Introduced Version
SENATE BILL No. 359
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1-49; IC 6-3-1-3.5; IC 6-3-2-6.
Synopsis: Tax matters. Provides a credit against an individual's
homestead property tax liability equal to the amount by which the
property tax liability increases by more than 10% from the prior year.
Requires the county auditor to apply the credit against an individual's
homestead property tax liability without the need to file an application.
Provides that the minimum property tax liability for an individual's
homestead is an amount equal to the result of: (1) the property tax
liability first due and payable on the homestead for the immediately
preceding calendar year; multiplied by (2) 0.9. Increases the: (1)
amount of certain personal exemptions from $1,000 to $2,500 for
individual taxpayers who satisfy certain income criteria; and (2)
amount of property taxes paid by an individual taxpayer on the
individual's principal place of residence from $2,500 to $3,500; that
may be subtracted from an individual's federal adjusted gross income.
Increases the renter's deduction to $4,000 for state income tax
purposes.
Effective: July 1, 2023; January 1, 2024.
Qaddoura
January 12, 2023, read first time and referred to Committee on Tax and Fiscal Policy.
2023 IN 359—LS 6854/DI 129 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. 359
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 6-1.1-49 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2023]:
4 Chapter 49. Homestead Property Tax Liability
5 Sec. 1. As used in this chapter, "homestead" refers to a
6 homestead that has been granted a standard deduction under
7 IC 6-1.1-12-37.
8 Sec. 2. As used in this chapter, "homestead property tax
9 liability" refers to liability for property taxes that:
10 (1) is imposed on the assessment of a homestead after the
11 application of all deductions and credits for which the
12 homestead is eligible; but
13 (2) does not include the portion of the property tax liability
14 that is attributable to a school operating referendum tax levy
15 approved under IC 20-46-1 or a school safety referendum tax
16 levy approved under IC 20-46-9.
17 The term does not include any interest or penalty imposed under
2023 IN 359—LS 6854/DI 129 2
1 this article.
2 Sec. 3. (a) Beginning with property taxes first due and payable
3 in 2024 and subject to section 4 of this chapter, if an individual's
4 homestead property tax liability increases by more than ten
5 percent (10%) compared to the preceding year, the individual is
6 entitled to a credit against the individual's homestead property tax
7 liability equal to:
8 (1) the property tax liability first due and payable on the
9 homestead for the calendar year; minus
10 (2) the result of:
11 (A) the property tax liability first due and payable on the
12 homestead for the immediately preceding calendar year,
13 after the application of the credit granted under this
14 section for that year; multiplied by
15 (B) one and one-tenth (1.1).
16 However, property tax liability imposed on any significant
17 improvements or additions to the homestead property after the
18 assessment date for which property tax liability described in
19 subdivision (2) was imposed shall not be considered in determining
20 the credit granted under this section in the current calendar year.
21 (b) Beginning with property taxes first due and payable in 2024
22 the minimum property tax liability for an individual's homestead
23 is an amount equal to the result of:
24 (1) the property tax liability first due and payable on the
25 homestead for the immediately preceding calendar year;
26 multiplied by
27 (2) nine-tenths (0.9).
28 However, the minimum property tax liability shall be adjusted to
29 reflect a physical change to the homestead that results in a
30 decreased assessment of the homestead property after the
31 assessment date for which property tax liability described in
32 subdivision (1) was imposed.
33 Sec. 4. The credit provided under this chapter does not apply to
34 an individual who is delinquent in the payment of any property
35 taxes.
36 Sec. 5. An individual is not required to file an application for the
37 credit under this chapter. The county auditor shall:
38 (1) identify homesteads in the county that are eligible for the
39 credit under this chapter; and
40 (2) apply the credit under this chapter to the property tax
41 liability on the identified homestead.
42 SECTION 2. IC 6-3-1-3.5, AS AMENDED BY P.L.180-2022(ss),
2023 IN 359—LS 6854/DI 129 3
1 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2 JANUARY 1, 2024]: Sec. 3.5. When used in this article, the term
3 "adjusted gross income" shall mean the following:
4 (a) In the case of all individuals, "adjusted gross income" (as
5 defined in Section 62 of the Internal Revenue Code), modified as
6 follows:
7 (1) Subtract income that is exempt from taxation under this article
8 by the Constitution and statutes of the United States.
9 (2) Except as provided in subsection (c), add an amount equal to
10 any deduction or deductions allowed or allowable pursuant to
11 Section 62 of the Internal Revenue Code for taxes based on or
12 measured by income and levied at the state level by any state of
13 the United States.
14 (3) Subtract the following amounts:
15 (A) This clause applies to an individual with an adjusted
16 gross income (as defined in Section 62 of the Internal
17 Revenue Code) of more than two hundred thousand dollars
18 ($200,000) and to a married couple with an adjusted gross
19 income (as defined in Section 62 of the Internal Revenue
20 Code) of more than four hundred thousand dollars
21 ($400,000). One thousand dollars ($1,000), or in the case of a
22 joint return filed by a husband and wife, subtract for each
23 spouse one thousand dollars ($1,000).
24 (B) This clause applies to an individual with an adjusted
25 gross income (as defined in Section 62 of the Internal
26 Revenue Code) of not more than two hundred thousand
27 dollars ($200,000) and to a married couple with an
28 adjusted gross income (as defined in Section 62 of the
29 Internal Revenue Code) of not more than four hundred
30 thousand dollars ($400,000). Two thousand five hundred
31 dollars ($2,500), or in the case of a joint return filed by a
32 husband and wife, subtract for each spouse two thousand
33 five hundred dollars ($2,500).
34 (4) Subtract the following amounts:
35 (A) This clause applies to an individual with an adjusted
36 gross income (as defined in Section 62 of the Internal
37 Revenue Code) of more than two hundred thousand dollars
38 ($200,000) and to a married couple with an adjusted gross
39 income (as defined in Section 62 of the Internal Revenue
40 Code) of more than four hundred thousand dollars
41 ($400,000). One thousand dollars ($1,000) for:
42 (A) (i) each of the exemptions provided by Section 151(c) of
2023 IN 359—LS 6854/DI 129 4
1 the Internal Revenue Code (as effective January 1, 2017);
2 (B) (ii) each additional amount allowable under Section
3 63(f) of the Internal Revenue Code; and
4 (C) (iii) the spouse of the taxpayer if a separate return is
5 made by the taxpayer and if the spouse, for the calendar year
6 in which the taxable year of the taxpayer begins, has no
7 gross income and is not the dependent of another taxpayer.
