue Code for taxable years ending after December
34 22, 2017.
35 (16) Add an amount equal to the remainder of:
36 (A) the amount allowable as a deduction under Section 274(n)
37 of the Internal Revenue Code; minus
38 (B) the amount otherwise allowable as a deduction under
39 Section 274(n) of the Internal Revenue Code, if Section
40 274(n)(2)(D) of the Internal Revenue Code was not in effect
41 for amounts paid or incurred after December 31, 2020.
42 (17) For taxable years ending after March 12, 2020, subtract an
2023 IN 319—LS 6455/DI 125 16
1 amount equal to the deduction disallowed pursuant to:
2 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
3 as modified by Sections 206 and 207 of the Taxpayer Certainty
4 and Disaster Relief Tax Act (Division EE of Public Law
5 116-260); and
6 (B) Section 3134(e) of the Internal Revenue Code.
7 (18) For taxable years beginning after December 31, 2022,
8 subtract an amount equal to the deduction disallowed under
9 Section 280C(h) of the Internal Revenue Code.
10 (19) Add or subtract any other amounts the taxpayer is:
11 (A) required to add or subtract; or
12 (B) entitled to deduct;
13 under IC 6-3-2.
14 (e) In the case of insurance companies subject to tax under Section
15 831 of the Internal Revenue Code and organized under Indiana law, the
16 same as "taxable income" (as defined in Section 832 of the Internal
17 Revenue Code), adjusted as follows:
18 (1) Subtract income that is exempt from taxation under this article
19 by the Constitution and statutes of the United States.
20 (2) Add an amount equal to any deduction allowed or allowable
21 under Section 170 of the Internal Revenue Code (concerning
22 charitable contributions).
23 (3) Add an amount equal to a deduction allowed or allowable
24 under Section 805 or Section 832(c) of the Internal Revenue Code
25 for taxes based on or measured by income and levied at the state
26 level by any state.
27 (4) Subtract an amount equal to the amount included in the
28 company's taxable income under Section 78 of the Internal
29 Revenue Code (concerning foreign tax credits).
30 (5) Add or subtract the amount necessary to make the adjusted
31 gross income of any taxpayer that owns property for which bonus
32 depreciation was allowed in the current taxable year or in an
33 earlier taxable year equal to the amount of adjusted gross income
34 that would have been computed had an election not been made
35 under Section 168(k) of the Internal Revenue Code to apply bonus
36 depreciation to the property in the year that it was placed in
37 service.
38 (6) Add an amount equal to any deduction allowed under Section
39 172 of the Internal Revenue Code (concerning net operating
40 losses).
41 (7) Add or subtract the amount necessary to make the adjusted
42 gross income of any taxpayer that placed Section 179 property (as
2023 IN 319—LS 6455/DI 125 17
1 defined in Section 179 of the Internal Revenue Code) in service
2 in the current taxable year or in an earlier taxable year equal to
3 the amount of adjusted gross income that would have been
4 computed had an election for federal income tax purposes not
5 been made for the year in which the property was placed in
6 service to take deductions under Section 179 of the Internal
7 Revenue Code in a total amount exceeding the sum of:
8 (A) twenty-five thousand dollars ($25,000) to the extent
9 deductions under Section 179 of the Internal Revenue Code
10 were not elected as provided in clause (B); and
11 (B) for taxable years beginning after December 31, 2017, the
12 deductions elected under Section 179 of the Internal Revenue
13 Code on property acquired in an exchange if:
14 (i) the exchange would have been eligible for
15 nonrecognition of gain or loss under Section 1031 of the
16 Internal Revenue Code in effect on January 1, 2017;
17 (ii) the exchange is not eligible for nonrecognition of gain or
18 loss under Section 1031 of the Internal Revenue Code; and
19 (iii) the taxpayer made an election to take deductions under
20 Section 179 of the Internal Revenue Code with regard to the
21 acquired property in the year that the property was placed
22 into service.
23 The amount of deductions allowable for an item of property
24 under this clause may not exceed the amount of adjusted gross
25 income realized on the property that would have been deferred
26 under the Internal Revenue Code in effect on January 1, 2017.
27 (8) Subtract income that is:
28 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
29 derived from patents); and
30 (B) included in the insurance company's taxable income under
31 the Internal Revenue Code.
