Introduced Version
HOUSE BILL No. 1636
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3-1-3.5; IC 20-43-2-3; IC 20-51.
Synopsis: Dynamic choice scholarships. Provides eligible choice
scholarship students with the option to receive a dynamic choice
scholarship (scholarship). Provides that a scholarship may be used
toward certain dynamic education costs. Allows the department of
education to: (1) create forms and methods for the administration and
oversight of a scholarship; (2) create an account system to
accommodate distributions of a scholarship; and (3) audit up to 3% of
scholarship accounts annually to protect against fraud or misuse of
funds. Provides that a distribution to a scholarship account is
considered tax exempt if the distribution is used toward dynamic
education costs.
Effective: July 1, 2025.
Teshka, Smith H, Ireland
January 21, 2025, read first time and referred to Committee on Education.
2025 IN 1636—LS 7432/DI 143 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. 1636
A BILL FOR AN ACT to amend the Indiana Code concerning
education.
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 JULY 1, 2025]: Sec. 3.5. When used in this article, the
4 term "adjusted gross income" shall mean the following:
5 (a) In the case of all individuals, "adjusted gross income" (as
6 defined in Section 62 of the Internal Revenue Code), modified as
7 follows:
8 (1) Subtract income that is exempt from taxation under this article
9 by the Constitution and statutes of the United States.
10 (2) Except as provided in subsection (c), add an amount equal to
11 any deduction or deductions allowed or allowable pursuant to
12 Section 62 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 (3) Subtract one thousand dollars ($1,000), or in the case of a
16 joint return filed by a husband and wife, subtract for each spouse
17 one thousand dollars ($1,000).
2025 IN 1636—LS 7432/DI 143 2
1 (4) Subtract one thousand dollars ($1,000) for:
2 (A) each of the exemptions provided by Section 151(c) of the
3 Internal Revenue Code (as effective January 1, 2017);
4 (B) each additional amount allowable under Section 63(f) of
5 the Internal Revenue Code; and
6 (C) the spouse of the taxpayer if a separate return is made by
7 the taxpayer and if the spouse, for the calendar year in which
8 the taxable year of the taxpayer begins, has no gross income
9 and is not the dependent of another taxpayer.
10 (5) Subtract each of the following:
11 (A) One thousand five hundred dollars ($1,500) for each of the
12 exemptions allowed under Section 151(c)(1)(B) of the Internal
13 Revenue Code (as effective January 1, 2004), except that in
14 the first taxable year in which a particular exemption is
15 allowed under Section 151(c)(1)(B) of the Internal Revenue
16 Code (as effective January 1, 2004), subtract three thousand
17 dollars ($3,000) for that exemption.
18 (B) One thousand five hundred dollars ($1,500) for each
19 exemption allowed under Section 151(c) of the Internal
20 Revenue Code (as effective January 1, 2017) for an individual:
21 (i) who is less than nineteen (19) years of age or is a
22 full-time student who is less than twenty-four (24) years of
23 age;
24 (ii) for whom the taxpayer is the legal guardian; and
25 (iii) for whom the taxpayer does not claim an exemption
26 under clause (A).
27 (C) Five hundred dollars ($500) for each additional amount
28 allowable under Section 63(f)(1) of the Internal Revenue Code
29 if the federal adjusted gross income of the taxpayer, or the
30 taxpayer and the taxpayer's spouse in the case of a joint return,
31 is less than forty thousand dollars ($40,000). In the case of a
32 married individual filing a separate return, the qualifying
33 income amount in this clause is equal to twenty thousand
34 dollars ($20,000).
35 (D) Three thousand dollars ($3,000) for each exemption
36 allowed under Section 151(c) of the Internal Revenue Code (as
37 effective January 1, 2017) for an individual who is:
38 (i) an adopted child of the taxpayer; and
39 (ii) less than nineteen (19) years of age or is a full-time
40 student who is less than twenty-four (24) years of age.
41 This amount is in addition to any amount subtracted under
42 clause (A) or (B).
2025 IN 1636—LS 7432/DI 143 3
1 This amount is in addition to the amount subtracted under
2 subdivision (4).
3 (6) Subtract any amounts included in federal adjusted gross
4 income under Section 111 of the Internal Revenue Code as a
5 recovery of items previously deducted as an itemized deduction
6 from adjusted gross income.
7 (7) Subtract any amounts included in federal adjusted gross
8 income under the Internal Revenue Code which amounts were
9 received by the individual as supplemental railroad retirement
10 annuities under 45 U.S.C. 231 and which are not deductible under
11 subdivision (1).
12 (8) Subtract an amount equal to the amount of federal Social
13 Security and Railroad Retirement benefits included in a taxpayer's
14 federal gross income by Section 86 of the Internal Revenue Code.
15 (9) In the case of a nonresident taxpayer or a resident taxpayer
16 residing in Indiana for a period of less than the taxpayer's entire
17 taxable year, the total amount of the deductions allowed pursuant
18 to subdivisions (3), (4), and (5) shall be reduced to an amount
19 which bears the same ratio to the total as the taxpayer's income
20 taxable in Indiana bears to the taxpayer's total income.
21 (10) In the case of an individual who is a recipient of assistance
22 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
23 subtract an amount equal to that portion of the individual's
24 adjusted gross income with respect to which the individual is not
25 allowed under federal law to retain an amount to pay state and
26 local income taxes.
27 (11) In the case of an eligible individual, subtract the amount of
28 a Holocaust victim's settlement payment included in the
29 individual's federal adjusted gross income.
30 (12) Subtract an amount equal to the portion of any premiums
31 paid during the taxable year by the taxpayer for a qualified long
32 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
33 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
34 file a joint income tax return or the taxpayer is otherwise entitled
35 to a deduction under this subdivision for the taxpayer's spouse, or
36 both.