8 (B) This clause applies to an individual with an adjusted
9 gross income (as defined in Section 62 of the Internal
10 Revenue Code) of not more than two hundred thousand
11 dollars ($200,000) and to a married couple with an
12 adjusted gross income (as defined in Section 62 of the
13 Internal Revenue Code) of not more than four hundred
14 thousand dollars ($400,000). Two thousand five hundred
15 dollars ($2,500), for:
16 (i) each of the exemptions provided by Section 151(c) of
17 the Internal Revenue Code (as effective January 1,
18 2017);
19 (ii) each additional amount allowable under Section 63(f)
20 of the Internal Revenue Code; and
21 (iii) the spouse of the taxpayer if a separate return is
22 made by the taxpayer and if the spouse, for the calendar
23 year in which the taxable year of the taxpayer begins,
24 has no gross income and is not the dependent of another
25 taxpayer.
26 (5) Subtract:
27 (A) One thousand five hundred dollars ($1,500) for each of the
28 exemptions allowed under Section 151(c)(1)(B) of the Internal
29 Revenue Code (as effective January 1, 2004).
30 (B) One thousand five hundred dollars ($1,500) for each
31 exemption allowed under Section 151(c) of the Internal
32 Revenue Code (as effective January 1, 2017) for an individual:
33 (i) who is less than nineteen (19) years of age or is a
34 full-time student who is less than twenty-four (24) years of
35 age;
36 (ii) for whom the taxpayer is the legal guardian; and
37 (iii) for whom the taxpayer does not claim an exemption
38 under clause (A).
39 (C) Five hundred dollars ($500) for each additional amount
40 allowable under Section 63(f)(1) of the Internal Revenue Code
41 if the federal adjusted gross income of the taxpayer, or the
42 taxpayer and the taxpayer's spouse in the case of a joint return,
2023 IN 359—LS 6854/DI 129 5
1 is less than forty thousand dollars ($40,000). In the case of a
2 married individual filing a separate return, the qualifying
3 income amount in this clause is equal to twenty thousand
4 dollars ($20,000).
5 (D) Three thousand dollars ($3,000) for each exemption
6 allowed under Section 151(c) of the Internal Revenue Code (as
7 effective January 1, 2017) for an individual who is:
8 (i) an adopted child of the taxpayer; and
9 (ii) less than nineteen (19) years of age or is a full-time
10 student who is less than twenty-four (24) years of age.
11 This amount is in addition to any amount subtracted under
12 clause (A) or (B).
13 This amount is in addition to the amount subtracted under
14 subdivision (4).
15 (6) Subtract any amounts included in federal adjusted gross
16 income under Section 111 of the Internal Revenue Code as a
17 recovery of items previously deducted as an itemized deduction
18 from adjusted gross income.
19 (7) Subtract any amounts included in federal adjusted gross
20 income under the Internal Revenue Code which amounts were
21 received by the individual as supplemental railroad retirement
22 annuities under 45 U.S.C. 231 and which are not deductible under
23 subdivision (1).
24 (8) Subtract an amount equal to the amount of federal Social
25 Security and Railroad Retirement benefits included in a taxpayer's
26 federal gross income by Section 86 of the Internal Revenue Code.
27 (9) In the case of a nonresident taxpayer or a resident taxpayer
28 residing in Indiana for a period of less than the taxpayer's entire
29 taxable year, the total amount of the deductions allowed pursuant
30 to subdivisions (3), (4), and (5) shall be reduced to an amount
31 which bears the same ratio to the total as the taxpayer's income
32 taxable in Indiana bears to the taxpayer's total income.
33 (10) In the case of an individual who is a recipient of assistance
34 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
35 subtract an amount equal to that portion of the individual's
36 adjusted gross income with respect to which the individual is not
37 allowed under federal law to retain an amount to pay state and
38 local income taxes.
39 (11) In the case of an eligible individual, subtract the amount of
40 a Holocaust victim's settlement payment included in the
41 individual's federal adjusted gross income.
42 (12) Subtract an amount equal to the portion of any premiums
2023 IN 359—LS 6854/DI 129 6
1 paid during the taxable year by the taxpayer for a qualified long
2 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
3 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
4 file a joint income tax return or the taxpayer is otherwise entitled
5 to a deduction under this subdivision for the taxpayer's spouse, or
6 both.
7 (13) Subtract an amount equal to the lesser of:
8 (A) two three thousand five hundred dollars ($2,500),
9 ($3,500) or one thousand two seven hundred fifty dollars
10 ($1,250) ($1,750) in the case of a married individual filing a
11 separate return; or
12 (B) the amount of property taxes that are paid during the
13 taxable year in Indiana by the individual on the individual's
14 principal place of residence.
15 (14) Subtract an amount equal to the amount of a September 11
16 terrorist attack settlement payment included in the individual's
17 federal adjusted gross income.
18 (15) Add or subtract the amount necessary to make the adjusted
19 gross income of any taxpayer that owns property for which bonus
20 depreciation was allowed in the current taxable year or in an
21 earlier taxable year equal to the amount of adjusted gross income
22 that would have been computed had an election not been made
23 under Section 168(k) of the Internal Revenue Code to apply bonus
24 depreciation to the property in the year that it was placed in
25 service.
26 (16) Add an amount equal to any deduction allowed under
27 Section 172 of the Internal Revenue Code (concerning net
28 operating losses).
29 (17) Add or subtract the amount necessary to make the adjusted
30 gross income of any taxpayer that placed Section 179 property (as
31 defined in Section 179 of the Internal Revenue Code) in service
32 in the current taxable year or in an earlier taxable year equal to
33 the amount of adjusted gross income that would have been
34 computed had an election for federal income tax purposes not
35 been made for the year in which the property was placed in
36 service to take deductions under Section 179 of the Internal
37 Revenue Code in a total amount exceeding the sum of:
38 (A) twenty-five thousand dollars ($25,000) to the extent
39 deductions under Section 179 of the Internal Revenue Code
40 were not elected as provided in clause (B); and
41 (B) for taxable years beginning after December 31, 2017, the
42 deductions elected under Section 179 of the Internal Revenue
2023 IN 359—LS 6854/DI 129 7
1 Code on property acquired in an exchange if:
2 (i) the exchange would have been eligible for
3 nonrecognition of gain or loss under Section 1031 of the
4 Internal Revenue Code in effect on January 1, 2017;
5 (ii) the exchange is not eligible for nonrecognition of gain or
6 loss under Section 1031 of the Internal Revenue Code; and
7 (iii) the taxpayer made an election to take deductions under
8 Section 179 of the Internal Revenue Code with regard to the
9 acquired property in the year that the property was placed
10 into service.
11 The amount of deductions allowable for an item of property
12 under this clause may not exceed the amount of adjusted gross
13 income realized on the property that would have been deferred
14 under the Internal Revenue Code in effect on January 1, 2017.
15 (18) Subtract an amount equal to the amount of the taxpayer's
16 qualified military income that was not excluded from the
17 taxpayer's gross income for federal income tax purposes under
18 Section 112 of the Internal Revenue Code.
19 (19) Subtract income that is:
20 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
21 derived from patents); and
22 (B) included in the individual's federal adjusted gross income
23 under the Internal Revenue Code.
