Introduced Version
SENATE BILL No. 98
_____
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, 2024 (retroactive).
Zay
January 8, 2024, read first time and referred to Committee on Tax and Fiscal Policy.
2024 IN 98—LS 6259/DI 120 Introduced
Second Regular Session of the 123rd General Assembly (2024)
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 2023 Regular Session of the General Assembly.
SENATE BILL No. 98
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.236-2023,
2 SECTION 63, AND AS AMENDED BY P.L.194-2023, SECTION 7,
3 AND AS AMENDED BY P.L.201-2023, SECTION 94, AND AS
4 AMENDED BY P.L.202-2023, SECTION 7, AND AS AMENDED BY
5 THE TECHNICAL CORRECTIONS BILL OF THE 2024 GENERAL
6 ASSEMBLY, IS CORRECTED AND AMENDED TO READ AS
7 FOLLOWS [EFFECTIVE JANUARY 1, 2024 (RETROACTIVE)]:
8 Sec. 3.5. When used in this article, the term "adjusted gross income"
9 shall mean the following:
10 (a) In the case of all individuals, "adjusted gross income" (as
11 defined in Section 62 of the Internal Revenue Code), modified as
12 follows:
13 (1) Subtract income that is exempt from taxation under this article
14 by the Constitution and statutes of the United States.
15 (2) Except as provided in subsection (c), add an amount equal to
16 any deduction or deductions allowed or allowable pursuant to
17 Section 62 of the Internal Revenue Code for taxes based on or
2024 IN 98—LS 6259/DI 120 2
1 measured by income and levied at the state level by any state of
2 the United States.
3 (3) Subtract one thousand dollars ($1,000), or in the case of a
4 joint return filed by a husband and wife, subtract for each spouse
5 one thousand dollars ($1,000).
6 (4) Subtract one thousand dollars ($1,000) for:
7 (A) each of the exemptions provided by Section 151(c) of the
8 Internal Revenue Code (as effective January 1, 2017), except
9 that a fetus (as defined in IC 16-18-2-128.7) is considered
10 a dependent child for purposes of this exemption if the
11 taxpayer provides the information required under
12 IC 6-3-2-27;
13 (B) each additional amount allowable under Section 63(f) of
14 the Internal Revenue Code; and
15 (C) the spouse of the taxpayer if a separate return is made by
16 the taxpayer and if the spouse, for the calendar year in which
17 the taxable year of the taxpayer begins, has no gross income
18 and is not the dependent of another taxpayer.
19 (5) Subtract each of the following:
20 (A) One thousand five hundred dollars ($1,500) for each of the
21 exemptions allowed under Section 151(c)(1)(B) of the Internal
22 Revenue Code (as effective January 1, 2004), except that in
23 the first taxable year in which a particular exemption is
24 allowed under Section 151(c)(1)(B) of the Internal Revenue
25 Code (as effective January 1, 2004), subtract three thousand
26 dollars ($3,000) for that exemption, and except that a fetus
27 (as defined in IC 16-18-2-128.7) is considered a dependent
28 child for purposes of this exemption if the taxpayer
29 provides the information required under IC 6-3-2-27.
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,
2024 IN 98—LS 6259/DI 120 3
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
2024 IN 98—LS 6259/DI 120 4
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 thousand five hundred dollars ($2,500), or one
9 thousand two hundred fifty dollars ($1,250) in the case of a
10 married individual filing a separate return; or
11 (B) the amount of property taxes that are paid during the
12 taxable year in Indiana by the individual on the individual's
13 principal place of residence.
14 (14) Subtract an amount equal to the amount of a September 11
15 terrorist attack settlement payment included in the individual's
16 federal adjusted gross income.
17 (15) Add or subtract the amount necessary to make the adjusted
18 gross income of any taxpayer that owns property for which bonus
19 depreciation was allowed in the current taxable year or in an
20 earlier taxable year equal to the amount of adjusted gross income
21 that would have been computed had an election not been made
22 under Section 168(k) of the Internal Revenue Code to apply bonus
23 depreciation to the property in the year that it was placed in
24 service.
25 (16) Add an amount equal to any deduction allowed under
26 Section 172 of the Internal Revenue Code (concerning net
27 operating losses).
28 (17) Add or subtract the amount necessary to make the adjusted
29 gross income of any taxpayer that placed Section 179 property (as
30 defined in Section 179 of the Internal Revenue Code) in service
31 in the current taxable year or in an earlier taxable year equal to
32 the amount of adjusted gross income that would have been
33 computed had an election for federal income tax purposes not
34 been made for the year in which the property was placed in
35 service to take deductions under Section 179 of the Internal
36 Revenue Code in a total amount exceeding the sum of:
37 (A) twenty-five thousand dollars ($25,000) to the extent
38 deductions under Section 179 of the Internal Revenue Code
39 were not elected as provided in clause (B); and
40 (B) for taxable years beginning after December 31, 2017, the
41 deductions elected under Section 179 of the Internal Revenue
42 Code on property acquired in an exchange if:
2024 IN 98—LS 6259/DI 120 5
1 (i) the exchange would have been eligible for
2 nonrecognition of gain or loss under Section 1031 of the
3 Internal Revenue Code in effect on January 1, 2017;
4 (ii) the exchange is not eligible for nonrecognition of gain or
5 loss under Section 1031 of the Internal Revenue Code; and
6 (iii) the taxpayer made an election to take deductions under
7 Section 179 of the Internal Revenue Code with regard to the
8 acquired property in the year that the property was placed
9 into service.
10 The amount of deductions allowable for an item of property
11 under this clause may not exceed the amount of adjusted gross
12 income realized on the property that would have been deferred
13 under the Internal Revenue Code in effect on January 1, 2017.
14 (18) Subtract an amount equal to the amount of the taxpayer's
15 qualified military income that was not excluded from the
16 taxpayer's gross income for federal income tax purposes under
17 Section 112 of the Internal Revenue Code.
18 (19) Subtract income that is:
19 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
20 derived from patents); and
21 (B) included in the individual's federal adjusted gross income
22 under the Internal Revenue Code.
23 (20) Add an amount equal to any income not included in gross
24 income as a result of the deferral of income arising from business
25 indebtedness discharged in connection with the reacquisition after
26 December 31, 2008, and before January 1, 2011, of an applicable
27 debt instrument, as provided in Section 108(i) of the Internal
28 Revenue Code. Subtract the amount necessary from the adjusted
29 gross income of any taxpayer that added an amount to adjusted
30 gross income in a previous year to offset the amount included in
31 federal gross income as a result of the deferral of income arising
32 from business indebtedness discharged in connection with the
33 reacquisition after December 31, 2008, and before January 1,
34 2011, of an applicable debt instrument, as provided in Section
35 108(i) of the Internal Revenue Code.