37 (13) Subtract an amount equal to the lesser of:
38 (A) two thousand five hundred dollars ($2,500), or one
39 thousand two hundred fifty dollars ($1,250) in the case of a
40 married individual filing a separate return; or
41 (B) the amount of property taxes that are paid during the
42 taxable year in Indiana by the individual on the individual's
2025 IN 1636—LS 7432/DI 143 4
1 principal place of residence.
2 (14) Subtract an amount equal to the amount of a September 11
3 terrorist attack settlement payment included in the individual's
4 federal adjusted gross income.
5 (15) Add or subtract the amount necessary to make the adjusted
6 gross income of any taxpayer that owns property for which bonus
7 depreciation was allowed in the current taxable year or in an
8 earlier taxable year equal to the amount of adjusted gross income
9 that would have been computed had an election not been made
10 under Section 168(k) of the Internal Revenue Code to apply bonus
11 depreciation to the property in the year that it was placed in
12 service.
13 (16) Add an amount equal to any deduction allowed under
14 Section 172 of the Internal Revenue Code (concerning net
15 operating losses).
16 (17) Add or subtract the amount necessary to make the adjusted
17 gross income of any taxpayer that placed Section 179 property (as
18 defined in Section 179 of the Internal Revenue Code) in service
19 in the current taxable year or in an earlier taxable year equal to
20 the amount of adjusted gross income that would have been
21 computed had an election for federal income tax purposes not
22 been made for the year in which the property was placed in
23 service to take deductions under Section 179 of the Internal
24 Revenue Code in a total amount exceeding the sum of:
25 (A) twenty-five thousand dollars ($25,000) to the extent
26 deductions under Section 179 of the Internal Revenue Code
27 were not elected as provided in clause (B); and
28 (B) for taxable years beginning after December 31, 2017, the
29 deductions elected under Section 179 of the Internal Revenue
30 Code on property acquired in an exchange if:
31 (i) the exchange would have been eligible for
32 nonrecognition of gain or loss under Section 1031 of the
33 Internal Revenue Code in effect on January 1, 2017;
34 (ii) the exchange is not eligible for nonrecognition of gain or
35 loss under Section 1031 of the Internal Revenue Code; and
36 (iii) the taxpayer made an election to take deductions under
37 Section 179 of the Internal Revenue Code with regard to the
38 acquired property in the year that the property was placed
39 into service.
40 The amount of deductions allowable for an item of property
41 under this clause may not exceed the amount of adjusted gross
42 income realized on the property that would have been deferred
2025 IN 1636—LS 7432/DI 143 5
1 under the Internal Revenue Code in effect on January 1, 2017.
2 (18) Subtract an amount equal to the amount of the taxpayer's
3 qualified military income that was not excluded from the
4 taxpayer's gross income for federal income tax purposes under
5 Section 112 of the Internal Revenue Code.
6 (19) Subtract income that is:
7 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
8 derived from patents); and
9 (B) included in the individual's federal adjusted gross income
10 under the Internal Revenue Code.
11 (20) Add an amount equal to any income not included in gross
12 income as a result of the deferral of income arising from business
13 indebtedness discharged in connection with the reacquisition after
14 December 31, 2008, and before January 1, 2011, of an applicable
15 debt instrument, as provided in Section 108(i) of the Internal
16 Revenue Code. Subtract the amount necessary from the adjusted
17 gross income of any taxpayer that added an amount to adjusted
18 gross income in a previous year to offset the amount included in
19 federal gross income as a result of the deferral of income arising
20 from business indebtedness discharged in connection with the
21 reacquisition after December 31, 2008, and before January 1,
22 2011, of an applicable debt instrument, as provided in Section
23 108(i) of the Internal Revenue Code.
24 (21) Add the amount excluded from federal gross income under
25 Section 103 of the Internal Revenue Code for interest received on
26 an obligation of a state other than Indiana, or a political
27 subdivision of such a state, that is acquired by the taxpayer after
28 December 31, 2011. For purposes of this subdivision:
29 (A) if the taxpayer receives interest from a pass through entity,
30 a regulated investment company, a hedge fund, or similar
31 arrangement, the taxpayer will be considered to have acquired
32 the obligation on the date the entity acquired the obligation;
33 (B) if ownership of the obligation occurs by means other than
34 a purchase, the date of acquisition of the obligation shall be
35 the date ownership of the obligation was transferred, except to
36 the extent provided in clause (A), and if a portion of the
37 obligation is acquired on multiple dates, the date of acquisition
38 shall be considered separately for each portion of the
39 obligation; and
40 (C) if ownership of the obligation occurred as the result of a
41 refinancing of another obligation, the acquisition date shall be
42 the date on which the obligation was refinanced.
2025 IN 1636—LS 7432/DI 143 6
1 (22) Subtract an amount as described in Section 1341(a)(2) of the
2 Internal Revenue Code to the extent, if any, that the amount was
3 previously included in the taxpayer's adjusted gross income for a
4 prior taxable year.
5 (23) For taxable years beginning after December 25, 2016, add an
6 amount equal to the deduction for deferred foreign income that
7 was claimed by the taxpayer for the taxable year under Section
8 965(c) of the Internal Revenue Code.
9 (24) Subtract any interest expense paid or accrued in the current
10 taxable year but not deducted as a result of the limitation imposed
11 under Section 163(j)(1) of the Internal Revenue Code. Add any
12 interest expense paid or accrued in a previous taxable year but
13 allowed as a deduction under Section 163 of the Internal Revenue
14 Code in the current taxable year. For purposes of this subdivision,
15 an interest expense is considered paid or accrued only in the first
16 taxable year the deduction would have been allowable under
17 Section 163 of the Internal Revenue Code if the limitation under
18 Section 163(j)(1) of the Internal Revenue Code did not exist.
19 (25) Subtract the amount that would have been excluded from
20 gross income but for the enactment of Section 118(b)(2) of the
21 Internal Revenue Code for taxable years ending after December
22 22, 2017.
23 (26) For taxable years beginning after December 31, 2019, and
24 before January 1, 2021, add an amount of the deduction claimed
25 under Section 62(a)(22) of the Internal Revenue Code.
