Introduced Version
HOUSE BILL No. 1544
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3.1-35.6.
Synopsis: Tax credit for public school foundation. Provides a 25%
state tax credit for contributions made to a public school foundation for
taxable years beginning after December 31, 2025, and before January
1, 2028. Provides that the amount allowable as a credit in a taxable year
may not exceed: (1) $1,000 in the case of an individual filing a single
return or a corporation; or (2) $2,000 in the case of a married couple
filing a joint return. 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.
Heaton, Heine, Pfaff, Hamilton
January 21, 2025, read first time and referred to Committee on Ways and Means.
2025 IN 1544—LS 6683/DI 134 Introduced
First Regular Session of the 124th General Assembly (2025)
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HOUSE BILL No. 1544
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 6-3.1-35.6 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]:
4 Chapter 35.6. Public School Foundation Contribution Tax
5 Credit
6 Sec. 1. This chapter applies only to taxable years beginning after
7 December 31, 2025, and before January 1, 2028.
8 Sec. 2. As used in this chapter, "credit" refers to a credit
9 granted under this chapter.
10 Sec. 3. As used in this chapter, "pass through entity" has the
11 meaning set forth in IC 6-3-1-35.
12 Sec. 4. As used in this chapter, "public elementary school or
13 public secondary school" means any Indiana public school or
14 school corporation, including a charter school (as defined in
15 IC 20-24-1-4), that offers any combination of grades from
16 kindergarten through grade 12.
17 Sec. 5. As used in this chapter, "public school foundation"
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1 means a nonprofit organization that is:
2 (1) exempt from federal income taxation under Section
3 501(c)(3) of the Internal Revenue Code; and
4 (2) organized and operated solely for the benefit of an Indiana
5 public elementary school or public secondary school.
6 The term includes a public school foundation established under
7 IC 20-26-5-22.5.
8 Sec. 6. As used in this chapter, "state tax liability" means a
9 taxpayer's total tax liability that is incurred under:
10 (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
11 (2) IC 6-5.5 (the financial institutions tax); and
12 (3) IC 27-1-18-2 (the insurance premiums tax);
13 as computed after the application of the credits that under
14 IC 6-3.1-1-2 are to be applied before the credit provided by this
15 chapter.
16 Sec. 7. As used in this chapter, "taxpayer" means an individual
17 or entity that has any state tax liability.
18 Sec. 8. (a) At the election of the taxpayer, a credit is allowed
19 against the taxpayer's state tax liability for the taxable year in
20 which the taxpayer makes a contribution to a public school
21 foundation. Subject to the limitations provided by this chapter, the
22 amount of the credit for a taxable year is equal to twenty-five
23 percent (25%) of the total amount of the contributions made by the
24 taxpayer.
25 (b) The amount allowable as a credit under this section for any
26 taxable year may not exceed:
27 (1) one thousand dollars ($1,000) in the case of:
28 (A) an individual filing a single return; or
29 (B) a corporation; or
30 (2) two thousand dollars ($2,000) in the case of a married
31 couple filing a joint return.
32 Sec. 9. (a) A public school foundation receiving a contribution
33 that will be used as the basis for a tax credit under this chapter
34 must provide to the department by August 1 of each year the
35 following information regarding the public school foundation's use
36 of the contributions received under this chapter:
37 (1) The name of the public school foundation.
38 (2) The total number and total dollar amount of contributions
39 received during the previous school year.
40 (3) A description of each use or purpose for which the
41 contributions were spent.
42 (4) A copy of the public school foundation's annual financial
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1 audit.
2 In addition, the public school foundation shall make the annual
3 financial audit available to a member of the public upon request.
4 The information provided under this subsection is a public record.
5 (b) The report must be certified under penalties of perjury by
6 the chief executive officer of the public school foundation.
7 Sec. 10. (a) Subject to section 1 of this chapter, if the credit
8 provided by this chapter exceeds the taxpayer's state tax liability
9 for the taxable year for which the credit is first claimed, the excess
10 may be carried forward to succeeding taxable years and used as a
11 credit against the taxpayer's state tax liability during those taxable
12 years. Each time the credit is carried forward to a succeeding
13 taxable year, the credit is reduced by the amount that was used as
14 a credit during the immediately preceding taxable year.
15 (b) A taxpayer is not entitled to a carryback or refund of any
16 unused credit.
17 Sec. 11. If a pass through entity is entitled to a credit under this
18 chapter but does not have state tax liability against which the tax
19 credit may be applied, a shareholder, partner, or member of the
20 pass through entity is entitled to a tax credit equal to:
21 (1) the tax credit determined for the pass through entity for
22 the taxable year; multiplied by
23 (2) the percentage of the pass through entity's distributive
24 income to which the shareholder, partner, or member is
25 entitled.
26 Sec. 12. To apply a credit against the taxpayer's state tax
27 liability, a taxpayer must claim the credit on the taxpayer's annual
28 state tax return or returns in the manner prescribed by the
29 department. The taxpayer shall submit to the department the
30 information that the department determines is necessary for the
31 department to determine whether the taxpayer is eligible for the
32 credit.
33 Sec. 13. The total amount of tax credits awarded under this
34 chapter may not exceed one million dollars ($1,000,000) each state
35 fiscal year.
36 Sec. 14. The department, on a website used by the department
37 to provide information to the public, shall provide the following
38 information:
39 (1) The form the department prescribes for claiming the
40 credit provided by this chapter.
41 (2) A timeline for receiving the credit provided by this
42 chapter.
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1 (3) The total amount of credits awarded under this chapter
2 during the current state fiscal year.
3 SECTION 2. [EFFECTIVE JULY 1, 2025] (a) Notwithstanding
4 the July 1, 2025, effective date for IC 6-3.1-35.6, as added by this
5 act, the credit provided by IC 6-3.1-35.6, as added by this act, may
6 be claimed only for taxable years beginning after December 31,
7 2025, and before January 1, 2028.
8 (b) This SECTION expires June 30, 2028.
2025 IN 1544—LS 6683/DI 134