Introduced Version
HOUSE BILL No. 1550
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3-1-3.5.
Synopsis: Personal exemptions. Increases the personal exemption to
$1,500 in the definition of "adjusted gross income" for a taxpayer, or,
in the case of a joint return, for each spouse. Increases the exemption
for dependents to $1,500. Increases the exemption to $1,500 for the
spouse of the taxpayer if a separate return is made by the taxpayer and
the spouse and if the spouse had no gross income for the calendar year.
Effective: January 1, 2025 (retroactive).
Jackson C, Porter
January 21, 2025, read first time and referred to Committee on Ways and Means.
2025 IN 1550—LS 6324/DI 134 Introduced
First Regular Session of the 124th General Assembly (2025)
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 2024 Regular Session of the General Assembly.
HOUSE BILL No. 1550
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.9-2024,
2 SECTION 185, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 3.5. When
4 used in this article, the term "adjusted gross income" shall mean the
5 following:
6 (a) In the case of all individuals, "adjusted gross income" (as
7 defined in Section 62 of the Internal Revenue Code), modified as
8 follows:
9 (1) Subtract income that is exempt from taxation under this article
10 by the Constitution and statutes of the United States.
11 (2) Except as provided in subsection (c), add an amount equal to
12 any deduction or deductions allowed or allowable pursuant to
13 Section 62 of the Internal Revenue Code for taxes based on or
14 measured by income and levied at the state level by any state of
15 the United States.
16 (3) Subtract one thousand dollars ($1,000), one thousand five
17 hundred dollars ($1,500), or in the case of a joint return filed by
2025 IN 1550—LS 6324/DI 134 2
1 a husband and wife, subtract for each spouse one thousand dollars
2 ($1,000). one thousand five hundred dollars ($1,500).
3 (4) Subtract: one thousand dollars ($1,000) for:
4 (A) one thousand five hundred dollars ($1,500) for each of
5 the exemptions provided by Section 151(c) of the Internal
6 Revenue Code (as effective January 1, 2017);
7 (B) one thousand dollars ($1,000) for each additional amount
8 allowable under Section 63(f) of the Internal Revenue Code;
9 and
10 (C) one thousand five hundred dollars ($1,500) for the
11 spouse of the taxpayer if a separate return is made by the
12 taxpayer and if the spouse, for the calendar year in which the
13 taxable year of the taxpayer begins, has no gross income and
14 is not the dependent of another taxpayer.
15 (5) Subtract each of the following:
16 (A) One thousand five hundred dollars ($1,500) for each of the
17 exemptions allowed under Section 151(c)(1)(B) of the Internal
18 Revenue Code (as effective January 1, 2004), except that in
19 the first taxable year in which a particular exemption is
20 allowed under Section 151(c)(1)(B) of the Internal Revenue
21 Code (as effective January 1, 2004), subtract three thousand
22 dollars ($3,000) for that exemption.
23 (B) One thousand five hundred dollars ($1,500) for each
24 exemption allowed under Section 151(c) of the Internal
25 Revenue Code (as effective January 1, 2017) for an individual:
26 (i) who is less than nineteen (19) years of age or is a
27 full-time student who is less than twenty-four (24) years of
28 age;
29 (ii) for whom the taxpayer is the legal guardian; and
30 (iii) for whom the taxpayer does not claim an exemption
31 under clause (A).
32 (C) Five hundred dollars ($500) for each additional amount
33 allowable under Section 63(f)(1) of the Internal Revenue Code
34 if the federal adjusted gross income of the taxpayer, or the
35 taxpayer and the taxpayer's spouse in the case of a joint return,
36 is less than forty thousand dollars ($40,000). In the case of a
37 married individual filing a separate return, the qualifying
38 income amount in this clause is equal to twenty thousand
39 dollars ($20,000).
40 (D) Three thousand dollars ($3,000) for each exemption
41 allowed under Section 151(c) of the Internal Revenue Code (as
42 effective January 1, 2017) for an individual who is:
2025 IN 1550—LS 6324/DI 134 3
1 (i) an adopted child of the taxpayer; and
2 (ii) less than nineteen (19) years of age or is a full-time
3 student who is less than twenty-four (24) years of age.
4 This amount is in addition to any amount subtracted under
5 clause (A) or (B).
6 This amount is in addition to the amount subtracted under
7 subdivision (4).
8 (6) Subtract any amounts included in federal adjusted gross
9 income under Section 111 of the Internal Revenue Code as a
10 recovery of items previously deducted as an itemized deduction
11 from adjusted gross income.
12 (7) Subtract any amounts included in federal adjusted gross
13 income under the Internal Revenue Code which amounts were
14 received by the individual as supplemental railroad retirement
15 annuities under 45 U.S.C. 231 and which are not deductible under
16 subdivision (1).
17 (8) Subtract an amount equal to the amount of federal Social
18 Security and Railroad Retirement benefits included in a taxpayer's
19 federal gross income by Section 86 of the Internal Revenue Code.
20 (9) In the case of a nonresident taxpayer or a resident taxpayer
21 residing in Indiana for a period of less than the taxpayer's entire
22 taxable year, the total amount of the deductions allowed pursuant
23 to subdivisions (3), (4), and (5) shall be reduced to an amount
24 which bears the same ratio to the total as the taxpayer's income
25 taxable in Indiana bears to the taxpayer's total income.
26 (10) In the case of an individual who is a recipient of assistance
27 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
28 subtract an amount equal to that portion of the individual's
29 adjusted gross income with respect to which the individual is not
30 allowed under federal law to retain an amount to pay state and
31 local income taxes.
32 (11) In the case of an eligible individual, subtract the amount of
33 a Holocaust victim's settlement payment included in the
34 individual's federal adjusted gross income.
35 (12) Subtract an amount equal to the portion of any premiums
36 paid during the taxable year by the taxpayer for a qualified long
37 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
38 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
39 file a joint income tax return or the taxpayer is otherwise entitled
40 to a deduction under this subdivision for the taxpayer's spouse, or
41 both.
42 (13) Subtract an amount equal to the lesser of:
2025 IN 1550—LS 6324/DI 134 4
1 (A) two thousand five hundred dollars ($2,500), or one
2 thousand two hundred fifty dollars ($1,250) in the case of a
3 married individual filing a separate return; or
4 (B) the amount of property taxes that are paid during the
5 taxable year in Indiana by the individual on the individual's
6 principal place of residence.
7 (14) Subtract an amount equal to the amount of a September 11
8 terrorist attack settlement payment included in the individual's
9 federal adjusted gross income.
10 (15) Add or subtract the amount necessary to make the adjusted
11 gross income of any taxpayer that owns property for which bonus
12 depreciation was allowed in the current taxable year or in an
13 earlier taxable year equal to the amount of adjusted gross income
14 that would have been computed had an election not been made
15 under Section 168(k) of the Internal Revenue Code to apply bonus
16 depreciation to the property in the year that it was placed in
17 service.
18 (16) Add an amount equal to any deduction allowed under
19 Section 172 of the Internal Revenue Code (concerning net
20 operating losses).