26 (27) For taxable years beginning after December 31, 2019, for
27 payments made by an employer under an education assistance
28 program after March 27, 2020:
29 (A) add the amount of payments by an employer that are
30 excluded from the taxpayer's federal gross income under
31 Section 127(c)(1)(B) of the Internal Revenue Code; and
32 (B) deduct the interest allowable under Section 221 of the
33 Internal Revenue Code, if the disallowance under Section
34 221(e)(1) of the Internal Revenue Code did not apply to the
35 payments described in clause (A). For purposes of applying
36 Section 221(b) of the Internal Revenue Code to the amount
37 allowable under this clause, the amount under clause (A) shall
38 not be added to adjusted gross income.
39 (28) Add an amount equal to the remainder of:
40 (A) the amount allowable as a deduction under Section 274(n)
41 of the Internal Revenue Code; minus
42 (B) the amount otherwise allowable as a deduction under
2025 IN 1636—LS 7432/DI 143 7
1 Section 274(n) of the Internal Revenue Code, if Section
2 274(n)(2)(D) of the Internal Revenue Code was not in effect
3 for amounts paid or incurred after December 31, 2020.
4 (29) For taxable years beginning after December 31, 2017, and
5 before January 1, 2021, add an amount equal to the excess
6 business loss of the taxpayer as defined in Section 461(l)(3) of the
7 Internal Revenue Code. In addition:
8 (A) If a taxpayer has an excess business loss under this
9 subdivision and also has modifications under subdivisions (15)
10 and (17) for property placed in service during the taxable year,
11 the taxpayer shall treat a portion of the taxable year
12 modifications for that property as occurring in the taxable year
13 the property is placed in service and a portion of the
14 modifications as occurring in the immediately following
15 taxable year.
16 (B) The portion of the modifications under subdivisions (15)
17 and (17) for property placed in service during the taxable year
18 treated as occurring in the taxable year in which the property
19 is placed in service equals:
20 (i) the modification for the property otherwise determined
21 under this section; minus
22 (ii) the excess business loss disallowed under this
23 subdivision;
24 but not less than zero (0).
25 (C) The portion of the modifications under subdivisions (15)
26 and (17) for property placed in service during the taxable year
27 treated as occurring in the taxable year immediately following
28 the taxable year in which the property is placed in service
29 equals the modification for the property otherwise determined
30 under this section minus the amount in clause (B).
31 (D) Any reallocation of modifications between taxable years
32 under clauses (B) and (C) shall be first allocated to the
33 modification under subdivision (15), then to the modification
34 under subdivision (17).
35 (30) Add an amount equal to the amount excluded from federal
36 gross income under Section 108(f)(5) of the Internal Revenue
37 Code. For purposes of this subdivision:
38 (A) if an amount excluded under Section 108(f)(5) of the
39 Internal Revenue Code would be excludible under Section
40 108(a)(1)(B) of the Internal Revenue Code, the exclusion
41 under Section 108(a)(1)(B) of the Internal Revenue Code shall
42 take precedence; and
2025 IN 1636—LS 7432/DI 143 8
1 (B) if an amount would have been excludible under Section
2 108(f)(5) of the Internal Revenue Code as in effect on January
3 1, 2020, the amount is not required to be added back under this
4 subdivision.
5 (31) For taxable years ending after March 12, 2020, subtract an
6 amount equal to the deduction disallowed pursuant to:
7 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
8 as modified by Sections 206 and 207 of the Taxpayer Certainty
9 and Disaster Relief Tax Act (Division EE of Public Law
10 116-260); and
11 (B) Section 3134(e) of the Internal Revenue Code.
12 (32) Subtract the amount of an ESA annual grant amount and, as
13 applicable, a CSA annual grant amount distributed to a taxpayer's
14 Indiana education scholarship account under IC 20-51.4 that is
15 used for an ESA or CSA qualified expense (as defined in
16 IC 20-51.4-2) or to an Indiana enrichment scholarship account
17 under IC 20-52 that is used for qualified expenses (as defined in
18 IC 20-52-2-6), to the extent the distribution used for the qualified
19 expense is included in the taxpayer's federal adjusted gross
20 income under the Internal Revenue Code.
21 (33) For taxable years beginning after December 31, 2019, and
22 before January 1, 2021, add an amount equal to the amount of
23 unemployment compensation excluded from federal gross income
24 under Section 85(c) of the Internal Revenue Code.
25 (34) For taxable years beginning after December 31, 2022,
26 subtract an amount equal to the deduction disallowed under
27 Section 280C(h) of the Internal Revenue Code.
28 (35) For taxable years beginning after December 31, 2021, add or
29 subtract amounts related to specified research or experimental
30 procedures as required under IC 6-3-2-29.
31 (36) Subtract any other amounts the taxpayer is entitled to deduct
32 under IC 6-3-2.
33 (37) Subtract the amount of a CSA annual grant amount
34 distributed to a taxpayer's career scholarship account under
35 IC 20-51.4-4.5 that is used for a CSA qualified expense (as
36 defined in IC 20-51.4-2-3.8), to the extent the distribution used
37 for the CSA qualified expense is included in the taxpayer's federal
38 adjusted gross income under the Internal Revenue Code.
39 (38) Subtract the amount of a dynamic choice scholarship
40 elected under IC 20-51-4-7(c)(2) and distributed to a
41 taxpayer's account that is used for a dynamic education costs
42 expense (as defined in IC 20-51-1-4.2), to the extent the
2025 IN 1636—LS 7432/DI 143 9
1 distribution used for the dynamic education costs expense is
2 included in the taxpayer's federal adjusted gross income
3 under the Internal Revenue Code.
4 (b) In the case of corporations, the same as "taxable income" (as
5 defined in Section 63 of the Internal Revenue Code) adjusted as
6 follows:
7 (1) Subtract income that is exempt from taxation under this article
8 by the Constitution and statutes of the United States.