36 (21) Add the amount excluded from federal gross income under
37 Section 103 of the Internal Revenue Code for interest received on
38 an obligation of a state other than Indiana, or a political
39 subdivision of such a state, that is acquired by the taxpayer after
40 December 31, 2011. For purposes of this subdivision:
41 (A) if the taxpayer receives interest from a pass through entity,
42 a regulated investment company, a hedge fund, or similar
2024 IN 98—LS 6259/DI 120 6
1 arrangement, the taxpayer will be considered to have
2 acquired the obligation on the date the entity acquired the
3 obligation;
4 (B) if ownership of the obligation occurs by means other than
5 a purchase, the date of acquisition of the obligation shall be
6 the date ownership of the obligation was transferred, except
7 to the extent provided in clause (A), and if a portion of the
8 obligation is acquired on multiple dates, the date of
9 acquisition shall be considered separately for each portion of
10 the obligation; and
11 (C) if ownership of the obligation occurred as the result of a
12 refinancing of another obligation, the acquisition date shall be
13 the date on which the obligation was refinanced.
14 (22) Subtract an amount as described in Section 1341(a)(2) of the
15 Internal Revenue Code to the extent, if any, that the amount was
16 previously included in the taxpayer's adjusted gross income for a
17 prior taxable year.
18 (23) For taxable years beginning after December 25, 2016, add an
19 amount equal to the deduction for deferred foreign income that
20 was claimed by the taxpayer for the taxable year under Section
21 965(c) of the Internal Revenue Code.
22 (24) Subtract any interest expense paid or accrued in the current
23 taxable year but not deducted as a result of the limitation imposed
24 under Section 163(j)(1) of the Internal Revenue Code. Add any
25 interest expense paid or accrued in a previous taxable year but
26 allowed as a deduction under Section 163 of the Internal Revenue
27 Code in the current taxable year. For purposes of this subdivision,
28 an interest expense is considered paid or accrued only in the first
29 taxable year the deduction would have been allowable under
30 Section 163 of the Internal Revenue Code if the limitation under
31 Section 163(j)(1) of the Internal Revenue Code did not exist.
32 (25) Subtract the amount that would have been excluded from
33 gross income but for the enactment of Section 118(b)(2) of the
34 Internal Revenue Code for taxable years ending after December
35 22, 2017.
36 (26) For taxable years beginning after December 31, 2019, and
37 before January 1, 2021, add an amount of the deduction claimed
38 under Section 62(a)(22) of the Internal Revenue Code.
39 (27) For taxable years beginning after December 31, 2019, for
40 payments made by an employer under an education assistance
41 program after March 27, 2020:
42 (A) add the amount of payments by an employer that are
2024 IN 98—LS 6259/DI 120 7
1 excluded from the taxpayer's federal gross income under
2 Section 127(c)(1)(B) of the Internal Revenue Code; and
3 (B) deduct the interest allowable under Section 221 of the
4 Internal Revenue Code, if the disallowance under Section
5 221(e)(1) of the Internal Revenue Code did not apply to the
6 payments described in clause (A). For purposes of applying
7 Section 221(b) of the Internal Revenue Code to the amount
8 allowable under this clause, the amount under clause (A) shall
9 not be added to adjusted gross income.
10 (28) 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 (29) 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 (15)
23 and (17) 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 (15)
30 and (17) 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 (15)
39 and (17) 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
2024 IN 98—LS 6259/DI 120 8
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 (15), then to the modification
5 under subdivision (17).
6 (30) Add an amount equal to the amount excluded from federal
7 gross income under Section 108(f)(5) of the Internal Revenue
8 Code. For purposes of this subdivision:
9 (A) if an amount excluded under Section 108(f)(5) of the
10 Internal Revenue Code would be excludible under Section
11 108(a)(1)(B) of the Internal Revenue Code, the exclusion
12 under Section 108(a)(1)(B) of the Internal Revenue Code shall
13 take precedence; and
14 (B) if an amount would have been excludible under Section
15 108(f)(5) of the Internal Revenue Code as in effect on January
16 1, 2020, the amount is not required to be added back under this
17 subdivision.
18 (31) For taxable years ending after March 12, 2020, subtract an
19 amount equal to the deduction disallowed pursuant to:
20 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
21 as modified by Sections 206 and 207 of the Taxpayer Certainty
22 and Disaster Relief Tax Act (Division EE of Public Law
23 116-260); and
24 (B) Section 3134(e) of the Internal Revenue Code.
25 (32) Subtract the amount of an ESA annual grant amount and, as
26 applicable, a CSA annual grant amount distributed to a taxpayer's
27 Indiana education scholarship account under IC 20-51.4-4-2
28 IC 20-51.4 that is used for a an ESA or CSA qualified expense (as
29 defined in IC 20-51.4-2-9) IC 20-51.4-2) or to an Indiana
30 enrichment scholarship account under IC 20-52 that is used for
31 qualified expenses (as defined in IC 20-52-2-6), to the extent the
32 distribution used for the qualified expense is included in the
33 taxpayer's federal adjusted gross income under the Internal
34 Revenue Code.
35 (33) For taxable years beginning after December 31, 2019, and
36 before January 1, 2021, add an amount equal to the amount of
37 unemployment compensation excluded from federal gross income
38 under Section 85(c) of the Internal Revenue Code.
39 (34) For taxable years beginning after December 31, 2022,
40 subtract an amount equal to the deduction disallowed under
41 Section 280C(h) of the Internal Revenue Code.
42 (35) For taxable years beginning after December 31, 2021, add
2024 IN 98—LS 6259/DI 120 9
1 or subtract amounts related to specified research or experimental
2 procedures as required under IC 6-3-2-29.
3 (35) (36) Subtract any other amounts the taxpayer is entitled to
4 deduct under IC 6-3-2.
5 (36) (37) Subtract the amount of a CSA annual grant amount
6 distributed to a taxpayer's career scholarship account under
7 IC 20-51.4-4.5 that is used for a CSA qualified expense (as
8 defined in IC 20-51.4-2-3.8), to the extent the distribution used
9 for the CSA qualified expense is included in the taxpayer's federal
10 adjusted gross income under the Internal Revenue Code.
11 (b) In the case of corporations, the same as "taxable income" (as
12 defined in Section 63 of the Internal Revenue Code) adjusted as
13 follows:
14 (1) Subtract income that is exempt from taxation under this article
15 by the Constitution and statutes of the United States.
16 (2) Add an amount equal to any deduction or deductions allowed
17 or allowable pursuant to Section 170 of the Internal Revenue
18 Code (concerning charitable contributions).
19 (3) Except as provided in subsection (c), add an amount equal to
20 any deduction or deductions allowed or allowable pursuant to
21 Section 63 of the Internal Revenue Code for taxes based on or
22 measured by income and levied at the state level by any state of
23 the United States.
24 (4) Subtract an amount equal to the amount included in the
25 corporation's taxable income under Section 78 of the Internal
26 Revenue Code (concerning foreign tax credits).
27 (5) Add or subtract the amount necessary to make the adjusted
28 gross income of any taxpayer that owns property for which bonus
29 depreciation was allowed in the current taxable year or in an
30 earlier taxable year equal to the amount of adjusted gross income
31 that would have been computed had an election not been made
32 under Section 168(k) of the Internal Revenue Code to apply bonus
33 depreciation to the property in the year that it was placed in
34 service.
35 (6) Add an amount equal to any deduction allowed under Section
36 172 of the Internal Revenue Code (concerning net operating
37 losses).