21 (17) Add or subtract the amount necessary to make the adjusted
22 gross income of any taxpayer that placed Section 179 property (as
23 defined in Section 179 of the Internal Revenue Code) in service
24 in the current taxable year or in an earlier taxable year equal to
25 the amount of adjusted gross income that would have been
26 computed had an election for federal income tax purposes not
27 been made for the year in which the property was placed in
28 service to take deductions under Section 179 of the Internal
29 Revenue Code in a total amount exceeding the sum of:
30 (A) twenty-five thousand dollars ($25,000) to the extent
31 deductions under Section 179 of the Internal Revenue Code
32 were not elected as provided in clause (B); and
33 (B) for taxable years beginning after December 31, 2017, the
34 deductions elected under Section 179 of the Internal Revenue
35 Code on property acquired in an exchange if:
36 (i) the exchange would have been eligible for
37 nonrecognition of gain or loss under Section 1031 of the
38 Internal Revenue Code in effect on January 1, 2017;
39 (ii) the exchange is not eligible for nonrecognition of gain or
40 loss under Section 1031 of the Internal Revenue Code; and
41 (iii) the taxpayer made an election to take deductions under
42 Section 179 of the Internal Revenue Code with regard to the
2025 IN 1550—LS 6324/DI 134 5
1 acquired property in the year that the property was placed
2 into service.
3 The amount of deductions allowable for an item of property
4 under this clause may not exceed the amount of adjusted gross
5 income realized on the property that would have been deferred
6 under the Internal Revenue Code in effect on January 1, 2017.
7 (18) Subtract an amount equal to the amount of the taxpayer's
8 qualified military income that was not excluded from the
9 taxpayer's gross income for federal income tax purposes under
10 Section 112 of the Internal Revenue Code.
11 (19) Subtract income that is:
12 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
13 derived from patents); and
14 (B) included in the individual's federal adjusted gross income
15 under the Internal Revenue Code.
16 (20) Add an amount equal to any income not included in gross
17 income as a result of the deferral of income arising from business
18 indebtedness discharged in connection with the reacquisition after
19 December 31, 2008, and before January 1, 2011, of an applicable
20 debt instrument, as provided in Section 108(i) of the Internal
21 Revenue Code. Subtract the amount necessary from the adjusted
22 gross income of any taxpayer that added an amount to adjusted
23 gross income in a previous year to offset the amount included in
24 federal gross income as a result of the deferral of income arising
25 from business indebtedness discharged in connection with the
26 reacquisition after December 31, 2008, and before January 1,
27 2011, of an applicable debt instrument, as provided in Section
28 108(i) of the Internal Revenue Code.
29 (21) Add the amount excluded from federal gross income under
30 Section 103 of the Internal Revenue Code for interest received on
31 an obligation of a state other than Indiana, or a political
32 subdivision of such a state, that is acquired by the taxpayer after
33 December 31, 2011. For purposes of this subdivision:
34 (A) if the taxpayer receives interest from a pass through entity,
35 a regulated investment company, a hedge fund, or similar
36 arrangement, the taxpayer will be considered to have acquired
37 the obligation on the date the entity acquired the obligation;
38 (B) if ownership of the obligation occurs by means other than
39 a purchase, the date of acquisition of the obligation shall be
40 the date ownership of the obligation was transferred, except to
41 the extent provided in clause (A), and if a portion of the
42 obligation is acquired on multiple dates, the date of acquisition
2025 IN 1550—LS 6324/DI 134 6
1 shall be considered separately for each portion of the
2 obligation; and
3 (C) if ownership of the obligation occurred as the result of a
4 refinancing of another obligation, the acquisition date shall be
5 the date on which the obligation was refinanced.
6 (22) Subtract an amount as described in Section 1341(a)(2) of the
7 Internal Revenue Code to the extent, if any, that the amount was
8 previously included in the taxpayer's adjusted gross income for a
9 prior taxable year.
10 (23) For taxable years beginning after December 25, 2016, add an
11 amount equal to the deduction for deferred foreign income that
12 was claimed by the taxpayer for the taxable year under Section
13 965(c) of the Internal Revenue Code.
14 (24) Subtract any interest expense paid or accrued in the current
15 taxable year but not deducted as a result of the limitation imposed
16 under Section 163(j)(1) of the Internal Revenue Code. Add any
17 interest expense paid or accrued in a previous taxable year but
18 allowed as a deduction under Section 163 of the Internal Revenue
19 Code in the current taxable year. For purposes of this subdivision,
20 an interest expense is considered paid or accrued only in the first
21 taxable year the deduction would have been allowable under
22 Section 163 of the Internal Revenue Code if the limitation under
23 Section 163(j)(1) of the Internal Revenue Code did not exist.
24 (25) Subtract the amount that would have been excluded from
25 gross income but for the enactment of Section 118(b)(2) of the
26 Internal Revenue Code for taxable years ending after December
27 22, 2017.
28 (26) For taxable years beginning after December 31, 2019, and
29 before January 1, 2021, add an amount of the deduction claimed
30 under Section 62(a)(22) of the Internal Revenue Code.
31 (27) For taxable years beginning after December 31, 2019, for
32 payments made by an employer under an education assistance
33 program after March 27, 2020:
34 (A) add the amount of payments by an employer that are
35 excluded from the taxpayer's federal gross income under
36 Section 127(c)(1)(B) of the Internal Revenue Code; and
37 (B) deduct the interest allowable under Section 221 of the
38 Internal Revenue Code, if the disallowance under Section
39 221(e)(1) of the Internal Revenue Code did not apply to the
40 payments described in clause (A). For purposes of applying
41 Section 221(b) of the Internal Revenue Code to the amount
42 allowable under this clause, the amount under clause (A) shall
2025 IN 1550—LS 6324/DI 134 7
1 not be added to adjusted gross income.
2 (28) 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 (29) For taxable years beginning after December 31, 2017, and
10 before January 1, 2021, add an amount equal to the excess
11 business loss of the taxpayer as defined in Section 461(l)(3) of the
12 Internal Revenue Code. In addition:
13 (A) If a taxpayer has an excess business loss under this
14 subdivision and also has modifications under subdivisions (15)
15 and (17) for property placed in service during the taxable year,
16 the taxpayer shall treat a portion of the taxable year
17 modifications for that property as occurring in the taxable year
18 the property is placed in service and a portion of the
19 modifications as occurring in the immediately following
20 taxable year.
21 (B) The portion of the modifications under subdivisions (15)
22 and (17) for property placed in service during the taxable year
23 treated as occurring in the taxable year in which the property
24 is placed in service equals:
25 (i) the modification for the property otherwise determined
26 under this section; minus
27 (ii) the excess business loss disallowed under this
28 subdivision;
29 but not less than zero (0).
30 (C) The portion of the modifications under subdivisions (15)
31 and (17) for property placed in service during the taxable year
32 treated as occurring in the taxable year immediately following
33 the taxable year in which the property is placed in service
34 equals the modification for the property otherwise determined
35 under this section minus the amount in clause (B).
36 (D) Any reallocation of modifications between taxable years
37 under clauses (B) and (C) shall be first allocated to the
38 modification under subdivision (15), then to the modification
39 under subdivision (17).