9 (2) Add an amount equal to any deduction or deductions allowed
10 or allowable pursuant to Section 170 of the Internal Revenue
11 Code (concerning charitable contributions).
12 (3) Except as provided in subsection (c), add an amount equal to
13 any deduction or deductions allowed or allowable pursuant to
14 Section 63 of the Internal Revenue Code for taxes based on or
15 measured by income and levied at the state level by any state of
16 the United States.
17 (4) Subtract an amount equal to the amount included in the
18 corporation's taxable income under Section 78 of the Internal
19 Revenue Code (concerning foreign tax credits).
20 (5) Add or subtract the amount necessary to make the adjusted
21 gross income of any taxpayer that owns property for which bonus
22 depreciation was allowed in the current taxable year or in an
23 earlier taxable year equal to the amount of adjusted gross income
24 that would have been computed had an election not been made
25 under Section 168(k) of the Internal Revenue Code to apply bonus
26 depreciation to the property in the year that it was placed in
27 service.
28 (6) Add an amount equal to any deduction allowed under Section
29 172 of the Internal Revenue Code (concerning net operating
30 losses).
31 (7) Add or subtract the amount necessary to make the adjusted
32 gross income of any taxpayer that placed Section 179 property (as
33 defined in Section 179 of the Internal Revenue Code) in service
34 in the current taxable year or in an earlier taxable year equal to
35 the amount of adjusted gross income that would have been
36 computed had an election for federal income tax purposes not
37 been made for the year in which the property was placed in
38 service to take deductions under Section 179 of the Internal
39 Revenue Code in a total amount exceeding the sum of:
40 (A) twenty-five thousand dollars ($25,000) to the extent
41 deductions under Section 179 of the Internal Revenue Code
42 were not elected as provided in clause (B); and
2025 IN 1636—LS 7432/DI 143 10
1 (B) for taxable years beginning after December 31, 2017, the
2 deductions elected under Section 179 of the Internal Revenue
3 Code on property acquired in an exchange if:
4 (i) the exchange would have been eligible for
5 nonrecognition of gain or loss under Section 1031 of the
6 Internal Revenue Code in effect on January 1, 2017;
7 (ii) the exchange is not eligible for nonrecognition of gain or
8 loss under Section 1031 of the Internal Revenue Code; and
9 (iii) the taxpayer made an election to take deductions under
10 Section 179 of the Internal Revenue Code with regard to the
11 acquired property in the year that the property was placed
12 into service.
13 The amount of deductions allowable for an item of property
14 under this clause may not exceed the amount of adjusted gross
15 income realized on the property that would have been deferred
16 under the Internal Revenue Code in effect on January 1, 2017.
17 (8) Add to the extent required by IC 6-3-2-20:
18 (A) the amount of intangible expenses (as defined in
19 IC 6-3-2-20) for the taxable year that reduced the corporation's
20 taxable income (as defined in Section 63 of the Internal
21 Revenue Code) for federal income tax purposes; and
22 (B) any directly related interest expenses (as defined in
23 IC 6-3-2-20) that reduced the corporation's adjusted gross
24 income (determined without regard to this subdivision). For
25 purposes of this clause, any directly related interest expense
26 that constitutes business interest within the meaning of Section
27 163(j) of the Internal Revenue Code shall be considered to
28 have reduced the taxpayer's federal taxable income only in the
29 first taxable year in which the deduction otherwise would have
30 been allowable under Section 163 of the Internal Revenue
31 Code if the limitation under Section 163(j)(1) of the Internal
32 Revenue Code did not exist.
33 (9) Add an amount equal to any deduction for dividends paid (as
34 defined in Section 561 of the Internal Revenue Code) to
35 shareholders of a captive real estate investment trust (as defined
36 in section 34.5 of this chapter).
37 (10) Subtract income that is:
38 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
39 derived from patents); and
40 (B) included in the corporation's taxable income under the
41 Internal Revenue Code.
42 (11) Add an amount equal to any income not included in gross
2025 IN 1636—LS 7432/DI 143 11
1 income as a result of the deferral of income arising from business
2 indebtedness discharged in connection with the reacquisition after
3 December 31, 2008, and before January 1, 2011, of an applicable
4 debt instrument, as provided in Section 108(i) of the Internal
5 Revenue Code. Subtract from the adjusted gross income of any
6 taxpayer that added an amount to adjusted gross income in a
7 previous year the amount necessary to offset the amount included
8 in federal gross income as a result of the deferral of income
9 arising from business indebtedness discharged in connection with
10 the reacquisition after December 31, 2008, and before January 1,
11 2011, of an applicable debt instrument, as provided in Section
12 108(i) of the Internal Revenue Code.
13 (12) Add the amount excluded from federal gross income under
14 Section 103 of the Internal Revenue Code for interest received on
15 an obligation of a state other than Indiana, or a political
16 subdivision of such a state, that is acquired by the taxpayer after
17 December 31, 2011. For purposes of this subdivision:
18 (A) if the taxpayer receives interest from a pass through entity,
19 a regulated investment company, a hedge fund, or similar
20 arrangement, the taxpayer will be considered to have acquired
21 the obligation on the date the entity acquired the obligation;
22 (B) if ownership of the obligation occurs by means other than
23 a purchase, the date of acquisition of the obligation shall be
24 the date ownership of the obligation was transferred, except to
25 the extent provided in clause (A), and if a portion of the
26 obligation is acquired on multiple dates, the date of acquisition
27 shall be considered separately for each portion of the
28 obligation; and
29 (C) if ownership of the obligation occurred as the result of a
30 refinancing of another obligation, the acquisition date shall be
31 the date on which the obligation was refinanced.
32 (13) For taxable years beginning after December 25, 2016:
33 (A) for a corporation other than a real estate investment trust,
34 add:
35 (i) an amount equal to the amount reported by the taxpayer
36 on IRC 965 Transition Tax Statement, line 1; or
37 (ii) if the taxpayer deducted an amount under Section 965(c)
38 of the Internal Revenue Code in determining the taxpayer's
39 taxable income for purposes of the federal income tax, the
40 amount deducted under Section 965(c) of the Internal
41 Revenue Code; and
42 (B) for a real estate investment trust, add an amount equal to
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1 the deduction for deferred foreign income that was claimed by
2 the taxpayer for the taxable year under Section 965(c) of the
3 Internal Revenue Code, but only to the extent that the taxpayer
4 included income pursuant to Section 965 of the Internal
5 Revenue Code in its taxable income for federal income tax
6 purposes or is required to add back dividends paid under
7 subdivision (9).