24 (20) Add an amount equal to any income not included in gross
25 income as a result of the deferral of income arising from business
26 indebtedness discharged in connection with the reacquisition after
27 December 31, 2008, and before January 1, 2011, of an applicable
28 debt instrument, as provided in Section 108(i) of the Internal
29 Revenue Code. Subtract the amount necessary from the adjusted
30 gross income of any taxpayer that added an amount to adjusted
31 gross income in a previous year to offset the amount included in
32 federal gross income as a result of the deferral of income arising
33 from business indebtedness discharged in connection with the
34 reacquisition after December 31, 2008, and before January 1,
35 2011, of an applicable debt instrument, as provided in Section
36 108(i) of the Internal Revenue Code.
37 (21) Add the amount excluded from federal gross income under
38 Section 103 of the Internal Revenue Code for interest received on
39 an obligation of a state other than Indiana, or a political
40 subdivision of such a state, that is acquired by the taxpayer after
41 December 31, 2011.
42 (22) Subtract an amount as described in Section 1341(a)(2) of the
2023 IN 359—LS 6854/DI 129 8
1 Internal Revenue Code to the extent, if any, that the amount was
2 previously included in the taxpayer's adjusted gross income for a
3 prior taxable year.
4 (23) For taxable years beginning after December 25, 2016, add an
5 amount equal to the deduction for deferred foreign income that
6 was claimed by the taxpayer for the taxable year under Section
7 965(c) of the Internal Revenue Code.
8 (24) Subtract any interest expense paid or accrued in the current
9 taxable year but not deducted as a result of the limitation imposed
10 under Section 163(j)(1) of the Internal Revenue Code. Add any
11 interest expense paid or accrued in a previous taxable year but
12 allowed as a deduction under Section 163 of the Internal Revenue
13 Code in the current taxable year. For purposes of this subdivision,
14 an interest expense is considered paid or accrued only in the first
15 taxable year the deduction would have been allowable under
16 Section 163 of the Internal Revenue Code if the limitation under
17 Section 163(j)(1) of the Internal Revenue Code did not exist.
18 (25) Subtract the amount that would have been excluded from
19 gross income but for the enactment of Section 118(b)(2) of the
20 Internal Revenue Code for taxable years ending after December
21 22, 2017.
22 (26) For taxable years beginning after December 31, 2019, and
23 before January 1, 2021, add an amount of the deduction claimed
24 under Section 62(a)(22) of the Internal Revenue Code.
25 (27) For taxable years beginning after December 31, 2019, for
26 payments made by an employer under an education assistance
27 program after March 27, 2020:
28 (A) add the amount of payments by an employer that are
29 excluded from the taxpayer's federal gross income under
30 Section 127(c)(1)(B) of the Internal Revenue Code; and
31 (B) deduct the interest allowable under Section 221 of the
32 Internal Revenue Code, if the disallowance under Section
33 221(e)(1) of the Internal Revenue Code did not apply to the
34 payments described in clause (A). For purposes of applying
35 Section 221(b) of the Internal Revenue Code to the amount
36 allowable under this clause, the amount under clause (A) shall
37 not be added to adjusted gross income.
38 (28) Add an amount equal to the remainder of:
39 (A) the amount allowable as a deduction under Section 274(n)
40 of the Internal Revenue Code; minus
41 (B) the amount otherwise allowable as a deduction under
42 Section 274(n) of the Internal Revenue Code, if Section
2023 IN 359—LS 6854/DI 129 9
1 274(n)(2)(D) of the Internal Revenue Code was not in effect
2 for amounts paid or incurred after December 31, 2020.
3 (29) For taxable years beginning after December 31, 2017, and
4 before January 1, 2021, add an amount equal to the excess
5 business loss of the taxpayer as defined in Section 461(l)(3) of the
6 Internal Revenue Code. In addition:
7 (A) If a taxpayer has an excess business loss under this
8 subdivision and also has modifications under subdivisions (15)
9 and (17) for property placed in service during the taxable year,
10 the taxpayer shall treat a portion of the taxable year
11 modifications for that property as occurring in the taxable year
12 the property is placed in service and a portion of the
13 modifications as occurring in the immediately following
14 taxable year.
15 (B) 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 in which the property
18 is placed in service equals:
19 (i) the modification for the property otherwise determined
20 under this section; minus
21 (ii) the excess business loss disallowed under this
22 subdivision;
23 but not less than zero (0).
24 (C) The portion of the modifications under subdivisions (15)
25 and (17) for property placed in service during the taxable year
26 treated as occurring in the taxable year immediately following
27 the taxable year in which the property is placed in service
28 equals the modification for the property otherwise determined
29 under this section minus the amount in clause (B).
30 (D) Any reallocation of modifications between taxable years
31 under clauses (B) and (C) shall be first allocated to the
32 modification under subdivision (15), then to the modification
33 under subdivision (17).
34 (30) Add an amount equal to the amount excluded from federal
35 gross income under Section 108(f)(5) of the Internal Revenue
36 Code. For purposes of this subdivision:
37 (A) if an amount excluded under Section 108(f)(5) of the
38 Internal Revenue Code would be excludible under Section
39 108(a)(1)(B) of the Internal Revenue Code, the exclusion
40 under Section 108(a)(1)(B) of the Internal Revenue Code shall
41 take precedence; and
42 (B) if an amount would have been excludible under Section
2023 IN 359—LS 6854/DI 129 10
1 108(f)(5) of the Internal Revenue Code as in effect on January
2 1, 2020, the amount is not required to be added back under this
3 subdivision.
4 (31) For taxable years ending after March 12, 2020, subtract an
5 amount equal to the deduction disallowed pursuant to:
6 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
7 as modified by Sections 206 and 207 of the Taxpayer Certainty
8 and Disaster Relief Tax Act (Division EE of Public Law
9 116-260); and
10 (B) Section 3134(e) of the Internal Revenue Code.
11 (32) Subtract the amount of an annual grant amount distributed to
12 a taxpayer's Indiana education scholarship account under
13 IC 20-51.4-4-2 that is used for a qualified expense (as defined in
14 IC 20-51.4-2-9) or to an Indiana enrichment scholarship account
15 under IC 20-52 that is used for qualified expenses (as defined in
16 IC 20-52-2-6), to the extent the distribution used for the qualified
17 expense is included in the taxpayer's federal adjusted gross
18 income under the Internal Revenue Code.
19 (33) For taxable years beginning after December 31, 2019, and
20 before January 1, 2021, add an amount equal to the amount of
21 unemployment compensation excluded from federal gross income
22 under Section 85(c) of the Internal Revenue Code.
23 (34) For taxable years beginning after December 31, 2022,
24 subtract an amount equal to the deduction disallowed under
25 Section 280C(h) of the Internal Revenue Code.
26 (35) Subtract any other amounts the taxpayer is entitled to deduct
27 under IC 6-3-2.