40 (30) Add an amount equal to the amount excluded from federal
41 gross income under Section 108(f)(5) of the Internal Revenue
42 Code. For purposes of this subdivision:
2025 IN 1550—LS 6324/DI 134 8
1 (A) if an amount excluded under Section 108(f)(5) of the
2 Internal Revenue Code would be excludible under Section
3 108(a)(1)(B) of the Internal Revenue Code, the exclusion
4 under Section 108(a)(1)(B) of the Internal Revenue Code shall
5 take precedence; and
6 (B) if an amount would have been excludible under Section
7 108(f)(5) of the Internal Revenue Code as in effect on January
8 1, 2020, the amount is not required to be added back under this
9 subdivision.
10 (31) For taxable years ending after March 12, 2020, subtract an
11 amount equal to the deduction disallowed pursuant to:
12 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
13 as modified by Sections 206 and 207 of the Taxpayer Certainty
14 and Disaster Relief Tax Act (Division EE of Public Law
15 116-260); and
16 (B) Section 3134(e) of the Internal Revenue Code.
17 (32) Subtract the amount of an ESA annual grant amount and, as
18 applicable, a CSA annual grant amount distributed to a taxpayer's
19 Indiana education scholarship account under IC 20-51.4 that is
20 used for an ESA or CSA qualified expense (as defined in
21 IC 20-51.4-2) or to an Indiana enrichment scholarship account
22 under IC 20-52 that is used for qualified expenses (as defined in
23 IC 20-52-2-6), to the extent the distribution used for the qualified
24 expense is included in the taxpayer's federal adjusted gross
25 income under the Internal Revenue Code.
26 (33) For taxable years beginning after December 31, 2019, and
27 before January 1, 2021, add an amount equal to the amount of
28 unemployment compensation excluded from federal gross income
29 under Section 85(c) of the Internal Revenue Code.
30 (34) 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 (35) For taxable years beginning after December 31, 2021, add or
34 subtract amounts related to specified research or experimental
35 procedures as required under IC 6-3-2-29.
36 (36) Subtract any other amounts the taxpayer is entitled to deduct
37 under IC 6-3-2.
38 (37) Subtract the amount of a CSA annual grant amount
39 distributed to a taxpayer's career scholarship account under
40 IC 20-51.4-4.5 that is used for a CSA qualified expense (as
41 defined in IC 20-51.4-2-3.8), to the extent the distribution used
42 for the CSA qualified expense is included in the taxpayer's federal
2025 IN 1550—LS 6324/DI 134 9
1 adjusted gross income under the Internal Revenue Code.
2 (b) In the case of corporations, the same as "taxable income" (as
3 defined in Section 63 of the Internal Revenue Code) adjusted as
4 follows:
5 (1) Subtract income that is exempt from taxation under this article
6 by the Constitution and statutes of the United States.
7 (2) Add an amount equal to any deduction or deductions allowed
8 or allowable pursuant to Section 170 of the Internal Revenue
9 Code (concerning charitable contributions).
10 (3) Except as provided in subsection (c), add an amount equal to
11 any deduction or deductions allowed or allowable pursuant to
12 Section 63 of the Internal Revenue Code for taxes based on or
13 measured by income and levied at the state level by any state of
14 the United States.
15 (4) Subtract an amount equal to the amount included in the
16 corporation's taxable income under Section 78 of the Internal
17 Revenue Code (concerning foreign tax credits).
18 (5) 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 (6) Add an amount equal to any deduction allowed under Section
27 172 of the Internal Revenue Code (concerning net operating
28 losses).
29 (7) 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
2025 IN 1550—LS 6324/DI 134 10
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 (8) Add to the extent required by IC 6-3-2-20:
16 (A) the amount of intangible expenses (as defined in
17 IC 6-3-2-20) for the taxable year that reduced the corporation's
18 taxable income (as defined in Section 63 of the Internal
19 Revenue Code) for federal income tax purposes; and
20 (B) any directly related interest expenses (as defined in
21 IC 6-3-2-20) that reduced the corporation's adjusted gross
22 income (determined without regard to this subdivision). For
23 purposes of this clause, any directly related interest expense
24 that constitutes business interest within the meaning of Section
25 163(j) of the Internal Revenue Code shall be considered to
26 have reduced the taxpayer's federal taxable income only in the
27 first taxable year in which the deduction otherwise would have
28 been allowable under Section 163 of the Internal Revenue
29 Code if the limitation under Section 163(j)(1) of the Internal
30 Revenue Code did not exist.
31 (9) Add an amount equal to any deduction for dividends paid (as
32 defined in Section 561 of the Internal Revenue Code) to
33 shareholders of a captive real estate investment trust (as defined
34 in section 34.5 of this chapter).
35 (10) Subtract income that is:
36 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
37 derived from patents); and
38 (B) included in the corporation's taxable income under the
39 Internal Revenue Code.
40 (11) Add an amount equal to any income not included in gross
41 income as a result of the deferral of income arising from business
42 indebtedness discharged in connection with the reacquisition after
2025 IN 1550—LS 6324/DI 134 11
1 December 31, 2008, and before January 1, 2011, of an applicable
2 debt instrument, as provided in Section 108(i) of the Internal
3 Revenue Code. Subtract from the adjusted gross income of any
4 taxpayer that added an amount to adjusted gross income in a
5 previous year the amount necessary to offset the amount included
6 in federal gross income as a result of the deferral of income
7 arising from business indebtedness discharged in connection with
8 the reacquisition after December 31, 2008, and before January 1,
9 2011, of an applicable debt instrument, as provided in Section
10 108(i) of the Internal Revenue Code.
11 (12) Add the amount excluded from federal gross income under
12 Section 103 of the Internal Revenue Code for interest received on
13 an obligation of a state other than Indiana, or a political
14 subdivision of such a state, that is acquired by the taxpayer after
15 December 31, 2011. For purposes of this subdivision:
16 (A) if the taxpayer receives interest from a pass through entity,
17 a regulated investment company, a hedge fund, or similar
18 arrangement, the taxpayer will be considered to have acquired
19 the obligation on the date the entity acquired the obligation;
20 (B) if ownership of the obligation occurs by means other than
21 a purchase, the date of acquisition of the obligation shall be
22 the date ownership of the obligation was transferred, except to
23 the extent provided in clause (A), and if a portion of the
24 obligation is acquired on multiple dates, the date of acquisition
25 shall be considered separately for each portion of the
26 obligation; and
27 (C) if ownership of the obligation occurred as the result of a
28 refinancing of another obligation, the acquisition date shall be
29 the date on which the obligation was refinanced.
30 (13) For taxable years beginning after December 25, 2016:
31 (A) for a corporation other than a real estate investment trust,
32 add:
33 (i) an amount equal to the amount reported by the taxpayer
34 on IRC 965 Transition Tax Statement, line 1; or
35 (ii) if the taxpayer deducted an amount under Section 965(c)
36 of the Internal Revenue Code in determining the taxpayer's
37 taxable income for purposes of the federal income tax, the
38 amount deducted under Section 965(c) of the Internal
39 Revenue Code; and
40 (B) for a real estate investment trust, add an amount equal to
41 the deduction for deferred foreign income that was claimed by
42 the taxpayer for the taxable year under Section 965(c) of the
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1 Internal Revenue Code, but only to the extent that the taxpayer
2 included income pursuant to Section 965 of the Internal
3 Revenue Code in its taxable income for federal income tax
4 purposes or is required to add back dividends paid under
5 subdivision (9).