8 (14) Add an amount equal to the deduction that was claimed by
9 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
10 Internal Revenue Code (attributable to global intangible
11 low-taxed income). The taxpayer shall separately specify the
12 amount of the reduction under Section 250(a)(1)(B)(i) of the
13 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
14 Internal Revenue Code.
15 (15) Subtract any interest expense paid or accrued in the current
16 taxable year but not deducted as a result of the limitation imposed
17 under Section 163(j)(1) of the Internal Revenue Code. Add any
18 interest expense paid or accrued in a previous taxable year but
19 allowed as a deduction under Section 163 of the Internal Revenue
20 Code in the current taxable year. For purposes of this subdivision,
21 an interest expense is considered paid or accrued only in the first
22 taxable year the deduction would have been allowable under
23 Section 163 of the Internal Revenue Code if the limitation under
24 Section 163(j)(1) of the Internal Revenue Code did not exist.
25 (16) Subtract the amount that would have been excluded from
26 gross income but for the enactment of Section 118(b)(2) of the
27 Internal Revenue Code for taxable years ending after December
28 22, 2017.
29 (17) Add an amount equal to the remainder of:
30 (A) the amount allowable as a deduction under Section 274(n)
31 of the Internal Revenue Code; minus
32 (B) the amount otherwise allowable as a deduction under
33 Section 274(n) of the Internal Revenue Code, if Section
34 274(n)(2)(D) of the Internal Revenue Code was not in effect
35 for amounts paid or incurred after December 31, 2020.
36 (18) For taxable years ending after March 12, 2020, subtract an
37 amount equal to the deduction disallowed pursuant to:
38 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
39 as modified by Sections 206 and 207 of the Taxpayer Certainty
40 and Disaster Relief Tax Act (Division EE of Public Law
41 116-260); and
42 (B) Section 3134(e) of the Internal Revenue Code.
2025 IN 1636—LS 7432/DI 143 13
1 (19) For taxable years beginning after December 31, 2022,
2 subtract an amount equal to the deduction disallowed under
3 Section 280C(h) of the Internal Revenue Code.
4 (20) For taxable years beginning after December 31, 2021,
5 subtract the amount of any:
6 (A) federal, state, or local grant received by the taxpayer; and
7 (B) discharged federal, state, or local indebtedness incurred by
8 the taxpayer;
9 for purposes of providing or expanding access to broadband
10 service in this state.
11 (21) For taxable years beginning after December 31, 2021, add or
12 subtract amounts related to specified research or experimental
13 procedures as required under IC 6-3-2-29.
14 (22) Add or subtract any other amounts the taxpayer is:
15 (A) required to add or subtract; or
16 (B) entitled to deduct;
17 under IC 6-3-2.
18 (c) The following apply to taxable years beginning after December
19 31, 2018, for purposes of the add back of any deduction allowed on the
20 taxpayer's federal income tax return for wagering taxes, as provided in
21 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
22 the taxpayer is a corporation:
23 (1) For taxable years beginning after December 31, 2018, and
24 before January 1, 2020, a taxpayer is required to add back under
25 this section eighty-seven and five-tenths percent (87.5%) of any
26 deduction allowed on the taxpayer's federal income tax return for
27 wagering taxes.
28 (2) For taxable years beginning after December 31, 2019, and
29 before January 1, 2021, a taxpayer is required to add back under
30 this section seventy-five percent (75%) of any deduction allowed
31 on the taxpayer's federal income tax return for wagering taxes.
32 (3) For taxable years beginning after December 31, 2020, and
33 before January 1, 2022, a taxpayer is required to add back under
34 this section sixty-two and five-tenths percent (62.5%) of any
35 deduction allowed on the taxpayer's federal income tax return for
36 wagering taxes.
37 (4) For taxable years beginning after December 31, 2021, and
38 before January 1, 2023, a taxpayer is required to add back under
39 this section fifty percent (50%) of any deduction allowed on the
40 taxpayer's federal income tax return for wagering taxes.
41 (5) For taxable years beginning after December 31, 2022, and
42 before January 1, 2024, a taxpayer is required to add back under
2025 IN 1636—LS 7432/DI 143 14
1 this section thirty-seven and five-tenths percent (37.5%) of any
2 deduction allowed on the taxpayer's federal income tax return for
3 wagering taxes.
4 (6) For taxable years beginning after December 31, 2023, and
5 before January 1, 2025, a taxpayer is required to add back under
6 this section twenty-five percent (25%) of any deduction allowed
7 on the taxpayer's federal income tax return for wagering taxes.
8 (7) For taxable years beginning after December 31, 2024, and
9 before January 1, 2026, a taxpayer is required to add back under
10 this section twelve and five-tenths percent (12.5%) of any
11 deduction allowed on the taxpayer's federal income tax return for
12 wagering taxes.
13 (8) For taxable years beginning after December 31, 2025, a
14 taxpayer is not required to add back under this section any amount
15 of a deduction allowed on the taxpayer's federal income tax return
16 for wagering taxes.
17 (d) In the case of life insurance companies (as defined in Section
18 816(a) of the Internal Revenue Code) that are organized under Indiana
19 law, the same as "life insurance company taxable income" (as defined
20 in Section 801 of the Internal Revenue Code), adjusted as follows:
21 (1) Subtract income that is exempt from taxation under this article
22 by the Constitution and statutes of the United States.
23 (2) Add an amount equal to any deduction allowed or allowable
24 under Section 170 of the Internal Revenue Code (concerning
25 charitable contributions).