28 (b) In the case of corporations, the same as "taxable income" (as
29 defined in Section 63 of the Internal Revenue Code) adjusted as
30 follows:
31 (1) Subtract income that is exempt from taxation under this article
32 by the Constitution and statutes of the United States.
33 (2) Add an amount equal to any deduction or deductions allowed
34 or allowable pursuant to Section 170 of the Internal Revenue
35 Code (concerning charitable contributions).
36 (3) Except as provided in subsection (c), add an amount equal to
37 any deduction or deductions allowed or allowable pursuant to
38 Section 63 of the Internal Revenue Code for taxes based on or
39 measured by income and levied at the state level by any state of
40 the United States.
41 (4) Subtract an amount equal to the amount included in the
42 corporation's taxable income under Section 78 of the Internal
2023 IN 359—LS 6854/DI 129 11
1 Revenue Code (concerning foreign tax credits).
2 (5) Add or subtract the amount necessary to make the adjusted
3 gross income of any taxpayer that owns property for which bonus
4 depreciation was allowed in the current taxable year or in an
5 earlier taxable year equal to the amount of adjusted gross income
6 that would have been computed had an election not been made
7 under Section 168(k) of the Internal Revenue Code to apply bonus
8 depreciation to the property in the year that it was placed in
9 service.
10 (6) Add an amount equal to any deduction allowed under Section
11 172 of the Internal Revenue Code (concerning net operating
12 losses).
13 (7) Add or subtract the amount necessary to make the adjusted
14 gross income of any taxpayer that placed Section 179 property (as
15 defined in Section 179 of the Internal Revenue Code) in service
16 in the current taxable year or in an earlier taxable year equal to
17 the amount of adjusted gross income that would have been
18 computed had an election for federal income tax purposes not
19 been made for the year in which the property was placed in
20 service to take deductions under Section 179 of the Internal
21 Revenue Code in a total amount exceeding the sum of:
22 (A) twenty-five thousand dollars ($25,000) to the extent
23 deductions under Section 179 of the Internal Revenue Code
24 were not elected as provided in clause (B); and
25 (B) for taxable years beginning after December 31, 2017, the
26 deductions elected under Section 179 of the Internal Revenue
27 Code on property acquired in an exchange if:
28 (i) the exchange would have been eligible for
29 nonrecognition of gain or loss under Section 1031 of the
30 Internal Revenue Code in effect on January 1, 2017;
31 (ii) the exchange is not eligible for nonrecognition of gain or
32 loss under Section 1031 of the Internal Revenue Code; and
33 (iii) the taxpayer made an election to take deductions under
34 Section 179 of the Internal Revenue Code with regard to the
35 acquired property in the year that the property was placed
36 into service.
37 The amount of deductions allowable for an item of property
38 under this clause may not exceed the amount of adjusted gross
39 income realized on the property that would have been deferred
40 under the Internal Revenue Code in effect on January 1, 2017.
41 (8) Add to the extent required by IC 6-3-2-20:
42 (A) the amount of intangible expenses (as defined in
2023 IN 359—LS 6854/DI 129 12
1 IC 6-3-2-20) for the taxable year that reduced the corporation's
2 taxable income (as defined in Section 63 of the Internal
3 Revenue Code) for federal income tax purposes; and
4 (B) any directly related interest expenses (as defined in
5 IC 6-3-2-20) that reduced the corporation's adjusted gross
6 income (determined without regard to this subdivision). For
7 purposes of this clause, any directly related interest expense
8 that constitutes business interest within the meaning of Section
9 163(j) of the Internal Revenue Code shall be considered to
10 have reduced the taxpayer's federal taxable income only in the
11 first taxable year in which the deduction otherwise would have
12 been allowable under Section 163 of the Internal Revenue
13 Code if the limitation under Section 163(j)(1) of the Internal
14 Revenue Code did not exist.
15 (9) Add an amount equal to any deduction for dividends paid (as
16 defined in Section 561 of the Internal Revenue Code) to
17 shareholders of a captive real estate investment trust (as defined
18 in section 34.5 of this chapter).
19 (10) Subtract income that is:
20 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
21 derived from patents); and
22 (B) included in the corporation's taxable income under the
23 Internal Revenue Code.
24 (11) Add an amount equal to any income not included in gross
25 income as a result of the deferral of income arising from business
26 indebtedness discharged in connection with the reacquisition after
27 December 31, 2008, and before January 1, 2011, of an applicable
28 debt instrument, as provided in Section 108(i) of the Internal
29 Revenue Code. Subtract from the adjusted gross income of any
30 taxpayer that added an amount to adjusted gross income in a
31 previous year the amount necessary to offset the amount included
32 in federal gross income as a result of the deferral of income
33 arising from business indebtedness discharged in connection with
34 the reacquisition after December 31, 2008, and before January 1,
35 2011, of an applicable debt instrument, as provided in Section
36 108(i) of the Internal Revenue Code.
37 (12) Add the amount excluded from federal gross income under
38 Section 103 of the Internal Revenue Code for interest received on
39 an obligation of a state other than Indiana, or a political
40 subdivision of such a state, that is acquired by the taxpayer after
41 December 31, 2011.
42 (13) For taxable years beginning after December 25, 2016:
2023 IN 359—LS 6854/DI 129 13
1 (A) for a corporation other than a real estate investment trust,
2 add:
3 (i) an amount equal to the amount reported by the taxpayer
4 on IRC 965 Transition Tax Statement, line 1; or
5 (ii) if the taxpayer deducted an amount under Section 965(c)
6 of the Internal Revenue Code in determining the taxpayer's
7 taxable income for purposes of the federal income tax, the
8 amount deducted under Section 965(c) of the Internal
9 Revenue Code; and
10 (B) for a real estate investment trust, add an amount equal to
11 the deduction for deferred foreign income that was claimed by
12 the taxpayer for the taxable year under Section 965(c) of the
13 Internal Revenue Code, but only to the extent that the taxpayer
14 included income pursuant to Section 965 of the Internal
15 Revenue Code in its taxable income for federal income tax
16 purposes or is required to add back dividends paid under
17 subdivision (9).
18 (14) Add an amount equal to the deduction that was claimed by
19 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
20 Internal Revenue Code (attributable to global intangible
21 low-taxed income). The taxpayer shall separately specify the
22 amount of the reduction under Section 250(a)(1)(B)(i) of the
23 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
24 Internal Revenue Code.
25 (15) 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 (16) Subtract the amount that would have been excluded from
36 gross income but for the enactment of Section 118(b)(2) of the
37 Internal Revenue Code for taxable years ending after December
38 22, 2017.
39 (17) Add an amount equal to the remainder of:
40 (A) the amount allowable as a deduction under Section 274(n)
41 of the Internal Revenue Code; minus
42 (B) the amount otherwise allowable as a deduction under
2023 IN 359—LS 6854/DI 129 14
1 Section 274(n) of the Internal Revenue Code, if Section
2 274(n)(2)(D) of the Internal Revenue Code was not in effect
3 for amounts paid or incurred after December 31, 2020.