6 (14) Add an amount equal to the deduction that was claimed by
7 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
8 Internal Revenue Code (attributable to global intangible
9 low-taxed income). The taxpayer shall separately specify the
10 amount of the reduction under Section 250(a)(1)(B)(i) of the
11 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
12 Internal Revenue Code.
13 (15) Subtract any interest expense paid or accrued in the current
14 taxable year but not deducted as a result of the limitation imposed
15 under Section 163(j)(1) of the Internal Revenue Code. Add any
16 interest expense paid or accrued in a previous taxable year but
17 allowed as a deduction under Section 163 of the Internal Revenue
18 Code in the current taxable year. For purposes of this subdivision,
19 an interest expense is considered paid or accrued only in the first
20 taxable year the deduction would have been allowable under
21 Section 163 of the Internal Revenue Code if the limitation under
22 Section 163(j)(1) of the Internal Revenue Code did not exist.
23 (16) 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 (17) 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 (18) For taxable years ending after March 12, 2020, subtract an
35 amount equal to the deduction disallowed pursuant to:
36 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
37 as modified by Sections 206 and 207 of the Taxpayer Certainty
38 and Disaster Relief Tax Act (Division EE of Public Law
39 116-260); and
40 (B) Section 3134(e) of the Internal Revenue Code.
41 (19) For taxable years beginning after December 31, 2022,
42 subtract an amount equal to the deduction disallowed under
2025 IN 1550—LS 6324/DI 134 13
1 Section 280C(h) of the Internal Revenue Code.
2 (20) For taxable years beginning after December 31, 2021,
3 subtract the amount of any:
4 (A) federal, state, or local grant received by the taxpayer; and
5 (B) discharged federal, state, or local indebtedness incurred by
6 the taxpayer;
7 for purposes of providing or expanding access to broadband
8 service in this state.
9 (21) For taxable years beginning after December 31, 2021, add or
10 subtract amounts related to specified research or experimental
11 procedures as required under IC 6-3-2-29.
12 (22) Add or subtract any other amounts the taxpayer is:
13 (A) required to add or subtract; or
14 (B) entitled to deduct;
15 under IC 6-3-2.
16 (c) The following apply to taxable years beginning after December
17 31, 2018, for purposes of the add back of any deduction allowed on the
18 taxpayer's federal income tax return for wagering taxes, as provided in
19 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
20 the taxpayer is a corporation:
21 (1) For taxable years beginning after December 31, 2018, and
22 before January 1, 2020, a taxpayer is required to add back under
23 this section eighty-seven and five-tenths percent (87.5%) of any
24 deduction allowed on the taxpayer's federal income tax return for
25 wagering taxes.
26 (2) For taxable years beginning after December 31, 2019, and
27 before January 1, 2021, a taxpayer is required to add back under
28 this section seventy-five percent (75%) of any deduction allowed
29 on the taxpayer's federal income tax return for wagering taxes.
30 (3) For taxable years beginning after December 31, 2020, and
31 before January 1, 2022, a taxpayer is required to add back under
32 this section sixty-two and five-tenths percent (62.5%) of any
33 deduction allowed on the taxpayer's federal income tax return for
34 wagering taxes.
35 (4) For taxable years beginning after December 31, 2021, and
36 before January 1, 2023, a taxpayer is required to add back under
37 this section fifty percent (50%) of any deduction allowed on the
38 taxpayer's federal income tax return for wagering taxes.
39 (5) For taxable years beginning after December 31, 2022, and
40 before January 1, 2024, a taxpayer is required to add back under
41 this section thirty-seven and five-tenths percent (37.5%) of any
42 deduction allowed on the taxpayer's federal income tax return for
2025 IN 1550—LS 6324/DI 134 14
1 wagering taxes.
2 (6) For taxable years beginning after December 31, 2023, and
3 before January 1, 2025, a taxpayer is required to add back under
4 this section twenty-five percent (25%) of any deduction allowed
5 on the taxpayer's federal income tax return for wagering taxes.
6 (7) For taxable years beginning after December 31, 2024, and
7 before January 1, 2026, a taxpayer is required to add back under
8 this section twelve and five-tenths percent (12.5%) of any
9 deduction allowed on the taxpayer's federal income tax return for
10 wagering taxes.
11 (8) For taxable years beginning after December 31, 2025, a
12 taxpayer is not required to add back under this section any amount
13 of a deduction allowed on the taxpayer's federal income tax return
14 for wagering taxes.
15 (d) In the case of life insurance companies (as defined in Section
16 816(a) of the Internal Revenue Code) that are organized under Indiana
17 law, the same as "life insurance company taxable income" (as defined
18 in Section 801 of the Internal Revenue Code), adjusted as follows:
19 (1) Subtract income that is exempt from taxation under this article
20 by the Constitution and statutes of the United States.
21 (2) Add an amount equal to any deduction allowed or allowable
22 under Section 170 of the Internal Revenue Code (concerning
23 charitable contributions).
24 (3) Add an amount equal to a deduction allowed or allowable
25 under Section 805 or Section 832(c) of the Internal Revenue Code
26 for taxes based on or measured by income and levied at the state
27 level by any state.
28 (4) Subtract an amount equal to the amount included in the
29 company's taxable income under Section 78 of the Internal
30 Revenue Code (concerning foreign tax credits).
31 (5) Add or subtract the amount necessary to make the adjusted
32 gross income of any taxpayer that owns property for which bonus
33 depreciation was allowed in the current taxable year or in an
34 earlier taxable year equal to the amount of adjusted gross income
35 that would have been computed had an election not been made
36 under Section 168(k) of the Internal Revenue Code to apply bonus
37 depreciation to the property in the year that it was placed in
38 service.
39 (6) Add an amount equal to any deduction allowed under Section
40 172 of the Internal Revenue Code (concerning net operating
41 losses).
42 (7) Add or subtract the amount necessary to make the adjusted
2025 IN 1550—LS 6324/DI 134 15
1 gross income of any taxpayer that placed Section 179 property (as
2 defined in Section 179 of the Internal Revenue Code) in service
3 in the current taxable year or in an earlier taxable year equal to
4 the amount of adjusted gross income that would have been
5 computed had an election for federal income tax purposes not
6 been made for the year in which the property was placed in
7 service to take deductions under Section 179 of the Internal
8 Revenue Code in a total amount exceeding the sum of:
9 (A) twenty-five thousand dollars ($25,000) to the extent
10 deductions under Section 179 of the Internal Revenue Code
11 were not elected as provided in clause (B); and
12 (B) for taxable years beginning after December 31, 2017, the
13 deductions elected under Section 179 of the Internal Revenue
14 Code on property acquired in an exchange if:
15 (i) the exchange would have been eligible for
16 nonrecognition of gain or loss under Section 1031 of the
17 Internal Revenue Code in effect on January 1, 2017;
18 (ii) the exchange is not eligible for nonrecognition of gain or
19 loss under Section 1031 of the Internal Revenue Code; and
20 (iii) the taxpayer made an election to take deductions under
21 Section 179 of the Internal Revenue Code with regard to the
22 acquired property in the year that the property was placed
23 into service.