32 (9) Add an amount equal to any income not included in gross
33 income as a result of the deferral of income arising from business
34 indebtedness discharged in connection with the reacquisition after
35 December 31, 2008, and before January 1, 2011, of an applicable
36 debt instrument, as provided in Section 108(i) of the Internal
37 Revenue Code. Subtract from the adjusted gross income of any
38 taxpayer that added an amount to adjusted gross income in a
39 previous year the amount necessary to offset the amount included
40 in federal gross income as a result of the deferral of income
41 arising from business indebtedness discharged in connection with
42 the reacquisition after December 31, 2008, and before January 1,
2023 IN 319—LS 6455/DI 125 18
1 2011, of an applicable debt instrument, as provided in Section
2 108(i) of the Internal Revenue Code.
3 (10) Add an amount equal to any exempt insurance income under
4 Section 953(e) of the Internal Revenue Code that is active
5 financing income under Subpart F of Subtitle A, Chapter 1,
6 Subchapter N of the Internal Revenue Code.
7 (11) Add the amount excluded from federal gross income under
8 Section 103 of the Internal Revenue Code for interest received on
9 an obligation of a state other than Indiana, or a political
10 subdivision of such a state, that is acquired by the taxpayer after
11 December 31, 2011.
12 (12) For taxable years beginning after December 25, 2016, add:
13 (A) an amount equal to the amount reported by the taxpayer on
14 IRC 965 Transition Tax Statement, line 1; or
15 (B) if the taxpayer deducted an amount under Section 965(c)
16 of the Internal Revenue Code in determining the taxpayer's
17 taxable income for purposes of the federal income tax, the
18 amount deducted under Section 965(c) of the Internal Revenue
19 Code.
20 (13) Add an amount equal to the deduction that was claimed by
21 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
22 Internal Revenue Code (attributable to global intangible
23 low-taxed income). The taxpayer shall separately specify the
24 amount of the reduction under Section 250(a)(1)(B)(i) of the
25 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
26 Internal Revenue Code.
27 (14) Subtract any interest expense paid or accrued in the current
28 taxable year but not deducted as a result of the limitation imposed
29 under Section 163(j)(1) of the Internal Revenue Code. Add any
30 interest expense paid or accrued in a previous taxable year but
31 allowed as a deduction under Section 163 of the Internal Revenue
32 Code in the current taxable year. For purposes of this subdivision,
33 an interest expense is considered paid or accrued only in the first
34 taxable year the deduction would have been allowable under
35 Section 163 of the Internal Revenue Code if the limitation under
36 Section 163(j)(1) of the Internal Revenue Code did not exist.
37 (15) Subtract the amount that would have been excluded from
38 gross income but for the enactment of Section 118(b)(2) of the
39 Internal Revenue Code for taxable years ending after December
40 22, 2017.
41 (16) Add an amount equal to the remainder of:
42 (A) the amount allowable as a deduction under Section 274(n)
2023 IN 319—LS 6455/DI 125 19
1 of the Internal Revenue Code; minus
2 (B) the amount otherwise allowable as a deduction under
3 Section 274(n) of the Internal Revenue Code, if Section
4 274(n)(2)(D) of the Internal Revenue Code was not in effect
5 for amounts paid or incurred after December 31, 2020.
6 (17) For taxable years ending after March 12, 2020, subtract an
7 amount equal to the deduction disallowed pursuant to:
8 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
9 as modified by Sections 206 and 207 of the Taxpayer Certainty
10 and Disaster Relief Tax Act (Division EE of Public Law
11 116-260); and
12 (B) Section 3134(e) of the Internal Revenue Code.
13 (18) 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 (19) Add or subtract any other amounts the taxpayer is:
17 (A) required to add or subtract; or
18 (B) entitled to deduct;
19 under IC 6-3-2.
20 (f) In the case of trusts and estates, "taxable income" (as defined for
21 trusts and estates in Section 641(b) of the Internal Revenue Code)
22 adjusted as follows:
23 (1) Subtract income that is exempt from taxation under this article
24 by the Constitution and statutes of the United States.
25 (2) Subtract an amount equal to the amount of a September 11
26 terrorist attack settlement payment included in the federal
27 adjusted gross income of the estate of a victim of the September
28 11 terrorist attack or a trust to the extent the trust benefits a victim
29 of the September 11 terrorist attack.
30 (3) Add or subtract the amount necessary to make the adjusted
31 gross income of any taxpayer that owns property for which bonus
32 depreciation was allowed in the current taxable year or in an
33 earlier taxable year equal to the amount of adjusted gross income
34 that would have been computed had an election not been made
35 under Section 168(k) of the Internal Revenue Code to apply bonus
36 depreciation to the property in the year that it was placed in
37 service.
38 (4) Add an amount equal to any deduction allowed under Section
39 172 of the Internal Revenue Code (concerning net operating
40 losses).