4 (18) For taxable years ending after March 12, 2020, subtract an
5 amount equal to the deduction disallowed pursuant to:
6 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
7 as modified by Sections 206 and 207 of the Taxpayer Certainty
8 and Disaster Relief Tax Act (Division EE of Public Law
9 116-260); and
10 (B) Section 3134(e) of the Internal Revenue Code.
11 (19) For taxable years beginning after December 31, 2022,
12 subtract an amount equal to the deduction disallowed under
13 Section 280C(h) of the Internal Revenue Code.
14 (20) Add or subtract any other amounts the taxpayer is:
15 (A) required to add or subtract; or
16 (B) entitled to deduct;
17 under IC 6-3-2.
18 (c) The following apply to taxable years beginning after December
19 31, 2018, for purposes of the add back of any deduction allowed on the
20 taxpayer's federal income tax return for wagering taxes, as provided in
21 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
22 the taxpayer is a corporation:
23 (1) For taxable years beginning after December 31, 2018, and
24 before January 1, 2020, a taxpayer is required to add back under
25 this section eighty-seven and five-tenths percent (87.5%) of any
26 deduction allowed on the taxpayer's federal income tax return for
27 wagering taxes.
28 (2) For taxable years beginning after December 31, 2019, and
29 before January 1, 2021, a taxpayer is required to add back under
30 this section seventy-five percent (75%) of any deduction allowed
31 on the taxpayer's federal income tax return for wagering taxes.
32 (3) For taxable years beginning after December 31, 2020, and
33 before January 1, 2022, a taxpayer is required to add back under
34 this section sixty-two and five-tenths percent (62.5%) of any
35 deduction allowed on the taxpayer's federal income tax return for
36 wagering taxes.
37 (4) For taxable years beginning after December 31, 2021, and
38 before January 1, 2023, a taxpayer is required to add back under
39 this section fifty percent (50%) of any deduction allowed on the
40 taxpayer's federal income tax return for wagering taxes.
41 (5) For taxable years beginning after December 31, 2022, and
42 before January 1, 2024, a taxpayer is required to add back under
2023 IN 359—LS 6854/DI 129 15
1 this section thirty-seven and five-tenths percent (37.5%) of any
2 deduction allowed on the taxpayer's federal income tax return for
3 wagering taxes.
4 (6) For taxable years beginning after December 31, 2023, and
5 before January 1, 2025, a taxpayer is required to add back under
6 this section twenty-five percent (25%) of any deduction allowed
7 on the taxpayer's federal income tax return for wagering taxes.
8 (7) For taxable years beginning after December 31, 2024, and
9 before January 1, 2026, a taxpayer is required to add back under
10 this section twelve and five-tenths percent (12.5%) of any
11 deduction allowed on the taxpayer's federal income tax return for
12 wagering taxes.
13 (8) For taxable years beginning after December 31, 2025, a
14 taxpayer is not required to add back under this section any amount
15 of a deduction allowed on the taxpayer's federal income tax return
16 for wagering taxes.
17 (d) In the case of life insurance companies (as defined in Section
18 816(a) of the Internal Revenue Code) that are organized under Indiana
19 law, the same as "life insurance company taxable income" (as defined
20 in Section 801 of the Internal Revenue Code), adjusted as 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 allowed or allowable
24 under Section 170 of the Internal Revenue Code (concerning
25 charitable contributions).
26 (3) Add an amount equal to a deduction allowed or allowable
27 under Section 805 or Section 832(c) of the Internal Revenue Code
28 for taxes based on or measured by income and levied at the state
29 level by any state.
30 (4) Subtract an amount equal to the amount included in the
31 company's taxable income under Section 78 of the Internal
32 Revenue Code (concerning foreign tax credits).
33 (5) Add or subtract the amount necessary to make the adjusted
34 gross income of any taxpayer that owns property for which bonus
35 depreciation was allowed in the current taxable year or in an
36 earlier taxable year equal to the amount of adjusted gross income
37 that would have been computed had an election not been made
38 under Section 168(k) of the Internal Revenue Code to apply bonus
39 depreciation to the property in the year that it was placed in
40 service.
41 (6) Add an amount equal to any deduction allowed under Section
42 172 of the Internal Revenue Code (concerning net operating
2023 IN 359—LS 6854/DI 129 16
1 losses).
2 (7) Add or subtract the amount necessary to make the adjusted
3 gross income of any taxpayer that placed Section 179 property (as
4 defined in Section 179 of the Internal Revenue Code) in service
5 in the current taxable year or in an earlier taxable year equal to
6 the amount of adjusted gross income that would have been
7 computed had an election for federal income tax purposes not
8 been made for the year in which the property was placed in
9 service to take deductions under Section 179 of the Internal
10 Revenue Code in a total amount exceeding the sum of:
11 (A) twenty-five thousand dollars ($25,000) to the extent
12 deductions under Section 179 of the Internal Revenue Code
13 were not elected as provided in clause (B); and
14 (B) for taxable years beginning after December 31, 2017, the
15 deductions elected under Section 179 of the Internal Revenue
16 Code on property acquired in an exchange if:
17 (i) the exchange would have been eligible for
18 nonrecognition of gain or loss under Section 1031 of the
19 Internal Revenue Code in effect on January 1, 2017;
20 (ii) the exchange is not eligible for nonrecognition of gain or
21 loss under Section 1031 of the Internal Revenue Code; and
22 (iii) the taxpayer made an election to take deductions under
23 Section 179 of the Internal Revenue Code with regard to the
24 acquired property in the year that the property was placed
25 into service.
26 The amount of deductions allowable for an item of property
27 under this clause may not exceed the amount of adjusted gross
28 income realized on the property that would have been deferred
29 under the Internal Revenue Code in effect on January 1, 2017.
30 (8) Subtract income that is:
31 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
32 derived from patents); and
33 (B) included in the insurance company's taxable income under
34 the Internal Revenue Code.
35 (9) Add an amount equal to any income not included in gross
36 income as a result of the deferral of income arising from business
37 indebtedness discharged in connection with the reacquisition after
38 December 31, 2008, and before January 1, 2011, of an applicable
39 debt instrument, as provided in Section 108(i) of the Internal
40 Revenue Code. Subtract from the adjusted gross income of any
41 taxpayer that added an amount to adjusted gross income in a
42 previous year the amount necessary to offset the amount included
2023 IN 359—LS 6854/DI 129 17
1 in federal gross income as a result of the deferral of income
2 arising from business indebtedness discharged in connection with
3 the reacquisition after December 31, 2008, and before January 1,
4 2011, of an applicable debt instrument, as provided in Section
5 108(i) of the Internal Revenue Code.