24 The amount of deductions allowable for an item of property
25 under this clause may not exceed the amount of adjusted gross
26 income realized on the property that would have been deferred
27 under the Internal Revenue Code in effect on January 1, 2017.
28 (8) Subtract income that is:
29 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
30 derived from patents); and
31 (B) included in the insurance company's taxable income under
32 the Internal Revenue Code.
33 (9) Add an amount equal to any income not included in gross
34 income as a result of the deferral of income arising from business
35 indebtedness discharged in connection with the reacquisition after
36 December 31, 2008, and before January 1, 2011, of an applicable
37 debt instrument, as provided in Section 108(i) of the Internal
38 Revenue Code. Subtract from the adjusted gross income of any
39 taxpayer that added an amount to adjusted gross income in a
40 previous year the amount necessary to offset the amount included
41 in federal gross income as a result of the deferral of income
42 arising from business indebtedness discharged in connection with
2025 IN 1550—LS 6324/DI 134 16
1 the reacquisition after December 31, 2008, and before January 1,
2 2011, of an applicable debt instrument, as provided in Section
3 108(i) of the Internal Revenue Code.
4 (10) Add an amount equal to any exempt insurance income under
5 Section 953(e) of the Internal Revenue Code that is active
6 financing income under Subpart F of Subtitle A, Chapter 1,
7 Subchapter N of the Internal Revenue Code.
8 (11) Add the amount excluded from federal gross income under
9 Section 103 of the Internal Revenue Code for interest received on
10 an obligation of a state other than Indiana, or a political
11 subdivision of such a state, that is acquired by the taxpayer after
12 December 31, 2011. For purposes of this subdivision:
13 (A) if the taxpayer receives interest from a pass through entity,
14 a regulated investment company, a hedge fund, or similar
15 arrangement, the taxpayer will be considered to have acquired
16 the obligation on the date the entity acquired the obligation;
17 (B) if ownership of the obligation occurs by means other than
18 a purchase, the date of acquisition of the obligation shall be
19 the date ownership of the obligation was transferred, except to
20 the extent provided in clause (A), and if a portion of the
21 obligation is acquired on multiple dates, the date of acquisition
22 shall be considered separately for each portion of the
23 obligation; and
24 (C) if ownership of the obligation occurred as the result of a
25 refinancing of another obligation, the acquisition date shall be
26 the date on which the obligation was refinanced.
27 (12) For taxable years beginning after December 25, 2016, add:
28 (A) an amount equal to the amount reported by the taxpayer on
29 IRC 965 Transition Tax Statement, line 1; or
30 (B) if the taxpayer deducted an amount under Section 965(c)
31 of the Internal Revenue Code in determining the taxpayer's
32 taxable income for purposes of the federal income tax, the
33 amount deducted under Section 965(c) of the Internal Revenue
34 Code.
35 (13) Add an amount equal to the deduction that was claimed by
36 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
37 Internal Revenue Code (attributable to global intangible
38 low-taxed income). The taxpayer shall separately specify the
39 amount of the reduction under Section 250(a)(1)(B)(i) of the
40 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
41 Internal Revenue Code.
42 (14) Subtract any interest expense paid or accrued in the current
2025 IN 1550—LS 6324/DI 134 17
1 taxable year but not deducted as a result of the limitation imposed
2 under Section 163(j)(1) of the Internal Revenue Code. Add any
3 interest expense paid or accrued in a previous taxable year but
4 allowed as a deduction under Section 163 of the Internal Revenue
5 Code in the current taxable year. For purposes of this subdivision,
6 an interest expense is considered paid or accrued only in the first
7 taxable year the deduction would have been allowable under
8 Section 163 of the Internal Revenue Code if the limitation under
9 Section 163(j)(1) of the Internal Revenue Code did not exist.
10 (15) Subtract the amount that would have been excluded from
11 gross income but for the enactment of Section 118(b)(2) of the
12 Internal Revenue Code for taxable years ending after December
13 22, 2017.
14 (16) Add an amount equal to the remainder of:
15 (A) the amount allowable as a deduction under Section 274(n)
16 of the Internal Revenue Code; minus
17 (B) the amount otherwise allowable as a deduction under
18 Section 274(n) of the Internal Revenue Code, if Section
19 274(n)(2)(D) of the Internal Revenue Code was not in effect
20 for amounts paid or incurred after December 31, 2020.
21 (17) For taxable years ending after March 12, 2020, subtract an
22 amount equal to the deduction disallowed pursuant to:
23 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
24 as modified by Sections 206 and 207 of the Taxpayer Certainty
25 and Disaster Relief Tax Act (Division EE of Public Law
26 116-260); and
27 (B) Section 3134(e) of the Internal Revenue Code.
28 (18) For taxable years beginning after December 31, 2022,
29 subtract an amount equal to the deduction disallowed under
30 Section 280C(h) of the Internal Revenue Code.
31 (19) For taxable years beginning after December 31, 2021, add or
32 subtract amounts related to specified research or experimental
33 procedures as required under IC 6-3-2-29.
34 (20) Add or subtract any other amounts the taxpayer is:
35 (A) required to add or subtract; or
36 (B) entitled to deduct;
37 under IC 6-3-2.
38 (e) In the case of insurance companies subject to tax under Section
39 831 of the Internal Revenue Code and organized under Indiana law, the
40 same as "taxable income" (as defined in Section 832 of the Internal
41 Revenue Code), adjusted as follows:
42 (1) Subtract income that is exempt from taxation under this article
2025 IN 1550—LS 6324/DI 134 18
1 by the Constitution and statutes of the United States.
2 (2) Add an amount equal to any deduction allowed or allowable
3 under Section 170 of the Internal Revenue Code (concerning
4 charitable contributions).
5 (3) Add an amount equal to a deduction allowed or allowable
6 under Section 805 or Section 832(c) of the Internal Revenue Code
7 for taxes based on or measured by income and levied at the state
8 level by any state.
9 (4) Subtract an amount equal to the amount included in the
10 company's taxable income under Section 78 of the Internal
11 Revenue Code (concerning foreign tax credits).
12 (5) Add or subtract the amount necessary to make the adjusted
13 gross income of any taxpayer that owns property for which bonus
14 depreciation was allowed in the current taxable year or in an
15 earlier taxable year equal to the amount of adjusted gross income
16 that would have been computed had an election not been made
17 under Section 168(k) of the Internal Revenue Code to apply bonus
18 depreciation to the property in the year that it was placed in
19 service.
20 (6) Add an amount equal to any deduction allowed under Section
21 172 of the Internal Revenue Code (concerning net operating
22 losses).
