LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6683 NOTE PREPARED: Dec 16, 2024
BILL NUMBER: HB 1544 BILL AMENDED:
SUBJECT: Tax Credit for Public School Foundation.
FIRST AUTHOR: Rep. Heaton BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: The bill 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. It 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. The
bill provides that the maximum amount of credits that may be awarded in a state fiscal year may not exceed
$1 M.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Department of State Revenue (DOR): The DOR will incur additional
expenses to revise tax forms, instructions, and software to reflect the changes made by the bill. The DOR’s
current level of resources should be sufficient to implement these changes.
Explanation of State Revenues: The bill establishes a nonrefundable tax credit for contributions to public
school foundations for tax years 2026 and 2027. The bill could reduce state General Fund revenues by
approximately $1 M in FY 2027 and FY 2028. The credit may be carried forward. The tax credit may be
applied to corporate or individual adjusted gross income (AGI) tax, financial institutions tax, or the insurance
premiums tax.
The tax credit is limited to 25% of the contribution amount. The maximum credit is $1,000 for an individual
or a corporation or $2,000 for a married couple filing jointly.
Additional Information - Indiana public school foundations are nonprofit 501(c)(3) corporations established
to provide financial support to public school corporations. The foundations are established to hold donation
proceeds for the purpose of funding scholarships, teacher education, capital programs, and special programs.
Donations to public school foundations are from individuals, businesses, corporate sponsorships, other
foundation endowments, and special event revenues. Contributions from individuals and businesses comprise
a substantial portion of the revenue.
HB 1544 1 The Indiana Association of Public Education Foundations is an organization that supports Indiana’s public
school foundations in their efforts to raise private funding. The association lists more than 70 public school
foundations in the state as members. The association reports that these foundations raise over $16 M annually
for Indiana school districts.
Explanation of Local Expenditures:
Explanation of Local Revenues: To the extent that the tax credit results in increasing the amount of
donations to public school foundations, it could increase the total revenues to school corporations in Indiana.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: School corporations.
Information Sources: Indiana Association of Public Education Foundations.
https://www.inapef.org/Vision-Mission
Fiscal Analyst: Camille Tesch, 317-232-5293.
HB 1544 2