Indiana 2025 Regular Session

Indiana House Bill HB1565 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	HOUSE BILL No. 1565
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 6-3.1-42.5.
7	7	Synopsis: Social service provider tax credit. Allows a qualified
8	8	taxpayer to claim a credit against the taxpayer's state tax liability for
9	9	designated contributions to qualified nonprofit organizations that
10	10	provide: (1) comprehensive case management services for at-risk
11	11	families; (2) family support services; (3) in-school programs,
12	12	community based events, or online resources to assist fathers in
13	13	learning and improving parenting skills; or (4) programs that provide
14	14	mutual support systems among mothers in raising children or
15	15	information for mothers to enhance child development.
16	16	Effective: January 1, 2026.
17	17	Smith H, Heaton
18	18	January 21, 2025, read first time and referred to Committee on Ways and Means.
19	19	2025 IN 1565—LS 7028/DI 134 Introduced
20	20	First Regular Session of the 124th General Assembly (2025)
21	21	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
22	22	Constitution) is being amended, the text of the existing provision will appear in this style type,
23	23	additions will appear in this style type, and deletions will appear in this style type.
24	24	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
25	25	provision adopted), the text of the new provision will appear in this style type. Also, the
26	26	word NEW will appear in that style type in the introductory clause of each SECTION that adds
27	27	a new provision to the Indiana Code or the Indiana Constitution.
28	28	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
29	29	between statutes enacted by the 2024 Regular Session of the General Assembly.
30	30	HOUSE BILL No. 1565
31	31	A BILL FOR AN ACT to amend the Indiana Code concerning
32	32	taxation.
33	33	Be it enacted by the General Assembly of the State of Indiana:
34	34	1 SECTION 1. IC 6-3.1-42.5 IS ADDED TO THE INDIANA CODE
35	35	2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
36	36	3 JANUARY 1, 2026]:
37	37	4 Chapter 42.5. Social Service Provider Tax Credit
38	38	5 Sec. 1. This chapter applies only to taxable years beginning after
39	39	6 December 31, 2025.
40	40	7 Sec. 2. As used in this chapter, "credit" refers to the social
41	41	8 service provider tax credit allowable under this chapter.
42	42	9 Sec. 3. As used in this chapter, "designated contribution" means
43	43	10 a monetary contribution to a qualified nonprofit organization that
44	44	11 the contributor designates at the time of the contribution as being
45	45	12 made for the purpose of the credit.
46	46	13 Sec. 4. As used in this chapter, "pass through entity" has the
47	47	14 meaning set forth in IC 6-3-1-35.
48	48	15 Sec. 5. (a) As used in this chapter, "qualified nonprofit
49	49	16 organization" means a nonprofit organization that meets the
50	50	17 following conditions:
51	51	2025 IN 1565—LS 7028/DI 134 2
52	52	1 (1) Is exempt from federal income taxation under Section
53	53	2 501(c)(3) of the Internal Revenue Code.
54	54	3 (2) Is authorized to conduct business in Indiana.
55	55	4 (3) Has provided any of the following services in Indiana for
56	56	5 at least ten (10) years preceding the organization's initial
57	57	6 application for eligibility:
58	58	7 (A) Comprehensive case management services for at-risk
59	59	8 families based on the assessment of family strengths and
60	60	9 needs.
61	61	10 (B) Family support services.
62	62	11 (C) In-school programs, community based events, or online
63	63	12 resources to assist fathers in learning and improving
64	64	13 parenting skills.
65	65	14 (D) Programs that provide mutual support systems among
66	66	15 mothers in raising children or information for mothers to
67	67	16 enhance child development.
68	68	17 (4) Does not provide abortion services, either directly or
69	69	18 indirectly, or offer information related to such services.
70	70	19 (b) Services described in subsection (a)(3)(A) through (a)(3)(D)
71	71	20 must be implemented with a continuous quality improvement
72	72	21 process and evaluated based on outcomes.
73	73	22 Sec. 6. As used in this chapter, "state tax liability" means a
74	74	23 taxpayer's total tax liability that is incurred under:
75	75	24 (1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
76	76	25 (2) IC 6-5.5 (the financial institutions tax); and
77	77	26 (3) IC 27-1-18-2 (the insurance premiums tax);
78	78	27 as computed after the application of the credits that under
79	79	28 IC 6-3.1-1-2 are to be applied before the credit provided by this
80	80	29 chapter.