23 (7) Add or subtract the amount necessary to make the adjusted
24 gross income of any taxpayer that placed Section 179 property (as
25 defined in Section 179 of the Internal Revenue Code) in service
26 in the current taxable year or in an earlier taxable year equal to
27 the amount of adjusted gross income that would have been
28 computed had an election for federal income tax purposes not
29 been made for the year in which the property was placed in
30 service to take deductions under Section 179 of the Internal
31 Revenue Code in a total amount exceeding the sum of:
32 (A) twenty-five thousand dollars ($25,000) to the extent
33 deductions under Section 179 of the Internal Revenue Code
34 were not elected as provided in clause (B); and
35 (B) for taxable years beginning after December 31, 2017, the
36 deductions elected under Section 179 of the Internal Revenue
37 Code on property acquired in an exchange if:
38 (i) the exchange would have been eligible for
39 nonrecognition of gain or loss under Section 1031 of the
40 Internal Revenue Code in effect on January 1, 2017;
41 (ii) the exchange is not eligible for nonrecognition of gain or
42 loss under Section 1031 of the Internal Revenue Code; and
2025 IN 1550—LS 6324/DI 134 19
1 (iii) the taxpayer made an election to take deductions under
2 Section 179 of the Internal Revenue Code with regard to the
3 acquired property in the year that the property was placed
4 into service.
5 The amount of deductions allowable for an item of property
6 under this clause may not exceed the amount of adjusted gross
7 income realized on the property that would have been deferred
8 under the Internal Revenue Code in effect on January 1, 2017.
9 (8) Subtract income that is:
10 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
11 derived from patents); and
12 (B) included in the insurance company's taxable income under
13 the Internal Revenue Code.
14 (9) Add an amount equal to any income not included in gross
15 income as a result of the deferral of income arising from business
16 indebtedness discharged in connection with the reacquisition after
17 December 31, 2008, and before January 1, 2011, of an applicable
18 debt instrument, as provided in Section 108(i) of the Internal
19 Revenue Code. Subtract from the adjusted gross income of any
20 taxpayer that added an amount to adjusted gross income in a
21 previous year the amount necessary to offset the amount included
22 in federal gross income as a result of the deferral of income
23 arising from business indebtedness discharged in connection with
24 the reacquisition after December 31, 2008, and before January 1,
25 2011, of an applicable debt instrument, as provided in Section
26 108(i) of the Internal Revenue Code.
27 (10) Add an amount equal to any exempt insurance income under
28 Section 953(e) of the Internal Revenue Code that is active
29 financing income under Subpart F of Subtitle A, Chapter 1,
30 Subchapter N of the Internal Revenue Code.
31 (11) Add the amount excluded from federal gross income under
32 Section 103 of the Internal Revenue Code for interest received on
33 an obligation of a state other than Indiana, or a political
34 subdivision of such a state, that is acquired by the taxpayer after
35 December 31, 2011. For purposes of this subdivision:
36 (A) if the taxpayer receives interest from a pass through entity,
37 a regulated investment company, a hedge fund, or similar
38 arrangement, the taxpayer will be considered to have acquired
39 the obligation on the date the entity acquired the obligation;
40 (B) if ownership of the obligation occurs by means other than
41 a purchase, the date of acquisition of the obligation shall be
42 the date ownership of the obligation was transferred, except to
2025 IN 1550—LS 6324/DI 134 20
1 the extent provided in clause (A), and if a portion of the
2 obligation is acquired on multiple dates, the date of acquisition
3 shall be considered separately for each portion of the
4 obligation; and
5 (C) if ownership of the obligation occurred as the result of a
6 refinancing of another obligation, the acquisition date shall be
7 the date on which the obligation was refinanced.
8 (12) For taxable years beginning after December 25, 2016, add:
9 (A) an amount equal to the amount reported by the taxpayer on
10 IRC 965 Transition Tax Statement, line 1; or
11 (B) if the taxpayer deducted an amount under Section 965(c)
12 of the Internal Revenue Code in determining the taxpayer's
13 taxable income for purposes of the federal income tax, the
14 amount deducted under Section 965(c) of the Internal Revenue
15 Code.
16 (13) 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 (14) 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 (15) 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 (16) 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
2025 IN 1550—LS 6324/DI 134 21
1 for amounts paid or incurred after December 31, 2020.
2 (17) 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 (18) 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 (19) For taxable years beginning after December 31, 2021, add or
13 subtract amounts related to specified research or experimental
14 procedures as required under IC 6-3-2-29.
15 (20) Add or subtract any other amounts the taxpayer is:
16 (A) required to add or subtract; or
17 (B) entitled to deduct;
18 under IC 6-3-2.
19 (f) In the case of trusts and estates, "taxable income" (as defined for
20 trusts and estates in Section 641(b) of the Internal Revenue Code)
21 adjusted as follows:
22 (1) Subtract income that is exempt from taxation under this article
23 by the Constitution and statutes of the United States.
24 (2) Subtract an amount equal to the amount of a September 11
25 terrorist attack settlement payment included in the federal
26 adjusted gross income of the estate of a victim of the September
27 11 terrorist attack or a trust to the extent the trust benefits a victim
28 of the September 11 terrorist attack.
29 (3) Add or subtract the amount necessary to make the adjusted
30 gross income of any taxpayer that owns property for which bonus
31 depreciation was allowed in the current taxable year or in an
32 earlier taxable year equal to the amount of adjusted gross income
33 that would have been computed had an election not been made
34 under Section 168(k) of the Internal Revenue Code to apply bonus
35 depreciation to the property in the year that it was placed in
36 service.
37 (4) Add an amount equal to any deduction allowed under Section
38 172 of the Internal Revenue Code (concerning net operating
39 losses).
40 (5) Add or subtract the amount necessary to make the adjusted
41 gross income of any taxpayer that placed Section 179 property (as
42 defined in Section 179 of the Internal Revenue Code) in service
2025 IN 1550—LS 6324/DI 134 22
1 in the current taxable year or in an earlier taxable year equal to
2 the amount of adjusted gross income that would have been
3 computed had an election for federal income tax purposes not
4 been made for the year in which the property was placed in
5 service to take deductions under Section 179 of the Internal
6 Revenue Code in a total amount exceeding the sum of:
7 (A) twenty-five thousand dollars ($25,000) to the extent
8 deductions under Section 179 of the Internal Revenue Code
9 were not elected as provided in clause (B); and
10 (B) for taxable years beginning after December 31, 2017, the
11 deductions elected under Section 179 of the Internal Revenue
12 Code on property acquired in an exchange if:
13 (i) the exchange would have been eligible for
14 nonrecognition of gain or loss under Section 1031 of the
15 Internal Revenue Code in effect on January 1, 2017;
16 (ii) the exchange is not eligible for nonrecognition of gain or
17 loss under Section 1031 of the Internal Revenue Code; and
18 (iii) the taxpayer made an election to take deductions under
19 Section 179 of the Internal Revenue Code with regard to the
20 acquired property in the year that the property was placed
21 into service.
22 The amount of deductions allowable for an item of property
23 under this clause may not exceed the amount of adjusted gross
24 income realized on the property that would have been deferred
25 under the Internal Revenue Code in effect on January 1, 2017.
26 (6) Subtract income that is:
27 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
28 derived from patents); and
29 (B) included in the taxpayer's taxable income under the
30 Internal Revenue Code.
31 (7) Add an amount equal to any income not included in gross
32 income as a result of the deferral of income arising from business
33 indebtedness discharged in connection with the reacquisition after
34 December 31, 2008, and before January 1, 2011, of an applicable
35 debt instrument, as provided in Section 108(i) of the Internal
36 Revenue Code. Subtract from the adjusted gross income of any
37 taxpayer that added an amount to adjusted gross income in a
38 previous year the amount necessary to offset the amount included
39 in federal gross income as a result of the deferral of income
40 arising from business indebtedness discharged in connection with
41 the reacquisition after December 31, 2008, and before January 1,
42 2011, of an applicable debt instrument, as provided in Section
2025 IN 1550—LS 6324/DI 134 23
1 108(i) of the Internal Revenue Code.