41 (5) Add or subtract the amount necessary to make the adjusted
42 gross income of any taxpayer that placed Section 179 property (as
2023 IN 319—LS 6455/DI 125 20
1 defined in Section 179 of the Internal Revenue Code) in service
2 in the current taxable year or in an earlier taxable year equal to
3 the amount of adjusted gross income that would have been
4 computed had an election for federal income tax purposes not
5 been made for the year in which the property was placed in
6 service to take deductions under Section 179 of the Internal
7 Revenue Code in a total amount exceeding the sum of:
8 (A) twenty-five thousand dollars ($25,000) to the extent
9 deductions under Section 179 of the Internal Revenue Code
10 were not elected as provided in clause (B); and
11 (B) for taxable years beginning after December 31, 2017, the
12 deductions elected under Section 179 of the Internal Revenue
13 Code on property acquired in an exchange if:
14 (i) the exchange would have been eligible for
15 nonrecognition of gain or loss under Section 1031 of the
16 Internal Revenue Code in effect on January 1, 2017;
17 (ii) the exchange is not eligible for nonrecognition of gain or
18 loss under Section 1031 of the Internal Revenue Code; and
19 (iii) the taxpayer made an election to take deductions under
20 Section 179 of the Internal Revenue Code with regard to the
21 acquired property in the year that the property was placed
22 into service.
23 The amount of deductions allowable for an item of property
24 under this clause may not exceed the amount of adjusted gross
25 income realized on the property that would have been deferred
26 under the Internal Revenue Code in effect on January 1, 2017.
27 (6) Subtract income that is:
28 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
29 derived from patents); and
30 (B) included in the taxpayer's taxable income under the
31 Internal Revenue Code.
32 (7) Add an amount equal to any income not included in gross
33 income as a result of the deferral of income arising from business
34 indebtedness discharged in connection with the reacquisition after
35 December 31, 2008, and before January 1, 2011, of an applicable
36 debt instrument, as provided in Section 108(i) of the Internal
37 Revenue Code. Subtract from the adjusted gross income of any
38 taxpayer that added an amount to adjusted gross income in a
39 previous year the amount necessary to offset the amount included
40 in federal gross income as a result of the deferral of income
41 arising from business indebtedness discharged in connection with
42 the reacquisition after December 31, 2008, and before January 1,
2023 IN 319—LS 6455/DI 125 21
1 2011, of an applicable debt instrument, as provided in Section
2 108(i) of the Internal Revenue Code.
3 (8) Add the amount excluded from federal gross income under
4 Section 103 of the Internal Revenue Code for interest received on
5 an obligation of a state other than Indiana, or a political
6 subdivision of such a state, that is acquired by the taxpayer after
7 December 31, 2011.
8 (9) For taxable years beginning after December 25, 2016, add an
9 amount equal to:
10 (A) the amount reported by the taxpayer on IRC 965
11 Transition Tax Statement, line 1;
12 (B) if the taxpayer deducted an amount under Section 965(c)
13 of the Internal Revenue Code in determining the taxpayer's
14 taxable income for purposes of the federal income tax, the
15 amount deducted under Section 965(c) of the Internal Revenue
16 Code; and
17 (C) with regard to any amounts of income under Section 965
18 of the Internal Revenue Code distributed by the taxpayer, the
19 deduction under Section 965(c) of the Internal Revenue Code
20 attributable to such distributed amounts and not reported to the
21 beneficiary.
22 For purposes of this article, the amount required to be added back
23 under clause (B) is not considered to be distributed or
24 distributable to a beneficiary of the estate or trust for purposes of
25 Sections 651 and 661 of the Internal Revenue Code.
26 (10) 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 (11) Add an amount equal to the deduction for qualified business
37 income that was claimed by the taxpayer for the taxable year
38 under Section 199A of the Internal Revenue Code.
39 (12) Subtract the amount that would have been excluded from
40 gross income but for the enactment of Section 118(b)(2) of the
41 Internal Revenue Code for taxable years ending after December
42 22, 2017.
2023 IN 319—LS 6455/DI 125 22
1 (13) Add an amount equal to the remainder of:
2 (A) the amount allowable as a deduction under Section 274(n)
3 of the Internal Revenue Code; minus
4 (B) the amount otherwise allowable as a deduction under
5 Section 274(n) of the Internal Revenue Code, if Section
6 274(n)(2)(D) of the Internal Revenue Code was not in effect
7 for amounts paid or incurred after December 31, 2020.
8 (14) For taxable years beginning after December 31, 2017, and
9 before January 1, 2021, add an amount equal to the excess
10 business loss of the taxpayer as defined in Section 461(l)(3) of the
11 Internal Revenue Code. In addition:
12 (A) If a taxpayer has an excess business loss under this
13 subdivision and also has modifications under subdivisions (3)
14 and (5) for property placed in service during the taxable year,
15 the taxpayer shall treat a portion of the taxable year
16 modifications for that property as occurring in the taxable year
17 the property is placed in service and a portion of the
18 modifications as occurring in the immediately following
19 taxable year.
