Introduced Version
HOUSE BILL No. 1524
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3.1-41.2.
Synopsis: Tax credit for contributions to qualified nonprofits. Provides
a state tax credit (credit) for contributions made to a qualified nonprofit
organization for taxable years beginning after December 31, 2025.
Provides that the amount allowable as a credit in a taxable year is equal
to the lesser of: (1) the total amount of the contributions made by the
taxpayer to one or more qualified nonprofit organizations; or (2) 50%
of the taxpayer's state tax liability. Provides that the maximum amount
of credits that may be awarded in a state fiscal year may not exceed
$1,000,000.
Effective: July 1, 2025.
Sweet
January 21, 2025, read first time and referred to Committee on Ways and Means.
2025 IN 1524—LS 7674/DI 134 Introduced
First Regular Session of the 124th General Assembly (2025)
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HOUSE BILL No. 1524
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 6-3.1-41.2 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]:
4 Chapter 41.2. Qualified Nonprofit Donation Tax Credit
5 Sec. 1. This chapter applies only to taxable years beginning after
6 December 31, 2025.
7 Sec. 2. As used in this chapter, "credit" refers to a credit
8 granted under this chapter.
9 Sec. 3. As used in this chapter, "pass through entity" has the
10 meaning set forth in IC 6-3-1-35.
11 Sec. 4. As used in this chapter, "qualified nonprofit
12 organization" means an organization that is:
13 (1) exempt from federal income taxation under Section
14 501(c)(3) of the Internal Revenue Code; and
15 (2) organized and operated for any of the following:
16 (A) Recovery residential services.
17 (B) Foster placement services.
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1 (C) Pregnancy resource services.
2 (D) Addiction recovery services.
3 Sec. 5. As used in this chapter, "state tax liability" means a
4 taxpayer's total tax liability that is incurred under:
5 (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
6 (2) IC 6-5.5 (the financial institutions tax); and
7 (3) IC 27-1-18-2 (the insurance premiums tax);
8 as computed after the application of the credits that under
9 IC 6-3.1-1-2 are to be applied before the credit provided by this
10 chapter.
11 Sec. 6. As used in this chapter, "taxpayer" means an individual
12 or entity that has any state tax liability.
13 Sec. 7. Subject to the limitations provided by this chapter, at the
14 election of the taxpayer a credit is allowed against the taxpayer's
15 state tax liability for the taxable year in which the taxpayer makes
16 a contribution to a qualified nonprofit organization.
17 Sec. 8. The amount allowable as a credit under this chapter for
18 any taxable year is equal to the lesser of:
19 (1) the total amount of the contributions made by the taxpayer
20 to one (1) or more qualified nonprofit organizations; or
21 (2) fifty percent (50%) of the taxpayer's state tax liability.
22 Sec. 9. (a) A qualified nonprofit organization receiving a
23 contribution that will be used as the basis for a tax credit under
24 this chapter must provide to the department by August 1 of each
25 year the following information regarding the qualified nonprofit
26 organization's use of the contributions received under this chapter:
27 (1) The name of the qualified nonprofit organization.
28 (2) The total number and total dollar amount of contributions
29 received during the previous taxable year.
30 (3) A description of each use or purpose for which the
31 contributions were spent.
32 (4) A copy of the qualified nonprofit organization's annual
33 financial audit.
34 In addition, the qualified nonprofit organization shall make the
35 annual financial audit available to a member of the public upon
36 request. The information provided under this subsection is a public
37 record.
38 (b) The report must be certified under penalties of perjury by
39 the chief executive officer of the qualified nonprofit organization.
40 Sec. 10. (a) Subject to section 1 of this chapter, if the credit
41 provided by this chapter exceeds the taxpayer's state tax liability
42 for the taxable year for which the credit is first claimed, the excess
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1 may be carried forward to succeeding taxable years and used as a
2 credit against the taxpayer's state tax liability during those taxable
3 years. Each time the credit is carried forward to a succeeding
4 taxable year, the credit is reduced by the amount that was used as
5 a credit during the immediately preceding taxable year.
6 (b) A taxpayer is not entitled to a carryback or refund of any
7 unused credit.
8 Sec. 11. If a pass through entity is entitled to a credit under this
9 chapter but does not have state tax liability against which the tax
10 credit may be applied, a shareholder, partner, or member of the
11 pass through entity is entitled to a tax credit equal to:
12 (1) the tax credit determined for the pass through entity for
13 the taxable year; multiplied by
14 (2) the percentage of the pass through entity's distributive
15 income to which the shareholder, partner, or member is
16 entitled.
17 Sec. 12. To apply a credit against the taxpayer's state tax
18 liability, a taxpayer must claim the credit on the taxpayer's annual
19 state tax return or returns in the manner prescribed by the
20 department. The taxpayer shall submit to the department the
21 information that the department determines is necessary for the
22 department to determine whether the taxpayer is eligible for the
23 credit.
24 Sec. 13. The total amount of tax credits awarded under this
25 chapter may not exceed one million dollars ($1,000,000) each state
26 fiscal year.
27 Sec. 14. The department, on a website used by the department
28 to provide information to the public, shall provide the following
29 information:
30 (1) The form the department prescribes for claiming the
31 credit provided by this chapter.
32 (2) A timeline for receiving the credit provided by this
33 chapter.
34 (3) The total amount of credits awarded under this chapter
35 during the current state fiscal year.
36 Sec. 15. A taxpayer claiming a credit for a contribution under
37 this chapter may not claim a credit for the same contribution
38 under any other law.
2025 IN 1524—LS 7674/DI 134