38 (7) Add or subtract the amount necessary to make the adjusted
39 gross income of any taxpayer that placed Section 179 property (as
40 defined in Section 179 of the Internal Revenue Code) in service
41 in the current taxable year or in an earlier taxable year equal to
42 the amount of adjusted gross income that would have been
2024 IN 98—LS 6259/DI 120 10
1 computed had an election for federal income tax purposes not
2 been made for the year in which the property was placed in
3 service to take deductions under Section 179 of the Internal
4 Revenue Code in a total amount exceeding the sum of:
5 (A) twenty-five thousand dollars ($25,000) to the extent
6 deductions under Section 179 of the Internal Revenue Code
7 were not elected as provided in clause (B); and
8 (B) for taxable years beginning after December 31, 2017, the
9 deductions elected under Section 179 of the Internal Revenue
10 Code on property acquired in an exchange if:
11 (i) the exchange would have been eligible for
12 nonrecognition of gain or loss under Section 1031 of the
13 Internal Revenue Code in effect on January 1, 2017;
14 (ii) the exchange is not eligible for nonrecognition of gain or
15 loss under Section 1031 of the Internal Revenue Code; and
16 (iii) the taxpayer made an election to take deductions under
17 Section 179 of the Internal Revenue Code with regard to the
18 acquired property in the year that the property was placed
19 into service.
20 The amount of deductions allowable for an item of property
21 under this clause may not exceed the amount of adjusted gross
22 income realized on the property that would have been deferred
23 under the Internal Revenue Code in effect on January 1, 2017.
24 (8) Add to the extent required by IC 6-3-2-20:
25 (A) the amount of intangible expenses (as defined in
26 IC 6-3-2-20) for the taxable year that reduced the corporation's
27 taxable income (as defined in Section 63 of the Internal
28 Revenue Code) for federal income tax purposes; and
29 (B) any directly related interest expenses (as defined in
30 IC 6-3-2-20) that reduced the corporation's adjusted gross
31 income (determined without regard to this subdivision). For
32 purposes of this clause, any directly related interest expense
33 that constitutes business interest within the meaning of Section
34 163(j) of the Internal Revenue Code shall be considered to
35 have reduced the taxpayer's federal taxable income only in the
36 first taxable year in which the deduction otherwise would have
37 been allowable under Section 163 of the Internal Revenue
38 Code if the limitation under Section 163(j)(1) of the Internal
39 Revenue Code did not exist.
40 (9) Add an amount equal to any deduction for dividends paid (as
41 defined in Section 561 of the Internal Revenue Code) to
42 shareholders of a captive real estate investment trust (as defined
2024 IN 98—LS 6259/DI 120 11
1 in section 34.5 of this chapter).
2 (10) Subtract income that is:
3 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
4 derived from patents); and
5 (B) included in the corporation's taxable income under the
6 Internal Revenue Code.
7 (11) Add an amount equal to any income not included in gross
8 income as a result of the deferral of income arising from business
9 indebtedness discharged in connection with the reacquisition after
10 December 31, 2008, and before January 1, 2011, of an applicable
11 debt instrument, as provided in Section 108(i) of the Internal
12 Revenue Code. Subtract from the adjusted gross income of any
13 taxpayer that added an amount to adjusted gross income in a
14 previous year the amount necessary to offset the amount included
15 in federal gross income as a result of the deferral of income
16 arising from business indebtedness discharged in connection with
17 the reacquisition after December 31, 2008, and before January 1,
18 2011, of an applicable debt instrument, as provided in Section
19 108(i) of the Internal Revenue Code.
20 (12) Add the amount excluded from federal gross income under
21 Section 103 of the Internal Revenue Code for interest received on
22 an obligation of a state other than Indiana, or a political
23 subdivision of such a state, that is acquired by the taxpayer after
24 December 31, 2011. For purposes of this subdivision:
25 (A) if the taxpayer receives interest from a pass through entity,
26 a regulated investment company, a hedge fund, or similar
27 arrangement, the taxpayer will be considered to have
28 acquired the obligation on the date the entity acquired the
29 obligation;
30 (B) if ownership of the obligation occurs by means other than
31 a purchase, the date of acquisition of the obligation shall be
32 the date ownership of the obligation was transferred, except
33 to the extent provided in clause (A), and if a portion of the
34 obligation is acquired on multiple dates, the date of
35 acquisition shall be considered separately for each portion of
36 the obligation; and
37 (C) if ownership of the obligation occurred as the result of a
38 refinancing of another obligation, the acquisition date shall be
39 the date on which the obligation was refinanced.
40 (13) For taxable years beginning after December 25, 2016:
41 (A) for a corporation other than a real estate investment trust,
42 add:
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1 (i) an amount equal to the amount reported by the taxpayer
2 on IRC 965 Transition Tax Statement, line 1; or
3 (ii) if the taxpayer deducted an amount under Section 965(c)
4 of the Internal Revenue Code in determining the taxpayer's
5 taxable income for purposes of the federal income tax, the
6 amount deducted under Section 965(c) of the Internal
7 Revenue Code; and
8 (B) for a real estate investment trust, add an amount equal to
9 the deduction for deferred foreign income that was claimed by
10 the taxpayer for the taxable year under Section 965(c) of the
11 Internal Revenue Code, but only to the extent that the taxpayer
12 included income pursuant to Section 965 of the Internal
13 Revenue Code in its taxable income for federal income tax
14 purposes or is required to add back dividends paid under
15 subdivision (9).
16 (14) Add an amount equal to the deduction that was claimed by
17 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
18 Internal Revenue Code (attributable to global intangible
19 low-taxed income). The taxpayer shall separately specify the
20 amount of the reduction under Section 250(a)(1)(B)(i) of the
21 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
22 Internal Revenue Code.
23 (15) Subtract any interest expense paid or accrued in the current
24 taxable year but not deducted as a result of the limitation imposed
25 under Section 163(j)(1) of the Internal Revenue Code. Add any
26 interest expense paid or accrued in a previous taxable year but
27 allowed as a deduction under Section 163 of the Internal Revenue
28 Code in the current taxable year. For purposes of this subdivision,
29 an interest expense is considered paid or accrued only in the first
30 taxable year the deduction would have been allowable under
31 Section 163 of the Internal Revenue Code if the limitation under
32 Section 163(j)(1) of the Internal Revenue Code did not exist.
33 (16) Subtract the amount that would have been excluded from
34 gross income but for the enactment of Section 118(b)(2) of the
35 Internal Revenue Code for taxable years ending after December
36 22, 2017.
37 (17) Add an amount equal to the remainder of:
38 (A) the amount allowable as a deduction under Section 274(n)
39 of the Internal Revenue Code; minus
40 (B) the amount otherwise allowable as a deduction under
41 Section 274(n) of the Internal Revenue Code, if Section
42 274(n)(2)(D) of the Internal Revenue Code was not in effect
2024 IN 98—LS 6259/DI 120 13
1 for amounts paid or incurred after December 31, 2020.
2 (18) For taxable years ending after March 12, 2020, subtract an
3 amount equal to the deduction disallowed pursuant to:
4 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
5 as modified by Sections 206 and 207 of the Taxpayer Certainty
6 and Disaster Relief Tax Act (Division EE of Public Law
7 116-260); and
8 (B) Section 3134(e) of the Internal Revenue Code.