20 (B) The portion of the modifications under subdivisions (3)
21 and (5) for property placed in service during the taxable year
22 treated as occurring in the taxable year in which the property
23 is placed in service equals:
24 (i) the modification for the property otherwise determined
25 under this section; minus
26 (ii) the excess business loss disallowed under this
27 subdivision;
28 but not less than zero (0).
29 (C) The portion of the modifications under subdivisions (3)
30 and (5) for property placed in service during the taxable year
31 treated as occurring in the taxable year immediately following
32 the taxable year in which the property is placed in service
33 equals the modification for the property otherwise determined
34 under this section minus the amount in clause (B).
35 (D) Any reallocation of modifications between taxable years
36 under clauses (B) and (C) shall be first allocated to the
37 modification under subdivision (3), then to the modification
38 under subdivision (5).
39 (15) For taxable years ending after March 12, 2020, subtract an
40 amount equal to the deduction disallowed pursuant to:
41 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
42 as modified by Sections 206 and 207 of the Taxpayer Certainty
2023 IN 319—LS 6455/DI 125 23
1 and Disaster Relief Tax Act (Division EE of Public Law
2 116-260); and
3 (B) Section 3134(e) of the Internal Revenue Code.
4 (16) For taxable years beginning after December 31, 2022,
5 subtract an amount equal to the deduction disallowed under
6 Section 280C(h) of the Internal Revenue Code.
7 (17) Add or subtract any other amounts the taxpayer is:
8 (A) required to add or subtract; or
9 (B) entitled to deduct;
10 under IC 6-3-2.
11 (g) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17) may not
12 be construed to require an add back or allow a deduction or exemption
13 more than once for a particular add back, deduction, or exemption.
14 (h) For taxable years beginning after December 25, 2016, if:
15 (1) a taxpayer is a shareholder, either directly or indirectly, in a
16 corporation that is an E&P deficit foreign corporation as defined
17 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
18 earnings and profit deficit, or a portion of the earnings and profit
19 deficit, of the E&P deficit foreign corporation is permitted to
20 reduce the federal adjusted gross income or federal taxable
21 income of the taxpayer, the deficit, or the portion of the deficit,
22 shall also reduce the amount taxable under this section to the
23 extent permitted under the Internal Revenue Code, however, in no
24 case shall this permit a reduction in the amount taxable under
25 Section 965 of the Internal Revenue Code for purposes of this
26 section to be less than zero (0); and
27 (2) the Internal Revenue Service issues guidance that such an
28 income or deduction is not reported directly on a federal tax
29 return or is to be reported in a manner different than specified in
30 this section, this section shall be construed as if federal adjusted
31 gross income or federal taxable income included the income or
32 deduction.
33 (i) If a partner is required to include an item of income, a deduction,
34 or another tax attribute in the partner's adjusted gross income tax return
35 pursuant to IC 6-3-4.5, such item shall be considered to be includible
36 in the partner's federal adjusted gross income or federal taxable
37 income, regardless of whether such item is actually required to be
38 reported by the partner for federal income tax purposes. For purposes
39 of this subsection:
40 (1) items for which a valid election is made under IC 6-3-4.5-6,
41 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
42 in the partner's adjusted gross income or taxable income; and
2023 IN 319—LS 6455/DI 125 24
1 (2) items for which the partnership did not make an election under
2 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
3 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
4 shall be included in the partner's adjusted gross income or taxable
5 income.
6 SECTION 2. IC 6-3-2-27 IS ADDED TO THE INDIANA CODE
7 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
8 JANUARY 1, 2023 (RETROACTIVE)]: Sec. 27. For a fetus to be
9 considered a dependent child for purposes of the exemptions in
10 IC 6-3-1-3.5(a)(4)(A) and IC 6-3-1-3.5(a)(5)(A), a taxpayer must
11 submit a report from a radiologic imaging study reflecting the
12 taxpayer's pregnancy during the taxable year with the taxpayer's
13 annual state tax return or returns in the manner prescribed by the
14 department.
15 SECTION 3. [EFFECTIVE JANUARY 1, 2023 (RETROACTIVE)]
16 (a) IC 6-3-1-3.5, as amended by this act, and IC 6-3-2-27, as added
17 by this act, apply to taxable years beginning after December 31,
18 2022.
19 (b) This SECTION expires July 1, 2026.
20 SECTION 4. An emergency is declared for this act.
2023 IN 319—LS 6455/DI 125