26 (3) Add an amount equal to a deduction allowed or allowable
27 under Section 805 or Section 832(c) of the Internal Revenue Code
28 for taxes based on or measured by income and levied at the state
29 level by any state.
30 (4) Subtract an amount equal to the amount included in the
31 company's taxable income under Section 78 of the Internal
32 Revenue Code (concerning foreign tax credits).
33 (5) Add or subtract the amount necessary to make the adjusted
34 gross income of any taxpayer that owns property for which bonus
35 depreciation was allowed in the current taxable year or in an
36 earlier taxable year equal to the amount of adjusted gross income
37 that would have been computed had an election not been made
38 under Section 168(k) of the Internal Revenue Code to apply bonus
39 depreciation to the property in the year that it was placed in
40 service.
41 (6) Add an amount equal to any deduction allowed under Section
42 172 of the Internal Revenue Code (concerning net operating
2025 IN 1636—LS 7432/DI 143 15
1 losses).
2 (7) Add or subtract the amount necessary to make the adjusted
3 gross income of any taxpayer that placed Section 179 property (as
4 defined in Section 179 of the Internal Revenue Code) in service
5 in the current taxable year or in an earlier taxable year equal to
6 the amount of adjusted gross income that would have been
7 computed had an election for federal income tax purposes not
8 been made for the year in which the property was placed in
9 service to take deductions under Section 179 of the Internal
10 Revenue Code in a total amount exceeding the sum of:
11 (A) twenty-five thousand dollars ($25,000) to the extent
12 deductions under Section 179 of the Internal Revenue Code
13 were not elected as provided in clause (B); and
14 (B) for taxable years beginning after December 31, 2017, the
15 deductions elected under Section 179 of the Internal Revenue
16 Code on property acquired in an exchange if:
17 (i) the exchange would have been eligible for
18 nonrecognition of gain or loss under Section 1031 of the
19 Internal Revenue Code in effect on January 1, 2017;
20 (ii) the exchange is not eligible for nonrecognition of gain or
21 loss under Section 1031 of the Internal Revenue Code; and
22 (iii) the taxpayer made an election to take deductions under
23 Section 179 of the Internal Revenue Code with regard to the
24 acquired property in the year that the property was placed
25 into service.
26 The amount of deductions allowable for an item of property
27 under this clause may not exceed the amount of adjusted gross
28 income realized on the property that would have been deferred
29 under the Internal Revenue Code in effect on January 1, 2017.
30 (8) Subtract income that is:
31 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
32 derived from patents); and
33 (B) included in the insurance company's taxable income under
34 the Internal Revenue Code.
35 (9) Add an amount equal to any income not included in gross
36 income as a result of the deferral of income arising from business
37 indebtedness discharged in connection with the reacquisition after
38 December 31, 2008, and before January 1, 2011, of an applicable
39 debt instrument, as provided in Section 108(i) of the Internal
40 Revenue Code. Subtract from the adjusted gross income of any
41 taxpayer that added an amount to adjusted gross income in a
42 previous year the amount necessary to offset the amount included
2025 IN 1636—LS 7432/DI 143 16
1 in federal gross income as a result of the deferral of income
2 arising from business indebtedness discharged in connection with
3 the reacquisition after December 31, 2008, and before January 1,
4 2011, of an applicable debt instrument, as provided in Section
5 108(i) of the Internal Revenue Code.
6 (10) Add an amount equal to any exempt insurance income under
7 Section 953(e) of the Internal Revenue Code that is active
8 financing income under Subpart F of Subtitle A, Chapter 1,
9 Subchapter N of the Internal Revenue Code.
10 (11) Add the amount excluded from federal gross income under
11 Section 103 of the Internal Revenue Code for interest received on
12 an obligation of a state other than Indiana, or a political
13 subdivision of such a state, that is acquired by the taxpayer after
14 December 31, 2011. For purposes of this subdivision:
15 (A) if the taxpayer receives interest from a pass through entity,
16 a regulated investment company, a hedge fund, or similar
17 arrangement, the taxpayer will be considered to have acquired
18 the obligation on the date the entity acquired the obligation;
19 (B) if ownership of the obligation occurs by means other than
20 a purchase, the date of acquisition of the obligation shall be
21 the date ownership of the obligation was transferred, except to
22 the extent provided in clause (A), and if a portion of the
23 obligation is acquired on multiple dates, the date of acquisition
24 shall be considered separately for each portion of the
25 obligation; and
26 (C) if ownership of the obligation occurred as the result of a
27 refinancing of another obligation, the acquisition date shall be
28 the date on which the obligation was refinanced.
29 (12) For taxable years beginning after December 25, 2016, add:
30 (A) an amount equal to the amount reported by the taxpayer on
31 IRC 965 Transition Tax Statement, line 1; or
32 (B) if the taxpayer deducted an amount under Section 965(c)
33 of the Internal Revenue Code in determining the taxpayer's
34 taxable income for purposes of the federal income tax, the
35 amount deducted under Section 965(c) of the Internal Revenue
36 Code.
37 (13) Add an amount equal to the deduction that was claimed by
38 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
39 Internal Revenue Code (attributable to global intangible
40 low-taxed income). The taxpayer shall separately specify the
41 amount of the reduction under Section 250(a)(1)(B)(i) of the
42 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
2025 IN 1636—LS 7432/DI 143 17
1 Internal Revenue Code.
2 (14) Subtract any interest expense paid or accrued in the current
3 taxable year but not deducted as a result of the limitation imposed
4 under Section 163(j)(1) of the Internal Revenue Code. Add any
5 interest expense paid or accrued in a previous taxable year but
6 allowed as a deduction under Section 163 of the Internal Revenue
7 Code in the current taxable year. For purposes of this subdivision,
8 an interest expense is considered paid or accrued only in the first
9 taxable year the deduction would have been allowable under
10 Section 163 of the Internal Revenue Code if the limitation under
11 Section 163(j)(1) of the Internal Revenue Code did not exist.
12 (15) Subtract the amount that would have been excluded from
13 gross income but for the enactment of Section 118(b)(2) of the
14 Internal Revenue Code for taxable years ending after December
15 22, 2017.