9 (19) For taxable years beginning after December 31, 2022,
10 subtract an amount equal to the deduction disallowed under
11 Section 280C(h) of the Internal Revenue Code.
12 (20) For taxable years beginning after December 31, 2021,
13 subtract the amount of any:
14 (A) federal, state, or local grant received by the taxpayer; and
15 (B) discharged federal, state, or local indebtedness incurred
16 by the taxpayer;
17 for purposes of providing or expanding access to broadband
18 service in this state.
19 (21) For taxable years beginning after December 31, 2021, add
20 or subtract amounts related to specified research or experimental
21 procedures as required under IC 6-3-2-29.
22 (20) (22) Add or subtract any other amounts the taxpayer is:
23 (A) required to add or subtract; or
24 (B) entitled to deduct;
25 under IC 6-3-2.
26 (c) The following apply to taxable years beginning after December
27 31, 2018, for purposes of the add back of any deduction allowed on the
28 taxpayer's federal income tax return for wagering taxes, as provided in
29 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
30 the taxpayer is a corporation:
31 (1) For taxable years beginning after December 31, 2018, and
32 before January 1, 2020, a taxpayer is required to add back under
33 this section eighty-seven and five-tenths percent (87.5%) of any
34 deduction allowed on the taxpayer's federal income tax return for
35 wagering taxes.
36 (2) For taxable years beginning after December 31, 2019, and
37 before January 1, 2021, a taxpayer is required to add back under
38 this section seventy-five percent (75%) of any deduction allowed
39 on the taxpayer's federal income tax return for wagering taxes.
40 (3) For taxable years beginning after December 31, 2020, and
41 before January 1, 2022, a taxpayer is required to add back under
42 this section sixty-two and five-tenths percent (62.5%) of any
2024 IN 98—LS 6259/DI 120 14
1 deduction allowed on the taxpayer's federal income tax return for
2 wagering taxes.
3 (4) For taxable years beginning after December 31, 2021, and
4 before January 1, 2023, a taxpayer is required to add back under
5 this section fifty percent (50%) of any deduction allowed on the
6 taxpayer's federal income tax return for wagering taxes.
7 (5) For taxable years beginning after December 31, 2022, and
8 before January 1, 2024, a taxpayer is required to add back under
9 this section thirty-seven and five-tenths percent (37.5%) of any
10 deduction allowed on the taxpayer's federal income tax return for
11 wagering taxes.
12 (6) For taxable years beginning after December 31, 2023, and
13 before January 1, 2025, a taxpayer is required to add back under
14 this section twenty-five percent (25%) of any deduction allowed
15 on the taxpayer's federal income tax return for wagering taxes.
16 (7) For taxable years beginning after December 31, 2024, and
17 before January 1, 2026, a taxpayer is required to add back under
18 this section twelve and five-tenths percent (12.5%) of any
19 deduction allowed on the taxpayer's federal income tax return for
20 wagering taxes.
21 (8) For taxable years beginning after December 31, 2025, a
22 taxpayer is not required to add back under this section any amount
23 of a deduction allowed on the taxpayer's federal income tax return
24 for wagering taxes.
25 (d) In the case of life insurance companies (as defined in Section
26 816(a) of the Internal Revenue Code) that are organized under Indiana
27 law, the same as "life insurance company taxable income" (as defined
28 in Section 801 of the Internal Revenue Code), adjusted as follows:
29 (1) Subtract income that is exempt from taxation under this article
30 by the Constitution and statutes of the United States.
31 (2) Add an amount equal to any deduction allowed or allowable
32 under Section 170 of the Internal Revenue Code (concerning
33 charitable contributions).
34 (3) Add an amount equal to a deduction allowed or allowable
35 under Section 805 or Section 832(c) of the Internal Revenue Code
36 for taxes based on or measured by income and levied at the state
37 level by any state.
38 (4) Subtract an amount equal to the amount included in the
39 company's taxable income under Section 78 of the Internal
40 Revenue Code (concerning foreign tax credits).
41 (5) Add or subtract the amount necessary to make the adjusted
42 gross income of any taxpayer that owns property for which bonus
2024 IN 98—LS 6259/DI 120 15
1 depreciation was allowed in the current taxable year or in an
2 earlier taxable year equal to the amount of adjusted gross income
3 that would have been computed had an election not been made
4 under Section 168(k) of the Internal Revenue Code to apply bonus
5 depreciation to the property in the year that it was placed in
6 service.
7 (6) Add an amount equal to any deduction allowed under Section
8 172 of the Internal Revenue Code (concerning net operating
9 losses).
10 (7) Add or subtract the amount necessary to make the adjusted
11 gross income of any taxpayer that placed Section 179 property (as
12 defined in Section 179 of the Internal Revenue Code) in service
13 in the current taxable year or in an earlier taxable year equal to
14 the amount of adjusted gross income that would have been
15 computed had an election for federal income tax purposes not
16 been made for the year in which the property was placed in
17 service to take deductions under Section 179 of the Internal
18 Revenue Code in a total amount exceeding the sum of:
19 (A) twenty-five thousand dollars ($25,000) to the extent
20 deductions under Section 179 of the Internal Revenue Code
21 were not elected as provided in clause (B); and
22 (B) for taxable years beginning after December 31, 2017, the
23 deductions elected under Section 179 of the Internal Revenue
24 Code on property acquired in an exchange if:
25 (i) the exchange would have been eligible for
26 nonrecognition of gain or loss under Section 1031 of the
27 Internal Revenue Code in effect on January 1, 2017;
28 (ii) the exchange is not eligible for nonrecognition of gain or
29 loss under Section 1031 of the Internal Revenue Code; and
30 (iii) the taxpayer made an election to take deductions under
31 Section 179 of the Internal Revenue Code with regard to the
32 acquired property in the year that the property was placed
33 into service.
34 The amount of deductions allowable for an item of property
35 under this clause may not exceed the amount of adjusted gross
36 income realized on the property that would have been deferred
37 under the Internal Revenue Code in effect on January 1, 2017.
38 (8) Subtract income that is:
39 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
40 derived from patents); and
41 (B) included in the insurance company's taxable income under
42 the Internal Revenue Code.
2024 IN 98—LS 6259/DI 120 16
1 (9) Add an amount equal to any income not included in gross
2 income as a result of the deferral of income arising from business
3 indebtedness discharged in connection with the reacquisition after
4 December 31, 2008, and before January 1, 2011, of an applicable
5 debt instrument, as provided in Section 108(i) of the Internal
6 Revenue Code. Subtract from the adjusted gross income of any
7 taxpayer that added an amount to adjusted gross income in a
8 previous year the amount necessary to offset the amount included
9 in federal gross income as a result of the deferral of income
10 arising from business indebtedness discharged in connection with
11 the reacquisition after December 31, 2008, and before January 1,
12 2011, of an applicable debt instrument, as provided in Section
13 108(i) of the Internal Revenue Code.