81	81	30 Sec. 7. As used in this chapter, "taxpayer" means an individual
82	82	31 or entity that has any state tax liability.
83	83	32 Sec. 8. A taxpayer that makes a designated contribution that
84	84	33 meets the requirements of this chapter is eligible to apply for a
85	85	34 credit in the amount and under the conditions provided by this
86	86	35 chapter against the taxpayer's state tax liability.
87	87	36 Sec. 9. An organization or qualified nonprofit organization must
88	88	37 respectively apply or reapply for certification as a qualified
89	89	38 nonprofit organization each calendar year by submitting to the
90	90	39 department a signed application form containing:
91	91	40 (1) a description of the qualifying services and resources
92	92	41 provided by the organization;
93	93	42 (2) the total number of individuals served during the previous
94	94	2025 IN 1565—LS 7028/DI 134 3
95	95	1 calendar year and the number of those individuals who were
96	96	2 served and provided resources during that year using
97	97	3 designated contributions;
98	98	4 (3) outcomes for services provided;
99	99	5 (4) the organization's financial information;
100	100	6 (5) the organization's contact information;
101	101	7 (6) a statement, signed under penalty of perjury by an officer
102	102	8 of the organization, that the organization meets all criteria to
103	103	9 qualify as a qualified nonprofit organization, has fulfilled the
104	104	10 requirements for the previous calendar year (as applicable),
105	105	11 and intends to fulfill the requirements for the next calendar
106	106	12 year; and
107	107	13 (7) any other documentation requested by the department to
108	108	14 verify an organization's eligibility.
109	109	15 Sec. 10. The department shall do the following:
110	110	16 (1) Issue a certificate of eligibility to an eligible applicant
111	111	17 stating that the organization meets the qualifications of a
112	112	18 qualified nonprofit organization.
113	113	19 (2) Revoke an organization's certificate of eligibility if the
114	114	20 organization violates the provisions of this chapter or fails to
115	115	21 maintain the eligibility requirements of this chapter.
116	116	22 (3) Require the return of designated contributions made to an
117	117	23 organization that has had the organization's certification as
118	118	24 a qualified nonprofit organization revoked or that otherwise
119	119	25 fails to comply with the requirements of this chapter.
120	120	26 Sec. 11. An organization that is required to return designated
121	121	27 contributions under section 10(3) of this chapter is ineligible for
122	122	28 future qualification as a qualified nonprofit organization. An
123	123	29 organization whose certification as an eligible organization lapses
124	124	30 or is revoked for a reason other than the reason described in
125	125	31 section 10(2) of this chapter may reapply for certification as a
126	126	32 qualified nonprofit organization.
127	127	33 Sec. 12. A qualified nonprofit organization shall do the
128	128	34 following:
129	129	35 (1) Conduct a local, state, and national criminal background
130	130	36 check of all individuals working directly with children in a
131	131	37 program funded by designated contributions that includes the
132	132	38 use of:
133	133	39 (A) a commercial multistate and multi-jurisdiction
134	134	40 criminal records locator or other similar commercial
135	135	41 nationwide data base; and
136	136	42 (B) the national sex offender registry data base maintained
137	137	2025 IN 1565—LS 7028/DI 134 4
138	138	1 by the United States Department of Justice or a successor
139	139	2 agency.
140	140	3 (2) Spend all designated contributions, other than the amount
141	141	4 described in subdivision (3), to provide services and resources
142	142	5 for Indiana residents.
143	143	6 (3) Spend not more than five percent (5%) of the total dollar
144	144	7 amount of designated contributions on administrative
145	145	8 expenses.
146	146	9 (4) Submit to the department, not later than one hundred
147	147	10 eighty (180) days after the end of the qualified nonprofit
148	148	11 organization's fiscal year:
149	149	12 (A) a copy of the qualified nonprofit organization's annual
150	150	13 financial audit; and
151	151	14 (B) a copy of the qualified nonprofit organization's most
152	152	15 recent Form 990 filed with the Internal Revenue Service.
153	153	16 (5) Not later than thirty (30) days after receipt of a designated
154	154	17 contribution, provide to the taxpayer making the designated
155	155	18 contribution a certificate of designated contribution that
156	156	19 includes:
157	157	20 (A) the taxpayer's name;
158	158	21 (B) the qualified nonprofit organization's name;
159	159	22 (C) the amount of the designated contribution; and
160	160	23 (D) the date the designated contribution was made.