6 (10) Add an amount equal to any exempt insurance income under
7 Section 953(e) of the Internal Revenue Code that is active
8 financing income under Subpart F of Subtitle A, Chapter 1,
9 Subchapter N of the Internal Revenue Code.
10 (11) Add the amount excluded from federal gross income under
11 Section 103 of the Internal Revenue Code for interest received on
12 an obligation of a state other than Indiana, or a political
13 subdivision of such a state, that is acquired by the taxpayer after
14 December 31, 2011.
15 (12) For taxable years beginning after December 25, 2016, add:
16 (A) an amount equal to the amount reported by the taxpayer on
17 IRC 965 Transition Tax Statement, line 1; or
18 (B) if the taxpayer deducted an amount under Section 965(c)
19 of the Internal Revenue Code in determining the taxpayer's
20 taxable income for purposes of the federal income tax, the
21 amount deducted under Section 965(c) of the Internal Revenue
22 Code.
23 (13) Add an amount equal to the deduction that was claimed by
24 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
25 Internal Revenue Code (attributable to global intangible
26 low-taxed income). The taxpayer shall separately specify the
27 amount of the reduction under Section 250(a)(1)(B)(i) of the
28 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
29 Internal Revenue Code.
30 (14) Subtract any interest expense paid or accrued in the current
31 taxable year but not deducted as a result of the limitation imposed
32 under Section 163(j)(1) of the Internal Revenue Code. Add any
33 interest expense paid or accrued in a previous taxable year but
34 allowed as a deduction under Section 163 of the Internal Revenue
35 Code in the current taxable year. For purposes of this subdivision,
36 an interest expense is considered paid or accrued only in the first
37 taxable year the deduction would have been allowable under
38 Section 163 of the Internal Revenue Code if the limitation under
39 Section 163(j)(1) of the Internal Revenue Code did not exist.
40 (15) Subtract the amount that would have been excluded from
41 gross income but for the enactment of Section 118(b)(2) of the
42 Internal Revenue Code for taxable years ending after December
2023 IN 359—LS 6854/DI 129 18
1 22, 2017.
2 (16) Add an amount equal to the remainder of:
3 (A) the amount allowable as a deduction under Section 274(n)
4 of the Internal Revenue Code; minus
5 (B) the amount otherwise allowable as a deduction under
6 Section 274(n) of the Internal Revenue Code, if Section
7 274(n)(2)(D) of the Internal Revenue Code was not in effect
8 for amounts paid or incurred after December 31, 2020.
9 (17) For taxable years ending after March 12, 2020, subtract an
10 amount equal to the deduction disallowed pursuant to:
11 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
12 as modified by Sections 206 and 207 of the Taxpayer Certainty
13 and Disaster Relief Tax Act (Division EE of Public Law
14 116-260); and
15 (B) Section 3134(e) of the Internal Revenue Code.
16 (18) For taxable years beginning after December 31, 2022,
17 subtract an amount equal to the deduction disallowed under
18 Section 280C(h) of the Internal Revenue Code.
19 (19) Add or subtract any other amounts the taxpayer is:
20 (A) required to add or subtract; or
21 (B) entitled to deduct;
22 under IC 6-3-2.
23 (e) In the case of insurance companies subject to tax under Section
24 831 of the Internal Revenue Code and organized under Indiana law, the
25 same as "taxable income" (as defined in Section 832 of the Internal
26 Revenue Code), adjusted as follows:
27 (1) Subtract income that is exempt from taxation under this article
28 by the Constitution and statutes of the United States.
29 (2) Add an amount equal to any deduction allowed or allowable
30 under Section 170 of the Internal Revenue Code (concerning
31 charitable contributions).
32 (3) Add an amount equal to a deduction allowed or allowable
33 under Section 805 or Section 832(c) of the Internal Revenue Code
34 for taxes based on or measured by income and levied at the state
35 level by any state.
36 (4) Subtract an amount equal to the amount included in the
37 company's taxable income under Section 78 of the Internal
38 Revenue Code (concerning foreign tax credits).
39 (5) Add or subtract the amount necessary to make the adjusted
40 gross income of any taxpayer that owns property for which bonus
41 depreciation was allowed in the current taxable year or in an
42 earlier taxable year equal to the amount of adjusted gross income
2023 IN 359—LS 6854/DI 129 19
1 that would have been computed had an election not been made
2 under Section 168(k) of the Internal Revenue Code to apply bonus
3 depreciation to the property in the year that it was placed in
4 service.
5 (6) Add an amount equal to any deduction allowed under Section
6 172 of the Internal Revenue Code (concerning net operating
7 losses).
8 (7) Add or subtract the amount necessary to make the adjusted
9 gross income of any taxpayer that placed Section 179 property (as
10 defined in Section 179 of the Internal Revenue Code) in service
11 in the current taxable year or in an earlier taxable year equal to
12 the amount of adjusted gross income that would have been
13 computed had an election for federal income tax purposes not
14 been made for the year in which the property was placed in
15 service to take deductions under Section 179 of the Internal
16 Revenue Code in a total amount exceeding the sum of:
17 (A) twenty-five thousand dollars ($25,000) to the extent
18 deductions under Section 179 of the Internal Revenue Code
19 were not elected as provided in clause (B); and
20 (B) for taxable years beginning after December 31, 2017, the
21 deductions elected under Section 179 of the Internal Revenue
22 Code on property acquired in an exchange if:
23 (i) the exchange would have been eligible for
24 nonrecognition of gain or loss under Section 1031 of the
25 Internal Revenue Code in effect on January 1, 2017;
26 (ii) the exchange is not eligible for nonrecognition of gain or
27 loss under Section 1031 of the Internal Revenue Code; and
28 (iii) the taxpayer made an election to take deductions under
29 Section 179 of the Internal Revenue Code with regard to the
30 acquired property in the year that the property was placed
31 into service.
32 The amount of deductions allowable for an item of property
33 under this clause may not exceed the amount of adjusted gross
34 income realized on the property that would have been deferred
35 under the Internal Revenue Code in effect on January 1, 2017.
36 (8) Subtract income that is:
37 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
38 derived from patents); and
39 (B) included in the insurance company's taxable income under
40 the Internal Revenue Code.
41 (9) Add an amount equal to any income not included in gross
42 income as a result of the deferral of income arising from business
2023 IN 359—LS 6854/DI 129 20
1 indebtedness discharged in connection with the reacquisition after
2 December 31, 2008, and before January 1, 2011, of an applicable
3 debt instrument, as provided in Section 108(i) of the Internal
4 Revenue Code. Subtract from the adjusted gross income of any
5 taxpayer that added an amount to adjusted gross income in a
6 previous year the amount necessary to offset the amount included
7 in federal gross income as a result of the deferral of income
8 arising from business indebtedness discharged in connection with
9 the reacquisition after December 31, 2008, and before January 1,
10 2011, of an applicable debt instrument, as provided in Section
11 108(i) of the Internal Revenue Code.