14 (10) Add an amount equal to any exempt insurance income under
15 Section 953(e) of the Internal Revenue Code that is active
16 financing income under Subpart F of Subtitle A, Chapter 1,
17 Subchapter N of the Internal Revenue Code.
18 (11) Add the amount excluded from federal gross income under
19 Section 103 of the Internal Revenue Code for interest received on
20 an obligation of a state other than Indiana, or a political
21 subdivision of such a state, that is acquired by the taxpayer after
22 December 31, 2011. For purposes of this subdivision:
23 (A) if the taxpayer receives interest from a pass through entity,
24 a regulated investment company, a hedge fund, or similar
25 arrangement, the taxpayer will be considered to have
26 acquired the obligation on the date the entity acquired the
27 obligation;
28 (B) if ownership of the obligation occurs by means other than
29 a purchase, the date of acquisition of the obligation shall be
30 the date ownership of the obligation was transferred, except
31 to the extent provided in clause (A), and if a portion of the
32 obligation is acquired on multiple dates, the date of
33 acquisition shall be considered separately for each portion of
34 the obligation; and
35 (C) if ownership of the obligation occurred as the result of a
36 refinancing of another obligation, the acquisition date shall be
37 the date on which the obligation was refinanced.
38 (12) For taxable years beginning after December 25, 2016, add:
39 (A) an amount equal to the amount reported by the taxpayer on
40 IRC 965 Transition Tax Statement, line 1; or
41 (B) if the taxpayer deducted an amount under Section 965(c)
42 of the Internal Revenue Code in determining the taxpayer's
2024 IN 98—LS 6259/DI 120 17
1 taxable income for purposes of the federal income tax, the
2 amount deducted under Section 965(c) of the Internal Revenue
3 Code.
4 (13) Add an amount equal to the deduction that was claimed by
5 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
6 Internal Revenue Code (attributable to global intangible
7 low-taxed income). The taxpayer shall separately specify the
8 amount of the reduction under Section 250(a)(1)(B)(i) of the
9 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
10 Internal Revenue Code.
11 (14) Subtract any interest expense paid or accrued in the current
12 taxable year but not deducted as a result of the limitation imposed
13 under Section 163(j)(1) of the Internal Revenue Code. Add any
14 interest expense paid or accrued in a previous taxable year but
15 allowed as a deduction under Section 163 of the Internal Revenue
16 Code in the current taxable year. For purposes of this subdivision,
17 an interest expense is considered paid or accrued only in the first
18 taxable year the deduction would have been allowable under
19 Section 163 of the Internal Revenue Code if the limitation under
20 Section 163(j)(1) of the Internal Revenue Code did not exist.
21 (15) Subtract the amount that would have been excluded from
22 gross income but for the enactment of Section 118(b)(2) of the
23 Internal Revenue Code for taxable years ending after December
24 22, 2017.
25 (16) Add an amount equal to the remainder of:
26 (A) the amount allowable as a deduction under Section 274(n)
27 of the Internal Revenue Code; minus
28 (B) the amount otherwise allowable as a deduction under
29 Section 274(n) of the Internal Revenue Code, if Section
30 274(n)(2)(D) of the Internal Revenue Code was not in effect
31 for amounts paid or incurred after December 31, 2020.
32 (17) For taxable years ending after March 12, 2020, subtract an
33 amount equal to the deduction disallowed pursuant to:
34 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
35 as modified by Sections 206 and 207 of the Taxpayer Certainty
36 and Disaster Relief Tax Act (Division EE of Public Law
37 116-260); and
38 (B) Section 3134(e) of the Internal Revenue Code.
39 (18) For taxable years beginning after December 31, 2022,
40 subtract an amount equal to the deduction disallowed under
41 Section 280C(h) of the Internal Revenue Code.
42 (19) For taxable years beginning after December 31, 2021, add
2024 IN 98—LS 6259/DI 120 18
1 or subtract amounts related to specified research or experimental
2 procedures as required under IC 6-3-2-29.
3 (19) (20) Add or subtract any other amounts the taxpayer is:
4 (A) required to add or subtract; or
5 (B) entitled to deduct;
6 under IC 6-3-2.
7 (e) In the case of insurance companies subject to tax under Section
8 831 of the Internal Revenue Code and organized under Indiana law, the
9 same as "taxable income" (as defined in Section 832 of the Internal
10 Revenue Code), adjusted as follows:
11 (1) Subtract income that is exempt from taxation under this article
12 by the Constitution and statutes of the United States.
13 (2) Add an amount equal to any deduction allowed or allowable
14 under Section 170 of the Internal Revenue Code (concerning
15 charitable contributions).
16 (3) Add an amount equal to a deduction allowed or allowable
17 under Section 805 or Section 832(c) of the Internal Revenue Code
18 for taxes based on or measured by income and levied at the state
19 level by any state.
20 (4) Subtract an amount equal to the amount included in the
21 company's taxable income under Section 78 of the Internal
22 Revenue Code (concerning foreign tax credits).
23 (5) Add or subtract the amount necessary to make the adjusted
24 gross income of any taxpayer that owns property for which bonus
25 depreciation was allowed in the current taxable year or in an
26 earlier taxable year equal to the amount of adjusted gross income
27 that would have been computed had an election not been made
28 under Section 168(k) of the Internal Revenue Code to apply bonus
29 depreciation to the property in the year that it was placed in
30 service.
31 (6) Add an amount equal to any deduction allowed under Section
32 172 of the Internal Revenue Code (concerning net operating
33 losses).
34 (7) Add or subtract the amount necessary to make the adjusted
35 gross income of any taxpayer that placed Section 179 property (as
36 defined in Section 179 of the Internal Revenue Code) in service
37 in the current taxable year or in an earlier taxable year equal to
38 the amount of adjusted gross income that would have been
39 computed had an election for federal income tax purposes not
40 been made for the year in which the property was placed in
41 service to take deductions under Section 179 of the Internal
42 Revenue Code in a total amount exceeding the sum of:
2024 IN 98—LS 6259/DI 120 19
1 (A) twenty-five thousand dollars ($25,000) to the extent
2 deductions under Section 179 of the Internal Revenue Code
3 were not elected as provided in clause (B); and
4 (B) for taxable years beginning after December 31, 2017, the
5 deductions elected under Section 179 of the Internal Revenue
6 Code on property acquired in an exchange if:
7 (i) the exchange would have been eligible for
8 nonrecognition of gain or loss under Section 1031 of the
9 Internal Revenue Code in effect on January 1, 2017;
10 (ii) the exchange is not eligible for nonrecognition of gain or
11 loss under Section 1031 of the Internal Revenue Code; and
12 (iii) the taxpayer made an election to take deductions under
13 Section 179 of the Internal Revenue Code with regard to the
14 acquired property in the year that the property was placed
15 into service.
16 The amount of deductions allowable for an item of property
17 under this clause may not exceed the amount of adjusted gross
18 income realized on the property that would have been deferred
19 under the Internal Revenue Code in effect on January 1, 2017.
20 (8) Subtract income that is:
21 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
22 derived from patents); and
23 (B) included in the insurance company's taxable income under
24 the Internal Revenue Code.
25 (9) Add an amount equal to any income not included in gross
26 income as a result of the deferral of income arising from business
27 indebtedness discharged in connection with the reacquisition after
28 December 31, 2008, and before January 1, 2011, of an applicable
29 debt instrument, as provided in Section 108(i) of the Internal
30 Revenue Code. Subtract from the adjusted gross income of any
31 taxpayer that added an amount to adjusted gross income in a
32 previous year the amount necessary to offset the amount included
33 in federal gross income as a result of the deferral of income
34 arising from business indebtedness discharged in connection with
35 the reacquisition after December 31, 2008, and before January 1,
36 2011, of an applicable debt instrument, as provided in Section
37 108(i) of the Internal Revenue Code.