161	161	24 Sec. 13. Subject to the limitations provided by this chapter and
162	162	25 at the election of the taxpayer, a credit is allowed against the
163	163	26 taxpayer's state tax liability for the taxable year in which the
164	164	27 taxpayer makes a designated contribution to a qualified nonprofit
165	165	28 organization.
166	166	29 Sec. 14. Subject to section 15 of this chapter, the amount
167	167	30 allowable as a credit under this chapter for any taxable year is
168	168	31 equal to the lesser of:
169	169	32 (1) the total amount of the designated contributions made by
170	170	33 the taxpayer to one (1) or more qualified nonprofit
171	171	34 organizations; or
172	172	35 (2) fifty percent (50%) of the taxpayer's state tax liability.
173	173	36 Sec. 15. (a) A taxpayer may not apply for a credit in excess of
174	174	37 one million dollars ($1,000,000) during a taxable year.
175	175	38 (b) The total amount of credits awarded under this chapter may
176	176	39 not exceed five million dollars ($5,000,000) during a state fiscal
177	177	40 year. Any credits under this chapter are granted on a first-come,
178	178	41 first-served basis.
179	179	42 Sec. 16. (a) If the credit provided by this chapter exceeds the
180	180	2025 IN 1565—LS 7028/DI 134 5
181	181	1 taxpayer's state tax liability for the taxable year for which the
182	182	2 credit is first claimed, the excess may be carried forward to
183	183	3 succeeding taxable years and used as a credit against the
184	184	4 taxpayer's state tax liability during those taxable years. Each time
185	185	5 the credit is carried forward to a succeeding taxable year, the
186	186	6 credit is reduced by the amount that was used as a credit during
187	187	7 the immediately preceding taxable year.
188	188	8 (b) A taxpayer is not entitled to a carryback or refund of any
189	189	9 unused credit.
190	190	10 Sec. 17. If a pass through entity is entitled to a credit under this
191	191	11 chapter but does not have state tax liability against which the
192	192	12 credit may be applied, a shareholder, partner, or member of the
193	193	13 pass through entity is entitled to a credit equal to:
194	194	14 (1) the credit determined for the pass through entity for the
195	195	15 taxable year; multiplied by
196	196	16 (2) the percentage of the pass through entity's distributive
197	197	17 income to which the shareholder, partner, or member is
198	198	18 entitled.
199	199	19 Sec. 18. A taxable entity may not convey, assign, or transfer a
200	200	20 credit awarded under this chapter to another taxable entity unless
201	201	21 substantially all of the assets of the taxable entity are conveyed,
202	202	22 assigned, or transferred in the same transaction.
203	203	23 Sec. 19. (a) To apply a credit against the taxpayer's state tax
204	204	24 liability, a taxpayer must claim the credit on the taxpayer's annual
205	205	25 state tax return or returns in the manner prescribed by the
206	206	26 department.
207	207	27 (b) The taxpayer shall submit to the department the information
208	208	28 that the department determines is necessary for the department to
209	209	29 determine whether the taxpayer is eligible for the credit.
210	210	30 (c) The department shall notify a taxpayer in writing of the
211	211	31 department's decision to grant or deny the application. If the
212	212	32 department denies a taxpayer's application, the department shall
213	213	33 include in the notice of denial the reasons for the department's
214	214	34 decision.
215	215	35 Sec. 20. The department shall publish on the department's
216	216	36 website the following information:
217	217	37 (1) The form the department prescribes for claiming the
218	218	38 credit provided by this chapter.
219	219	39 (2) A timeline for receiving the credit provided by this
220	220	40 chapter.
221	221	41 (3) The total amount of credits awarded under this chapter
222	222	42 during the current state fiscal year.
223	223	2025 IN 1565—LS 7028/DI 134 6
224	224	1 (4) The requirements and process for an organization to be
225	225	2 certified as a qualified nonprofit organization.
226	226	3 (5) A list of organizations currently certified as qualified
227	227	4 nonprofit organizations.
228	228	5 Sec. 21. The expiration of this chapter does not affect the
229	229	6 carryforward of a credit under this chapter or those credits for
230	230	7 which a taxable entity is eligible after the date this chapter expires
231	231	8 based on designated contributions made before that date.
232	232	9 Sec. 22. This chapter expires January 1, 2035.
233	233	2025 IN 1565—LS 7028/DI 134