2 (8) Add the amount excluded from federal gross income under
3 Section 103 of the Internal Revenue Code for interest received on
4 an obligation of a state other than Indiana, or a political
5 subdivision of such a state, that is acquired by the taxpayer after
6 December 31, 2011. For purposes of this subdivision:
7 (A) if the taxpayer receives interest from a pass through entity,
8 a regulated investment company, a hedge fund, or similar
9 arrangement, the taxpayer will be considered to have acquired
10 the obligation on the date the entity acquired the obligation;
11 (B) if ownership of the obligation occurs by means other than
12 a purchase, the date of acquisition of the obligation shall be
13 the date ownership of the obligation was transferred, except to
14 the extent provided in clause (A), and if a portion of the
15 obligation is acquired on multiple dates, the date of acquisition
16 shall be considered separately for each portion of the
17 obligation; and
18 (C) if ownership of the obligation occurred as the result of a
19 refinancing of another obligation, the acquisition date shall be
20 the date on which the obligation was refinanced.
21 (9) For taxable years beginning after December 25, 2016, add an
22 amount equal to:
23 (A) the amount reported by the taxpayer on IRC 965
24 Transition Tax Statement, line 1;
25 (B) if the taxpayer deducted an amount under Section 965(c)
26 of the Internal Revenue Code in determining the taxpayer's
27 taxable income for purposes of the federal income tax, the
28 amount deducted under Section 965(c) of the Internal Revenue
29 Code; and
30 (C) with regard to any amounts of income under Section 965
31 of the Internal Revenue Code distributed by the taxpayer, the
32 deduction under Section 965(c) of the Internal Revenue Code
33 attributable to such distributed amounts and not reported to the
34 beneficiary.
35 For purposes of this article, the amount required to be added back
36 under clause (B) is not considered to be distributed or
37 distributable to a beneficiary of the estate or trust for purposes of
38 Sections 651 and 661 of the Internal Revenue Code.
39 (10) Subtract any interest expense paid or accrued in the current
40 taxable year but not deducted as a result of the limitation imposed
41 under Section 163(j)(1) of the Internal Revenue Code. Add any
42 interest expense paid or accrued in a previous taxable year but
2025 IN 1550—LS 6324/DI 134 24
1 allowed as a deduction under Section 163 of the Internal Revenue
2 Code in the current taxable year. For purposes of this subdivision,
3 an interest expense is considered paid or accrued only in the first
4 taxable year the deduction would have been allowable under
5 Section 163 of the Internal Revenue Code if the limitation under
6 Section 163(j)(1) of the Internal Revenue Code did not exist.
7 (11) Add an amount equal to the deduction for qualified business
8 income that was claimed by the taxpayer for the taxable year
9 under Section 199A of the Internal Revenue Code.
10 (12) Subtract the amount that would have been excluded from
11 gross income but for the enactment of Section 118(b)(2) of the
12 Internal Revenue Code for taxable years ending after December
13 22, 2017.
14 (13) Add an amount equal to the remainder of:
15 (A) the amount allowable as a deduction under Section 274(n)
16 of the Internal Revenue Code; minus
17 (B) the amount otherwise allowable as a deduction under
18 Section 274(n) of the Internal Revenue Code, if Section
19 274(n)(2)(D) of the Internal Revenue Code was not in effect
20 for amounts paid or incurred after December 31, 2020.
21 (14) For taxable years beginning after December 31, 2017, and
22 before January 1, 2021, add an amount equal to the excess
23 business loss of the taxpayer as defined in Section 461(l)(3) of the
24 Internal Revenue Code. In addition:
25 (A) If a taxpayer has an excess business loss under this
26 subdivision and also has modifications under subdivisions (3)
27 and (5) for property placed in service during the taxable year,
28 the taxpayer shall treat a portion of the taxable year
29 modifications for that property as occurring in the taxable year
30 the property is placed in service and a portion of the
31 modifications as occurring in the immediately following
32 taxable year.
33 (B) The portion of the modifications under subdivisions (3)
34 and (5) for property placed in service during the taxable year
35 treated as occurring in the taxable year in which the property
36 is placed in service equals:
37 (i) the modification for the property otherwise determined
38 under this section; minus
39 (ii) the excess business loss disallowed under this
40 subdivision;
41 but not less than zero (0).
42 (C) The portion of the modifications under subdivisions (3)
2025 IN 1550—LS 6324/DI 134 25
1 and (5) for property placed in service during the taxable year
2 treated as occurring in the taxable year immediately following
3 the taxable year in which the property is placed in service
4 equals the modification for the property otherwise determined
5 under this section minus the amount in clause (B).
6 (D) Any reallocation of modifications between taxable years
7 under clauses (B) and (C) shall be first allocated to the
8 modification under subdivision (3), then to the modification
9 under subdivision (5).
10 (15) For taxable years ending after March 12, 2020, subtract an
11 amount equal to the deduction disallowed pursuant to:
12 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
13 as modified by Sections 206 and 207 of the Taxpayer Certainty
14 and Disaster Relief Tax Act (Division EE of Public Law
15 116-260); and
16 (B) Section 3134(e) of the Internal Revenue Code.
17 (16) For taxable years beginning after December 31, 2022,
18 subtract an amount equal to the deduction disallowed under
19 Section 280C(h) of the Internal Revenue Code.
20 (17) Except as provided in subsection (c), for taxable years
21 beginning after December 31, 2022, add an amount equal to any
22 deduction or deductions allowed or allowable in determining
23 taxable income under Section 641(b) of the Internal Revenue
24 Code for taxes based on or measured by income and levied at the
25 state level by any state of the United States.
26 (18) For taxable years beginning after December 31, 2021, add or
27 subtract amounts related to specified research or experimental
28 procedures as required under IC 6-3-2-29.
29 (19) Add or subtract any other amounts the taxpayer is:
30 (A) required to add or subtract; or
31 (B) entitled to deduct;
32 under IC 6-3-2.
33 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
34 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
35 "adjusted gross income" of a pass through entity means the items of
36 ordinary income and loss in the case of a partnership or a corporation
37 described in IC 6-3-2-2.8(2), or distributions subject to tax for state and
38 federal income tax for beneficiaries in the case of a trust or estate,
39 whichever is applicable, for the taxable year modified as follows:
40 (1) Add the separately stated items of income and gains, or the
41 equivalent items that must be considered separately by a
42 beneficiary, as determined for federal purposes, attributed to the
2025 IN 1550—LS 6324/DI 134 26
1 partners, shareholders, or beneficiaries of the pass through entity,
2 determined without regard to whether the owner is permitted to
3 exclude all or part of the income or gain or deduct any amount
4 against the income or gain.