38 (10) Add an amount equal to any exempt insurance income under
39 Section 953(e) of the Internal Revenue Code that is active
40 financing income under Subpart F of Subtitle A, Chapter 1,
41 Subchapter N of the Internal Revenue Code.
42 (11) Add the amount excluded from federal gross income under
2024 IN 98—LS 6259/DI 120 20
1 Section 103 of the Internal Revenue Code for interest received on
2 an obligation of a state other than Indiana, or a political
3 subdivision of such a state, that is acquired by the taxpayer after
4 December 31, 2011. For purposes of this subdivision:
5 (A) if the taxpayer receives interest from a pass through entity,
6 a regulated investment company, a hedge fund, or similar
7 arrangement, the taxpayer will be considered to have
8 acquired the obligation on the date the entity acquired the
9 obligation;
10 (B) if ownership of the obligation occurs by means other than
11 a purchase, the date of acquisition of the obligation shall be
12 the date ownership of the obligation was transferred, except
13 to the extent provided in clause (A), and if a portion of the
14 obligation is acquired on multiple dates, the date of
15 acquisition shall be considered separately for each portion of
16 the obligation; and
17 (C) if ownership of the obligation occurred as the result of a
18 refinancing of another obligation, the acquisition date shall be
19 the date on which the obligation was refinanced.
20 (12) For taxable years beginning after December 25, 2016, add:
21 (A) an amount equal to the amount reported by the taxpayer on
22 IRC 965 Transition Tax Statement, line 1; or
23 (B) if the taxpayer deducted an amount under Section 965(c)
24 of the Internal Revenue Code in determining the taxpayer's
25 taxable income for purposes of the federal income tax, the
26 amount deducted under Section 965(c) of the Internal Revenue
27 Code.
28 (13) Add an amount equal to the deduction that was claimed by
29 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
30 Internal Revenue Code (attributable to global intangible
31 low-taxed income). The taxpayer shall separately specify the
32 amount of the reduction under Section 250(a)(1)(B)(i) of the
33 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
34 Internal Revenue Code.
35 (14) 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
2024 IN 98—LS 6259/DI 120 21
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 (15) Subtract the amount that would have been excluded from
4 gross income but for the enactment of Section 118(b)(2) of the
5 Internal Revenue Code for taxable years ending after December
6 22, 2017.
7 (16) Add an amount equal to the remainder of:
8 (A) the amount allowable as a deduction under Section 274(n)
9 of the Internal Revenue Code; minus
10 (B) the amount otherwise allowable as a deduction under
11 Section 274(n) of the Internal Revenue Code, if Section
12 274(n)(2)(D) of the Internal Revenue Code was not in effect
13 for amounts paid or incurred after December 31, 2020.
14 (17) For taxable years ending after March 12, 2020, subtract an
15 amount equal to the deduction disallowed pursuant to:
16 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
17 as modified by Sections 206 and 207 of the Taxpayer Certainty
18 and Disaster Relief Tax Act (Division EE of Public Law
19 116-260); and
20 (B) Section 3134(e) of the Internal Revenue Code.
21 (18) For taxable years beginning after December 31, 2022,
22 subtract an amount equal to the deduction disallowed under
23 Section 280C(h) of the Internal Revenue Code.
24 (19) For taxable years beginning after December 31, 2021, add
25 or subtract amounts related to specified research or experimental
26 procedures as required under IC 6-3-2-29.
27 (19) (20) Add or subtract any other amounts the taxpayer is:
28 (A) required to add or subtract; or
29 (B) entitled to deduct;
30 under IC 6-3-2.
31 (f) In the case of trusts and estates, "taxable income" (as defined for
32 trusts and estates in Section 641(b) of the Internal Revenue Code)
33 adjusted as follows:
34 (1) Subtract income that is exempt from taxation under this article
35 by the Constitution and statutes of the United States.
36 (2) Subtract an amount equal to the amount of a September 11
37 terrorist attack settlement payment included in the federal
38 adjusted gross income of the estate of a victim of the September
39 11 terrorist attack or a trust to the extent the trust benefits a victim
40 of the September 11 terrorist attack.
41 (3) Add or subtract the amount necessary to make the adjusted
42 gross income of any taxpayer that owns property for which bonus
2024 IN 98—LS 6259/DI 120 22
1 depreciation was allowed in the current taxable year or in an
2 earlier taxable year equal to the amount of adjusted gross income
3 that would have been computed had an election not been made
4 under Section 168(k) of the Internal Revenue Code to apply bonus
5 depreciation to the property in the year that it was placed in
6 service.
7 (4) Add an amount equal to any deduction allowed under Section
8 172 of the Internal Revenue Code (concerning net operating
9 losses).
10 (5) Add or subtract the amount necessary to make the adjusted
11 gross income of any taxpayer that placed Section 179 property (as
12 defined in Section 179 of the Internal Revenue Code) in service
13 in the current taxable year or in an earlier taxable year equal to
14 the amount of adjusted gross income that would have been
15 computed had an election for federal income tax purposes not
16 been made for the year in which the property was placed in
17 service to take deductions under Section 179 of the Internal
18 Revenue Code in a total amount exceeding the sum of:
19 (A) twenty-five thousand dollars ($25,000) to the extent
20 deductions under Section 179 of the Internal Revenue Code
21 were not elected as provided in clause (B); and
22 (B) for taxable years beginning after December 31, 2017, the
23 deductions elected under Section 179 of the Internal Revenue
24 Code on property acquired in an exchange if:
25 (i) the exchange would have been eligible for
26 nonrecognition of gain or loss under Section 1031 of the
27 Internal Revenue Code in effect on January 1, 2017;
28 (ii) the exchange is not eligible for nonrecognition of gain or
29 loss under Section 1031 of the Internal Revenue Code; and
30 (iii) the taxpayer made an election to take deductions under
31 Section 179 of the Internal Revenue Code with regard to the
32 acquired property in the year that the property was placed
33 into service.
34 The amount of deductions allowable for an item of property
35 under this clause may not exceed the amount of adjusted gross
36 income realized on the property that would have been deferred
37 under the Internal Revenue Code in effect on January 1, 2017.
38 (6) Subtract income that is:
39 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
40 derived from patents); and
41 (B) included in the taxpayer's taxable income under the
42 Internal Revenue Code.
2024 IN 98—LS 6259/DI 120 23
1 (7) Add an amount equal to any income not included in gross
2 income as a result of the deferral of income arising from business
3 indebtedness discharged in connection with the reacquisition after
4 December 31, 2008, and before January 1, 2011, of an applicable
5 debt instrument, as provided in Section 108(i) of the Internal
6 Revenue Code. Subtract from the adjusted gross income of any
7 taxpayer that added an amount to adjusted gross income in a
8 previous year the amount necessary to offset the amount included
9 in federal gross income as a result of the deferral of income
10 arising from business indebtedness discharged in connection with
11 the reacquisition after December 31, 2008, and before January 1,
12 2011, of an applicable debt instrument, as provided in Section
13 108(i) of the Internal Revenue Code.