16 (16) Add an amount equal to the remainder of:
17 (A) the amount allowable as a deduction under Section 274(n)
18 of the Internal Revenue Code; minus
19 (B) the amount otherwise allowable as a deduction under
20 Section 274(n) of the Internal Revenue Code, if Section
21 274(n)(2)(D) of the Internal Revenue Code was not in effect
22 for amounts paid or incurred after December 31, 2020.
23 (17) For taxable years ending after March 12, 2020, subtract an
24 amount equal to the deduction disallowed pursuant to:
25 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
26 as modified by Sections 206 and 207 of the Taxpayer Certainty
27 and Disaster Relief Tax Act (Division EE of Public Law
28 116-260); and
29 (B) Section 3134(e) of the Internal Revenue Code.
30 (18) 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 (19) 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 (20) Add or subtract any other amounts the taxpayer is:
37 (A) required to add or subtract; or
38 (B) entitled to deduct;
39 under IC 6-3-2.
40 (e) In the case of insurance companies subject to tax under Section
41 831 of the Internal Revenue Code and organized under Indiana law, the
42 same as "taxable income" (as defined in Section 832 of the Internal
2025 IN 1636—LS 7432/DI 143 18
1 Revenue Code), adjusted as follows:
2 (1) Subtract income that is exempt from taxation under this article
3 by the Constitution and statutes of the United States.
4 (2) Add an amount equal to any deduction allowed or allowable
5 under Section 170 of the Internal Revenue Code (concerning
6 charitable contributions).
7 (3) Add an amount equal to a deduction allowed or allowable
8 under Section 805 or Section 832(c) of the Internal Revenue Code
9 for taxes based on or measured by income and levied at the state
10 level by any state.
11 (4) Subtract an amount equal to the amount included in the
12 company's taxable income under Section 78 of the Internal
13 Revenue Code (concerning foreign tax credits).
14 (5) Add or subtract the amount necessary to make the adjusted
15 gross income of any taxpayer that owns property for which bonus
16 depreciation was allowed in the current taxable year or in an
17 earlier taxable year equal to the amount of adjusted gross income
18 that would have been computed had an election not been made
19 under Section 168(k) of the Internal Revenue Code to apply bonus
20 depreciation to the property in the year that it was placed in
21 service.
22 (6) Add an amount equal to any deduction allowed under Section
23 172 of the Internal Revenue Code (concerning net operating
24 losses).
25 (7) Add or subtract the amount necessary to make the adjusted
26 gross income of any taxpayer that placed Section 179 property (as
27 defined in Section 179 of the Internal Revenue Code) in service
28 in the current taxable year or in an earlier taxable year equal to
29 the amount of adjusted gross income that would have been
30 computed had an election for federal income tax purposes not
31 been made for the year in which the property was placed in
32 service to take deductions under Section 179 of the Internal
33 Revenue Code in a total amount exceeding the sum of:
34 (A) twenty-five thousand dollars ($25,000) to the extent
35 deductions under Section 179 of the Internal Revenue Code
36 were not elected as provided in clause (B); and
37 (B) for taxable years beginning after December 31, 2017, the
38 deductions elected under Section 179 of the Internal Revenue
39 Code on property acquired in an exchange if:
40 (i) the exchange would have been eligible for
41 nonrecognition of gain or loss under Section 1031 of the
42 Internal Revenue Code in effect on January 1, 2017;
2025 IN 1636—LS 7432/DI 143 19
1 (ii) the exchange is not eligible for nonrecognition of gain or
2 loss under Section 1031 of the Internal Revenue Code; and
3 (iii) the taxpayer made an election to take deductions under
4 Section 179 of the Internal Revenue Code with regard to the
5 acquired property in the year that the property was placed
6 into service.
7 The amount of deductions allowable for an item of property
8 under this clause may not exceed the amount of adjusted gross
9 income realized on the property that would have been deferred
10 under the Internal Revenue Code in effect on January 1, 2017.
11 (8) 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 insurance company's taxable income under
15 the Internal Revenue Code.
16 (9) 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 from the adjusted gross income of any
22 taxpayer that added an amount to adjusted gross income in a
23 previous year the amount necessary to offset the amount included
24 in federal gross income as a result of the deferral of income
25 arising from business indebtedness discharged in connection with
26 the 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 (10) Add an amount equal to any exempt insurance income under
30 Section 953(e) of the Internal Revenue Code that is active
31 financing income under Subpart F of Subtitle A, Chapter 1,
32 Subchapter N of the Internal Revenue Code.
33 (11) Add the amount excluded from federal gross income under
34 Section 103 of the Internal Revenue Code for interest received on
35 an obligation of a state other than Indiana, or a political
36 subdivision of such a state, that is acquired by the taxpayer after
37 December 31, 2011. For purposes of this subdivision:
38 (A) if the taxpayer receives interest from a pass through entity,
39 a regulated investment company, a hedge fund, or similar
40 arrangement, the taxpayer will be considered to have acquired
41 the obligation on the date the entity acquired the obligation;
42 (B) if ownership of the obligation occurs by means other than
2025 IN 1636—LS 7432/DI 143 20
1 a purchase, the date of acquisition of the obligation shall be
2 the date ownership of the obligation was transferred, except to
3 the extent provided in clause (A), and if a portion of the
4 obligation is acquired on multiple dates, the date of acquisition
5 shall be considered separately for each portion of the
6 obligation; and
7 (C) if ownership of the obligation occurred as the result of a
8 refinancing of another obligation, the acquisition date shall be
9 the date on which the obligation was refinanced.