5 (2) Subtract the separately stated items of deductions or losses or
6 items that must be considered separately by beneficiaries, as
7 determined for federal purposes, attributed to partners,
8 shareholders, or beneficiaries of the pass through entity and that
9 are deductible by an individual in determining adjusted gross
10 income as defined under Section 62 of the Internal Revenue
11 Code:
12 (A) limited as if the partners, shareholders, and beneficiaries
13 deducted the maximum allowable loss or deduction allowable
14 for the taxable year prior to any amount deductible from the
15 pass through entity; but
16 (B) not considering any disallowance of deductions resulting
17 from federal basis limitations for the partner, shareholder, or
18 beneficiary.
19 (3) Add or subtract any modifications to adjusted gross income
20 that would be required both for individuals under subsection (a)
21 and corporations under subsection (b) to the extent otherwise
22 provided in those subsections, including amounts that are
23 allowable for which such modifications are necessary to account
24 for separately stated items in subdivision (1) or (2).
25 (h) Subsections (a)(36), (b)(22), (d)(20), (e)(20), or (f)(19) may not
26 be construed to require an add back or allow a deduction or exemption
27 more than once for a particular add back, deduction, or exemption.
28 (i) For taxable years beginning after December 25, 2016, if:
29 (1) a taxpayer is a shareholder, either directly or indirectly, in a
30 corporation that is an E&P deficit foreign corporation as defined
31 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
32 earnings and profit deficit, or a portion of the earnings and profit
33 deficit, of the E&P deficit foreign corporation is permitted to
34 reduce the federal adjusted gross income or federal taxable
35 income of the taxpayer, the deficit, or the portion of the deficit,
36 shall also reduce the amount taxable under this section to the
37 extent permitted under the Internal Revenue Code, however, in no
38 case shall this permit a reduction in the amount taxable under
39 Section 965 of the Internal Revenue Code for purposes of this
40 section to be less than zero (0); and
41 (2) the Internal Revenue Service issues guidance that such an
42 income or deduction is not reported directly on a federal tax
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1 return or is to be reported in a manner different than specified in
2 this section, this section shall be construed as if federal adjusted
3 gross income or federal taxable income included the income or
4 deduction.
5 (j) If a partner is required to include an item of income, a deduction,
6 or another tax attribute in the partner's adjusted gross income tax return
7 pursuant to IC 6-3-4.5, such item shall be considered to be includible
8 in the partner's federal adjusted gross income or federal taxable
9 income, regardless of whether such item is actually required to be
10 reported by the partner for federal income tax purposes. For purposes
11 of this subsection:
12 (1) items for which a valid election is made under IC 6-3-4.5-6,
13 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
14 in the partner's adjusted gross income or taxable income; and
15 (2) items for which the partnership did not make an election under
16 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
17 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
18 shall be included in the partner's adjusted gross income or taxable
19 income.
20 (k) The following apply for purposes of this section:
21 (1) For purposes of subsections (b) and (f), if a taxpayer is an
22 organization that has more than one (1) trade or business subject
23 to the provisions of Section 512(a)(6) of the Internal Revenue
24 Code, the following rules apply for taxable years beginning after
25 December 31, 2017:
26 (A) If a trade or business has federal unrelated business
27 taxable income of zero (0) or greater for a taxable year, the
28 unrelated business taxable income and modifications required
29 under this section shall be combined in determining the
30 adjusted gross income of the taxpayer and shall not be treated
31 as being subject to the provisions of Section 512(a)(6) of the
32 Internal Revenue Code if one (1) or more trades or businesses
33 have negative Indiana adjusted gross income after
34 adjustments.
35 (B) If a trade or business has federal unrelated business
36 taxable income of less than zero (0) for a taxable year, the
37 taxpayer shall apply the modifications under this section for
38 the taxable year against the net operating loss in the manner
39 required under IC 6-3-2-2.5 and IC 6-3-2-2.6 for separately
40 stated net operating losses. However, if the application of
41 modifications required under IC 6-3-2-2.5 or IC 6-3-2-2.6
42 results in the separately stated net operating loss for the trade
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1 or business being zero (0), the modifications that increase
2 adjusted gross income under this section and remain after the
3 calculations to adjust the separately stated net operating loss
4 to zero (0) that result from the trade or business must be
5 treated as modifications to which clause (A) applies for the
6 taxable year.
7 (C) If a trade or business otherwise described in Section
8 512(a)(6) of the Internal Revenue Code incurred a net
9 operating loss for a taxable year beginning after December 31,
10 2017, and before January 1, 2021, and the net operating loss
11 was carried back for federal tax purposes:
12 (i) if the loss was carried back to a taxable year for which
13 the requirements under Section 512(a)(6) of the Internal
14 Revenue Code did not apply, the portion of the loss and
15 modifications attributable to the loss shall be treated as
16 adjusted gross income of the taxpayer for the first taxable
17 year of the taxpayer beginning after December 31, 2022, and
18 shall be treated as part of the adjusted gross income
19 attributable to clause (A), unless, and to the extent, the loss
20 and modifications were applied to adjusted gross income for
21 a previous taxable year, as determined under this article; and
22 (ii) if the loss was carried back to a taxable year for which
23 the requirements under Section 512(a)(6) of the Internal
24 Revenue Code applied, the portion of the loss and
25 modifications attributable to the loss shall be treated as
26 adjusted gross income of the taxpayer for the first taxable
27 year of the taxpayer beginning after December 31, 2022, and
28 for purposes of this clause, the inclusion of losses and
29 modifications shall be in the same manner as provided in
30 clause (B), unless, and to the extent, the loss and
31 modifications were applied to adjusted gross income for a
32 previous taxable year, as determined under this article.
33 (D) Notwithstanding any provision in this subdivision, if a
34 taxpayer computed its adjusted gross income for a taxable year
35 beginning before January 1, 2023, based on a reasonable
36 interpretation of this article, the taxpayer shall be permitted to
37 compute its adjusted gross income for those taxable years
38 based on that interpretation. However, a taxpayer must
39 continue to report any tax attributes for taxable years
40 beginning after December 31, 2022, in a manner consistent
41 with its previous interpretation.
42 (2) In the case of a corporation, other than a captive real estate
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1 investment trust, for which the adjusted gross income under this
2 article is determined after a deduction for dividends paid under
3 the Internal Revenue Code, the modifications required under this
4 section shall be applied in ratio to the corporation's taxable
5 income (as defined in Section 63 of the Internal Revenue Code)
6 after deductions for dividends paid under the Internal Revenue
7 Code compared to the corporation's taxable income (as defined in
8 Section 63 of the Internal Revenue Code) before the deduction for
9 dividends paid under the Internal Revenue Code.
10 (3) In the case of a trust or estate, the trust or estate is required to
11 include only the portion of the modifications not passed through
12 to beneficiaries.
13 (4) In the case of a taxpayer for which modifications are required
14 to be applied against a separately stated net operating loss under
15 IC 6-3-2-2.5 or IC 6-3-2-2.6, the modifications required under this
16 section must be adjusted to reflect the required application of the
17 modifications against a separately stated net operating loss, in
18 order to avoid the application of a particular modification
19 multiple times.
20 SECTION 2. [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]
21 (a) IC 6-3-1-3.5, as amended by this act, applies to taxable years
22 beginning after December 31, 2024.
23 (b) This SECTION expires January 1, 2028.
24 SECTION 3. An emergency is declared for this act.
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