12 (10) Add an amount equal to any exempt insurance income under
13 Section 953(e) of the Internal Revenue Code that is active
14 financing income under Subpart F of Subtitle A, Chapter 1,
15 Subchapter N of the Internal Revenue Code.
16 (11) Add the amount excluded from federal gross income under
17 Section 103 of the Internal Revenue Code for interest received on
18 an obligation of a state other than Indiana, or a political
19 subdivision of such a state, that is acquired by the taxpayer after
20 December 31, 2011.
21 (12) For taxable years beginning after December 25, 2016, add:
22 (A) an amount equal to the amount reported by the taxpayer on
23 IRC 965 Transition Tax Statement, line 1; or
24 (B) if the taxpayer deducted an amount under Section 965(c)
25 of the Internal Revenue Code in determining the taxpayer's
26 taxable income for purposes of the federal income tax, the
27 amount deducted under Section 965(c) of the Internal Revenue
28 Code.
29 (13) Add an amount equal to the deduction that was claimed by
30 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
31 Internal Revenue Code (attributable to global intangible
32 low-taxed income). The taxpayer shall separately specify the
33 amount of the reduction under Section 250(a)(1)(B)(i) of the
34 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
35 Internal Revenue Code.
36 (14) Subtract any interest expense paid or accrued in the current
37 taxable year but not deducted as a result of the limitation imposed
38 under Section 163(j)(1) of the Internal Revenue Code. Add any
39 interest expense paid or accrued in a previous taxable year but
40 allowed as a deduction under Section 163 of the Internal Revenue
41 Code in the current taxable year. For purposes of this subdivision,
42 an interest expense is considered paid or accrued only in the first
2023 IN 359—LS 6854/DI 129 21
1 taxable year the deduction would have been allowable under
2 Section 163 of the Internal Revenue Code if the limitation under
3 Section 163(j)(1) of the Internal Revenue Code did not exist.
4 (15) Subtract the amount that would have been excluded from
5 gross income but for the enactment of Section 118(b)(2) of the
6 Internal Revenue Code for taxable years ending after December
7 22, 2017.
8 (16) Add an amount equal to the remainder of:
9 (A) the amount allowable as a deduction under Section 274(n)
10 of the Internal Revenue Code; minus
11 (B) the amount otherwise allowable as a deduction under
12 Section 274(n) of the Internal Revenue Code, if Section
13 274(n)(2)(D) of the Internal Revenue Code was not in effect
14 for amounts paid or incurred after December 31, 2020.
15 (17) For taxable years ending after March 12, 2020, subtract an
16 amount equal to the deduction disallowed pursuant to:
17 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
18 as modified by Sections 206 and 207 of the Taxpayer Certainty
19 and Disaster Relief Tax Act (Division EE of Public Law
20 116-260); and
21 (B) Section 3134(e) of the Internal Revenue Code.
22 (18) For taxable years beginning after December 31, 2022,
23 subtract an amount equal to the deduction disallowed under
24 Section 280C(h) of the Internal Revenue Code.
25 (19) Add or subtract any other amounts the taxpayer is:
26 (A) required to add or subtract; or
27 (B) entitled to deduct;
28 under IC 6-3-2.
29 (f) In the case of trusts and estates, "taxable income" (as defined for
30 trusts and estates in Section 641(b) of the Internal Revenue Code)
31 adjusted as follows:
32 (1) Subtract income that is exempt from taxation under this article
33 by the Constitution and statutes of the United States.
34 (2) Subtract an amount equal to the amount of a September 11
35 terrorist attack settlement payment included in the federal
36 adjusted gross income of the estate of a victim of the September
37 11 terrorist attack or a trust to the extent the trust benefits a victim
38 of the September 11 terrorist attack.
39 (3) Add or subtract the amount necessary to make the adjusted
40 gross income of any taxpayer that owns property for which bonus
41 depreciation was allowed in the current taxable year or in an
42 earlier taxable year equal to the amount of adjusted gross income
2023 IN 359—LS 6854/DI 129 22
1 that would have been computed had an election not been made
2 under Section 168(k) of the Internal Revenue Code to apply bonus
3 depreciation to the property in the year that it was placed in
4 service.
5 (4) Add an amount equal to any deduction allowed under Section
6 172 of the Internal Revenue Code (concerning net operating
7 losses).
8 (5) Add or subtract the amount necessary to make the adjusted
9 gross income of any taxpayer that placed Section 179 property (as
10 defined in Section 179 of the Internal Revenue Code) in service
11 in the current taxable year or in an earlier taxable year equal to
12 the amount of adjusted gross income that would have been
13 computed had an election for federal income tax purposes not
14 been made for the year in which the property was placed in
15 service to take deductions under Section 179 of the Internal
16 Revenue Code in a total amount exceeding the sum of:
17 (A) twenty-five thousand dollars ($25,000) to the extent
18 deductions under Section 179 of the Internal Revenue Code
19 were not elected as provided in clause (B); and
20 (B) for taxable years beginning after December 31, 2017, the
21 deductions elected under Section 179 of the Internal Revenue
22 Code on property acquired in an exchange if:
23 (i) the exchange would have been eligible for
24 nonrecognition of gain or loss under Section 1031 of the
25 Internal Revenue Code in effect on January 1, 2017;
26 (ii) the exchange is not eligible for nonrecognition of gain or
27 loss under Section 1031 of the Internal Revenue Code; and
28 (iii) the taxpayer made an election to take deductions under
29 Section 179 of the Internal Revenue Code with regard to the
30 acquired property in the year that the property was placed
31 into service.
32 The amount of deductions allowable for an item of property
33 under this clause may not exceed the amount of adjusted gross
34 income realized on the property that would have been deferred
35 under the Internal Revenue Code in effect on January 1, 2017.
36 (6) Subtract income that is:
37 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
38 derived from patents); and
39 (B) included in the taxpayer's taxable income under the
40 Internal Revenue Code.
41 (7) Add an amount equal to any income not included in gross
42 income as a result of the deferral of income arising from business
2023 IN 359—LS 6854/DI 129 23
1 indebtedness discharged in connection with the reacquisition after
2 December 31, 2008, and before January 1, 2011, of an applicable
3 debt instrument, as provided in Section 108(i) of the Internal
4 Revenue Code. Subtract from the adjusted gross income of any
5 taxpayer that added an amount to adjusted gross income in a
6 previous year the amount necessary to offset the amount included
7 in federal gross income as a result of the deferral of income
8 arising from business indebtedness discharged in connection with
9 the reacquisition after December 31, 2008, and before January 1,
10 2011, of an applicable debt instrument, as provided in Section
11 108(i) of the Internal Revenue Code.