14 (8) Add the amount excluded from federal gross income under
15 Section 103 of the Internal Revenue Code for interest received on
16 an obligation of a state other than Indiana, or a political
17 subdivision of such a state, that is acquired by the taxpayer after
18 December 31, 2011. For purposes of this subdivision:
19 (A) if the taxpayer receives interest from a pass through entity,
20 a regulated investment company, a hedge fund, or similar
21 arrangement, the taxpayer will be considered to have
22 acquired the obligation on the date the entity acquired the
23 obligation;
24 (B) if ownership of the obligation occurs by means other than
25 a purchase, the date of acquisition of the obligation shall be
26 the date ownership of the obligation was transferred, except
27 to the extent provided in clause (A), and if a portion of the
28 obligation is acquired on multiple dates, the date of
29 acquisition shall be considered separately for each portion of
30 the obligation; and
31 (C) if ownership of the obligation occurred as the result of a
32 refinancing of another obligation, the acquisition date shall be
33 the date on which the obligation was refinanced.
34 (9) For taxable years beginning after December 25, 2016, add an
35 amount equal to:
36 (A) the amount reported by the taxpayer on IRC 965
37 Transition Tax Statement, line 1;
38 (B) 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 Revenue
42 Code; and
2024 IN 98—LS 6259/DI 120 24
1 (C) with regard to any amounts of income under Section 965
2 of the Internal Revenue Code distributed by the taxpayer, the
3 deduction under Section 965(c) of the Internal Revenue Code
4 attributable to such distributed amounts and not reported to the
5 beneficiary.
6 For purposes of this article, the amount required to be added back
7 under clause (B) is not considered to be distributed or
8 distributable to a beneficiary of the estate or trust for purposes of
9 Sections 651 and 661 of the Internal Revenue Code.
10 (10) Subtract any interest expense paid or accrued in the current
11 taxable year but not deducted as a result of the limitation imposed
12 under Section 163(j)(1) of the Internal Revenue Code. Add any
13 interest expense paid or accrued in a previous taxable year but
14 allowed as a deduction under Section 163 of the Internal Revenue
15 Code in the current taxable year. For purposes of this subdivision,
16 an interest expense is considered paid or accrued only in the first
17 taxable year the deduction would have been allowable under
18 Section 163 of the Internal Revenue Code if the limitation under
19 Section 163(j)(1) of the Internal Revenue Code did not exist.
20 (11) Add an amount equal to the deduction for qualified business
21 income that was claimed by the taxpayer for the taxable year
22 under Section 199A of the Internal Revenue Code.
23 (12) Subtract the amount that would have been excluded from
24 gross income but for the enactment of Section 118(b)(2) of the
25 Internal Revenue Code for taxable years ending after December
26 22, 2017.
27 (13) Add an amount equal to the remainder of:
28 (A) the amount allowable as a deduction under Section 274(n)
29 of the Internal Revenue Code; minus
30 (B) the amount otherwise allowable as a deduction under
31 Section 274(n) of the Internal Revenue Code, if Section
32 274(n)(2)(D) of the Internal Revenue Code was not in effect
33 for amounts paid or incurred after December 31, 2020.
34 (14) For taxable years beginning after December 31, 2017, and
35 before January 1, 2021, add an amount equal to the excess
36 business loss of the taxpayer as defined in Section 461(l)(3) of the
37 Internal Revenue Code. In addition:
38 (A) If a taxpayer has an excess business loss under this
39 subdivision and also has modifications under subdivisions (3)
40 and (5) for property placed in service during the taxable year,
41 the taxpayer shall treat a portion of the taxable year
42 modifications for that property as occurring in the taxable year
2024 IN 98—LS 6259/DI 120 25
1 the property is placed in service and a portion of the
2 modifications as occurring in the immediately following
3 taxable year.
4 (B) The portion of the modifications under subdivisions (3)
5 and (5) for property placed in service during the taxable year
6 treated as occurring in the taxable year in which the property
7 is placed in service equals:
8 (i) the modification for the property otherwise determined
9 under this section; minus
10 (ii) the excess business loss disallowed under this
11 subdivision;
12 but not less than zero (0).
13 (C) The portion of the modifications under subdivisions (3)
14 and (5) for property placed in service during the taxable year
15 treated as occurring in the taxable year immediately following
16 the taxable year in which the property is placed in service
17 equals the modification for the property otherwise determined
18 under this section minus the amount in clause (B).
19 (D) Any reallocation of modifications between taxable years
20 under clauses (B) and (C) shall be first allocated to the
21 modification under subdivision (3), then to the modification
22 under subdivision (5).
23 (15) For taxable years ending after March 12, 2020, subtract an
24 amount equal to the deduction disallowed pursuant to:
25 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
26 as modified by Sections 206 and 207 of the Taxpayer Certainty
27 and Disaster Relief Tax Act (Division EE of Public Law
28 116-260); and
29 (B) Section 3134(e) of the Internal Revenue Code.
30 (16) For taxable years beginning after December 31, 2022,
31 subtract an amount equal to the deduction disallowed under
32 Section 280C(h) of the Internal Revenue Code.
33 (17) Except as provided in subsection (c), for taxable years
34 beginning after December 31, 2022, add an amount equal to any
35 deduction or deductions allowed or allowable in determining
36 taxable income under Section 641(b) of the Internal Revenue
37 Code for taxes based on or measured by income and levied at the
38 state level by any state of the United States.
39 (18) For taxable years beginning after December 31, 2021, add
40 or subtract amounts related to specified research or experimental
41 procedures as required under IC 6-3-2-29.
42 (18) (19) Add or subtract any other amounts the taxpayer is:
2024 IN 98—LS 6259/DI 120 26
1 (A) required to add or subtract; or
2 (B) entitled to deduct;
3 under IC 6-3-2.
4 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
5 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
6 "adjusted gross income" of a pass through entity means the aggregate
7 of items of ordinary income and loss in the case of a partnership or a
8 corporation described in IC 6-3-2-2.8(2), or aggregate distributable net
9 income of a trust or estate as defined in Section 643 of the Internal
10 Revenue Code, distributions subject to tax for state and federal income
11 tax for beneficiaries in the case of a trust or estate, whichever is
12 applicable, for the taxable year modified as follows:
13 (1) Add the separately stated items of income and gains, or the
14 equivalent items that must be considered separately by a
15 beneficiary, as determined for federal purposes, attributed to the
16 partners, shareholders, or beneficiaries of the pass through entity,
17 determined without regard to whether the owner is permitted to
18 exclude all or part of the income or gain or deduct any amount
19 against the income or gain.
20 (2) Subtract the separately stated items of deductions or losses or
21 items that must be considered separately by beneficiaries, as
22 determined for federal purposes, attributed to partners,
23 shareholders, or beneficiaries of the pass through entity and that
24 are deductible by an individual in determining adjusted gross
25 income as defined under Section 62 of the Internal Revenue
26 Code:
27 (A) limited as if the partners, shareholders, and beneficiaries
28 deducted the maximum allowable loss or deduction allowable
29 for the taxable year prior to any amount deductible from the
30 pass through entity; but
31 (B) not considering any disallowance of deductions resulting
32 from federal basis limitations for the partner, shareholder, or
33 beneficiary.
34 (3) Add or subtract any modifications to adjusted gross income
35 that would be required both for individuals under subsection (a)
36 and corporations under subsection (b) to the extent otherwise
37 provided in those subsections, including amounts that are
38 allowable for which such modifications are necessary to account
39 for separately stated items in subdivision (1) or (2).
40 (h) Subsections (a)(35), (b)(20), (d)(19), (e)(19), or (f)(18) (a)(36),
41 (b)(22), (d)(20), (e)(20), or (f)(19) may not be construed to require an
42 add back or allow a deduction or exemption more than once for a
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1 particular add back, deduction, or exemption.
2 (i) For taxable years beginning after December 25, 2016, if:
3 (1) a taxpayer is a shareholder, either directly or indirectly, in a
4 corporation that is an E&P deficit foreign corporation as defined
5 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
6 earnings and profit deficit, or a portion of the earnings and profit
7 deficit, of the E&P deficit foreign corporation is permitted to
8 reduce the federal adjusted gross income or federal taxable
9 income of the taxpayer, the deficit, or the portion of the deficit,
10 shall also reduce the amount taxable under this section to the
11 extent permitted under the Internal Revenue Code, however, in no
12 case shall this permit a reduction in the amount taxable under
13 Section 965 of the Internal Revenue Code for purposes of this
14 section to be less than zero (0); and
15 (2) the Internal Revenue Service issues guidance that such an
16 income or deduction is not reported directly on a federal tax
17 return or is to be reported in a manner different than specified in
18 this section, this section shall be construed as if federal adjusted
19 gross income or federal taxable income included the income or
20 deduction.
21 (j) If a partner is required to include an item of income, a deduction,
22 or another tax attribute in the partner's adjusted gross income tax return
23 pursuant to IC 6-3-4.5, such item shall be considered to be includible
24 in the partner's federal adjusted gross income or federal taxable
25 income, regardless of whether such item is actually required to be
26 reported by the partner for federal income tax purposes. For purposes
27 of this subsection:
28 (1) items for which a valid election is made under IC 6-3-4.5-6,
29 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
30 in the partner's adjusted gross income or taxable income; and
31 (2) items for which the partnership did not make an election under
32 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
33 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
34 shall be included in the partner's adjusted gross income or taxable
35 income.
36 (k) The following apply for purposes of this section:
37 (1) For purposes of subsections (b) and (f), if a taxpayer is an
38 organization that has more than one (1) trade or business subject
39 to the provisions of Section 512(a)(6) of the Internal Revenue
40 Code, the following rules apply for taxable years beginning after
41 December 31, 2017:
42 (A) If a trade or business has federal unrelated business
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1 taxable income of zero (0) or greater for a taxable year, the
2 unrelated business taxable income and modifications required
3 under this section shall be combined in determining the
4 adjusted gross income of the taxpayer and shall not be treated
5 as being subject to the provisions of Section 512(a)(6) of the
6 Internal Revenue Code if one (1) or more trades or businesses
7 have negative Indiana adjusted gross income after
8 adjustments.
9 (B) If a trade or business has federal unrelated business
10 taxable income of less than zero (0) for a taxable year, the
11 taxpayer shall apply the modifications under this section for
12 the taxable year against the net operating loss in the manner
13 required under IC 6-3-2-2.5 and IC 6-3-2-2.6 for separately
14 stated net operating losses. However, if the application of
15 modifications required under IC 6-3-2-2.5 or IC 6-3-2-2.6
16 results in the separately stated net operating loss for the trade
17 or business being zero (0), the modifications that increase
18 adjusted gross income under this section and remain after the
19 calculations to adjust the separately stated net operating loss
20 to zero (0) that result from the trade or business must be
21 treated as modifications to which clause (A) applies for the
22 taxable year.
23 (C) If a trade or business otherwise described in Section
24 512(a)(6) of the Internal Revenue Code incurred a net
25 operating loss for a taxable year beginning after December
26 31, 2017, and before January 1, 2021, and the net operating
27 loss was carried back for federal tax purposes:
28 (i) if the loss was carried back to a taxable year for which
29 the requirements under Section 512(a)(6) of the Internal
30 Revenue Code did not apply, the portion of the loss and
31 modifications attributable to the loss shall be treated as
32 adjusted gross income of the taxpayer for the first taxable
33 year of the taxpayer beginning after December 31, 2022,
34 and shall be treated as part of the adjusted gross income
35 attributable to clause (A), unless, and to the extent, the loss
36 and modifications were applied to adjusted gross income for
37 a previous taxable year, as determined under this article;
38 and
39 (ii) if the loss was carried back to a taxable year for which
40 the requirements under Section 512(a)(6) of the Internal
41 Revenue Code applied, the portion of the loss and
42 modifications attributable to the loss shall be treated as
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1 adjusted gross income of the taxpayer for the first taxable
2 year of the taxpayer beginning after December 31, 2022,
3 and for purposes of this clause, the inclusion of losses and
4 modifications shall be in the same manner as provided in
5 clause (B), unless, and to the extent, the loss and
6 modifications were applied to adjusted gross income for a
7 previous taxable year, as determined under this article.
8 (D) Notwithstanding any provision in this subdivision, if a
9 taxpayer computed its adjusted gross income for a taxable
10 year beginning before January 1, 2023, based on a reasonable
11 interpretation of this article, the taxpayer shall be permitted
12 to compute its adjusted gross income for those taxable years
13 based on that interpretation. However, a taxpayer must
14 continue to report any tax attributes for taxable years
15 beginning after December 31, 2022, in a manner consistent
16 with its previous interpretation.
17 (2) In the case of a corporation, other than a captive real estate
18 investment trust, for which the adjusted gross income under this
19 article is determined after a deduction for dividends paid under
20 the Internal Revenue Code, the modifications required under this
21 section shall be applied in ratio to the corporation's taxable
22 income (as defined in Section 63 of the Internal Revenue Code)
23 after deductions for dividends paid under the Internal Revenue
24 Code compared to the corporation's taxable income (as defined
25 in Section 63 of the Internal Revenue Code) before the deduction
26 for dividends paid under the Internal Revenue Code.
27 (3) In the case of a trust or estate, the trust or estate is required
28 to include only the portion of the modifications not passed
29 through to beneficiaries.
30 (4) In the case of a taxpayer for which modifications are required
31 to be applied against a separately stated net operating loss under
32 IC 6-3-2-2.5 or IC 6-3-2-2.6, the modifications required under
33 this section must be adjusted to reflect the required application
34 of the modifications against a separately stated net operating
35 loss, in order to avoid the application of a particular
36 modification multiple times.
37 SECTION 2. IC 6-3-2-27 IS ADDED TO THE INDIANA CODE
38 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
39 JANUARY 1, 2024 (RETROACTIVE)]: Sec. 27. For a fetus to be
40 considered a dependent child for purposes of the exemptions in
41 IC 6-3-1-3.5(a)(4)(A) and IC 6-3-1-3.5(a)(5)(A), a taxpayer must
42 submit a report from a radiologic imaging study reflecting the
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1 taxpayer's pregnancy during the taxable year with the taxpayer's
2 annual state tax return or returns in the manner prescribed by the
3 department.
4 SECTION 3. [EFFECTIVE JANUARY 1, 2024 (RETROACTIVE)]
5 (a) IC 6-3-1-3.5, as amended by this act, and IC 6-3-2-27, as added
6 by this act, apply to taxable years beginning after December 31,
7 2023.
8 (b) This SECTION expires July 1, 2027.
9 SECTION 4. An emergency is declared for this act.
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