12 (8) Add the amount excluded from federal gross income under
13 Section 103 of the Internal Revenue Code for interest received on
14 an obligation of a state other than Indiana, or a political
15 subdivision of such a state, that is acquired by the taxpayer after
16 December 31, 2011.
17 (9) For taxable years beginning after December 25, 2016, add an
18 amount equal to:
19 (A) the amount reported by the taxpayer on IRC 965
20 Transition Tax Statement, line 1;
21 (B) if the taxpayer deducted an amount under Section 965(c)
22 of the Internal Revenue Code in determining the taxpayer's
23 taxable income for purposes of the federal income tax, the
24 amount deducted under Section 965(c) of the Internal Revenue
25 Code; and
26 (C) with regard to any amounts of income under Section 965
27 of the Internal Revenue Code distributed by the taxpayer, the
28 deduction under Section 965(c) of the Internal Revenue Code
29 attributable to such distributed amounts and not reported to the
30 beneficiary.
31 For purposes of this article, the amount required to be added back
32 under clause (B) is not considered to be distributed or
33 distributable to a beneficiary of the estate or trust for purposes of
34 Sections 651 and 661 of the Internal Revenue Code.
35 (10) Subtract any interest expense paid or accrued in the current
36 taxable year but not deducted as a result of the limitation imposed
37 under Section 163(j)(1) of the Internal Revenue Code. Add any
38 interest expense paid or accrued in a previous taxable year but
39 allowed as a deduction under Section 163 of the Internal Revenue
40 Code in the current taxable year. For purposes of this subdivision,
41 an interest expense is considered paid or accrued only in the first
42 taxable year the deduction would have been allowable under
2023 IN 359—LS 6854/DI 129 24
1 Section 163 of the Internal Revenue Code if the limitation under
2 Section 163(j)(1) of the Internal Revenue Code did not exist.
3 (11) Add an amount equal to the deduction for qualified business
4 income that was claimed by the taxpayer for the taxable year
5 under Section 199A of the Internal Revenue Code.
6 (12) Subtract the amount that would have been excluded from
7 gross income but for the enactment of Section 118(b)(2) of the
8 Internal Revenue Code for taxable years ending after December
9 22, 2017.
10 (13) Add an amount equal to the remainder of:
11 (A) the amount allowable as a deduction under Section 274(n)
12 of the Internal Revenue Code; minus
13 (B) the amount otherwise allowable as a deduction under
14 Section 274(n) of the Internal Revenue Code, if Section
15 274(n)(2)(D) of the Internal Revenue Code was not in effect
16 for amounts paid or incurred after December 31, 2020.
17 (14) For taxable years beginning after December 31, 2017, and
18 before January 1, 2021, add an amount equal to the excess
19 business loss of the taxpayer as defined in Section 461(l)(3) of the
20 Internal Revenue Code. In addition:
21 (A) If a taxpayer has an excess business loss under this
22 subdivision and also has modifications under subdivisions (3)
23 and (5) for property placed in service during the taxable year,
24 the taxpayer shall treat a portion of the taxable year
25 modifications for that property as occurring in the taxable year
26 the property is placed in service and a portion of the
27 modifications as occurring in the immediately following
28 taxable year.
29 (B) 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 in which the property
32 is placed in service equals:
33 (i) the modification for the property otherwise determined
34 under this section; minus
35 (ii) the excess business loss disallowed under this
36 subdivision;
37 but not less than zero (0).
38 (C) The portion of the modifications under subdivisions (3)
39 and (5) for property placed in service during the taxable year
40 treated as occurring in the taxable year immediately following
41 the taxable year in which the property is placed in service
42 equals the modification for the property otherwise determined
2023 IN 359—LS 6854/DI 129 25
1 under this section minus the amount in clause (B).
2 (D) Any reallocation of modifications between taxable years
3 under clauses (B) and (C) shall be first allocated to the
4 modification under subdivision (3), then to the modification
5 under subdivision (5).
6 (15) 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 (16) 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 (17) 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 (g) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(17) may not
21 be construed to require an add back or allow a deduction or exemption
22 more than once for a particular add back, deduction, or exemption.
23 (h) For taxable years beginning after December 25, 2016, if:
24 (1) a taxpayer is a shareholder, either directly or indirectly, in a
25 corporation that is an E&P deficit foreign corporation as defined
26 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
27 earnings and profit deficit, or a portion of the earnings and profit
28 deficit, of the E&P deficit foreign corporation is permitted to
29 reduce the federal adjusted gross income or federal taxable
30 income of the taxpayer, the deficit, or the portion of the deficit,
31 shall also reduce the amount taxable under this section to the
32 extent permitted under the Internal Revenue Code, however, in no
33 case shall this permit a reduction in the amount taxable under
34 Section 965 of the Internal Revenue Code for purposes of this
35 section to be less than zero (0); and
36 (2) the Internal Revenue Service issues guidance that such an
37 income or deduction is not reported directly on a federal tax
38 return or is to be reported in a manner different than specified in
39 this section, this section shall be construed as if federal adjusted
40 gross income or federal taxable income included the income or
41 deduction.
42 (i) If a partner is required to include an item of income, a deduction,
2023 IN 359—LS 6854/DI 129 26
1 or another tax attribute in the partner's adjusted gross income tax return
2 pursuant to IC 6-3-4.5, such item shall be considered to be includible
3 in the partner's federal adjusted gross income or federal taxable
4 income, regardless of whether such item is actually required to be
5 reported by the partner for federal income tax purposes. For purposes
6 of this subsection:
7 (1) items for which a valid election is made under IC 6-3-4.5-6,
8 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
9 in the partner's adjusted gross income or taxable income; and
10 (2) items for which the partnership did not make an election under
11 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
12 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
13 shall be included in the partner's adjusted gross income or taxable
14 income.
15 SECTION 3. IC 6-3-2-6, AS AMENDED BY P.L.146-2020,
16 SECTION 23, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JANUARY 1, 2024]: Sec. 6. (a) Each taxable year, an individual who
18 rents a dwelling for use as the individual's principal place of residence
19 may deduct from the individual's adjusted gross income (as defined in
20 IC 6-3-1-3.5(a)), the lesser of:
21 (1) the amount of rent paid by the individual with respect to the
22 dwelling during the taxable year; or
23 (2) three four thousand dollars ($3,000). ($4,000).
24 (b) Notwithstanding subsection (a):
25 (1) a married couple filing a joint return for a particular taxable
26 year may not claim a deduction under this section of more than
27 three four thousand dollars ($3,000); ($4,000); and
28 (2) a married individual filing a separate return for a particular
29 taxable year may not claim a deduction under this section of more
30 than one two thousand five hundred dollars ($1,500). ($2,000).
31 (c) The deduction provided by this section does not apply to an
32 individual who rents a dwelling that is exempt from Indiana property
33 tax.
34 (d) For purposes of this section, a "dwelling" includes a single
35 family dwelling and unit of a multi-family dwelling.
36 SECTION 4. [EFFECTIVE JANUARY 1, 2024] (a) IC 6-3-1-3.5
37 and IC 6-3-2-6, both as amended by this act, apply to taxable years
38 beginning after December 31, 2023.
39 (b) This SECTION expires January 1, 2028.
2023 IN 359—LS 6854/DI 129