10 (12) For taxable years beginning after December 25, 2016, add:
11 (A) an amount equal to the amount reported by the taxpayer on
12 IRC 965 Transition Tax Statement, line 1; or
13 (B) if the taxpayer deducted an amount under Section 965(c)
14 of the Internal Revenue Code in determining the taxpayer's
15 taxable income for purposes of the federal income tax, the
16 amount deducted under Section 965(c) of the Internal Revenue
17 Code.
18 (13) Add an amount equal to the deduction that was claimed by
19 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
20 Internal Revenue Code (attributable to global intangible
21 low-taxed income). The taxpayer shall separately specify the
22 amount of the reduction under Section 250(a)(1)(B)(i) of the
23 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
24 Internal Revenue Code.
25 (14) Subtract any interest expense paid or accrued in the current
26 taxable year but not deducted as a result of the limitation imposed
27 under Section 163(j)(1) of the Internal Revenue Code. Add any
28 interest expense paid or accrued in a previous taxable year but
29 allowed as a deduction under Section 163 of the Internal Revenue
30 Code in the current taxable year. For purposes of this subdivision,
31 an interest expense is considered paid or accrued only in the first
32 taxable year the deduction would have been allowable under
33 Section 163 of the Internal Revenue Code if the limitation under
34 Section 163(j)(1) of the Internal Revenue Code did not exist.
35 (15) Subtract the amount that would have been excluded from
36 gross income but for the enactment of Section 118(b)(2) of the
37 Internal Revenue Code for taxable years ending after December
38 22, 2017.
39 (16) Add an amount equal to the remainder of:
40 (A) the amount allowable as a deduction under Section 274(n)
41 of the Internal Revenue Code; minus
42 (B) the amount otherwise allowable as a deduction under
2025 IN 1636—LS 7432/DI 143 21
1 Section 274(n) of the Internal Revenue Code, if Section
2 274(n)(2)(D) of the Internal Revenue Code was not in effect
3 for amounts paid or incurred after December 31, 2020.
4 (17) For taxable years ending after March 12, 2020, subtract an
5 amount equal to the deduction disallowed pursuant to:
6 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
7 as modified by Sections 206 and 207 of the Taxpayer Certainty
8 and Disaster Relief Tax Act (Division EE of Public Law
9 116-260); and
10 (B) Section 3134(e) of the Internal Revenue Code.
11 (18) For taxable years beginning after December 31, 2022,
12 subtract an amount equal to the deduction disallowed under
13 Section 280C(h) of the Internal Revenue Code.
14 (19) For taxable years beginning after December 31, 2021, add or
15 subtract amounts related to specified research or experimental
16 procedures as required under IC 6-3-2-29.
17 (20) Add or subtract any other amounts the taxpayer is:
18 (A) required to add or subtract; or
19 (B) entitled to deduct;
20 under IC 6-3-2.
21 (f) In the case of trusts and estates, "taxable income" (as defined for
22 trusts and estates in Section 641(b) of the Internal Revenue Code)
23 adjusted as follows:
24 (1) Subtract income that is exempt from taxation under this article
25 by the Constitution and statutes of the United States.
26 (2) Subtract an amount equal to the amount of a September 11
27 terrorist attack settlement payment included in the federal
28 adjusted gross income of the estate of a victim of the September
29 11 terrorist attack or a trust to the extent the trust benefits a victim
30 of the September 11 terrorist attack.
31 (3) 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 (4) Add an amount equal to any deduction allowed under Section
40 172 of the Internal Revenue Code (concerning net operating
41 losses).
42 (5) Add or subtract the amount necessary to make the adjusted
2025 IN 1636—LS 7432/DI 143 22
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 (6) 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 taxpayer's taxable income under the
32 Internal Revenue Code.
33 (7) 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 1636—LS 7432/DI 143 23
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 (8) Add the amount excluded from federal gross income under
5 Section 103 of the Internal Revenue Code for interest received on
6 an obligation of a state other than Indiana, or a political
7 subdivision of such a state, that is acquired by the taxpayer after
8 December 31, 2011. For purposes of this subdivision:
9 (A) if the taxpayer receives interest from a pass through entity,
10 a regulated investment company, a hedge fund, or similar
11 arrangement, the taxpayer will be considered to have acquired
12 the obligation on the date the entity acquired the obligation;
13 (B) if ownership of the obligation occurs by means other than
14 a purchase, the date of acquisition of the obligation shall be
15 the date ownership of the obligation was transferred, except to
16 the extent provided in clause (A), and if a portion of the
17 obligation is acquired on multiple dates, the date of acquisition
18 shall be considered separately for each portion of the
19 obligation; and
20 (C) if ownership of the obligation occurred as the result of a
21 refinancing of another obligation, the acquisition date shall be
22 the date on which the obligation was refinanced.
23 (9) For taxable years beginning after December 25, 2016, add an
24 amount equal to:
25 (A) the amount reported by the taxpayer on IRC 965
26 Transition Tax Statement, line 1;
27 (B) if the taxpayer deducted an amount under Section 965(c)
28 of the Internal Revenue Code in determining the taxpayer's
29 taxable income for purposes of the federal income tax, the
30 amount deducted under Section 965(c) of the Internal Revenue
31 Code; and
32 (C) with regard to any amounts of income under Section 965
33 of the Internal Revenue Code distributed by the taxpayer, the
34 deduction under Section 965(c) of the Internal Revenue Code
35 attributable to such distributed amounts and not reported to the
36 beneficiary.
37 For purposes of this article, the amount required to be added back
38 under clause (B) is not considered to be distributed or
39 distributable to a beneficiary of the estate or trust for purposes of
40 Sections 651 and 661 of the Internal Revenue Code.
41 (10) Subtract any interest expense paid or accrued in the current
42 taxable year but not deducted as a result of the limitation imposed
2025 IN 1636—LS 7432/DI 143 24
1 under Section 163(j)(1) of the Internal Revenue Code. Add any
2 interest expense paid or accrued in a previous taxable year but
3 allowed as a deduction under Section 163 of the Internal Revenue
4 Code in the current taxable year. For purposes of this subdivision,
5 an interest expense is considered paid or accrued only in the first
6 taxable year the deduction would have been allowable under
7 Section 163 of the Internal Revenue Code if the limitation under
8 Section 163(j)(1) of the Internal Revenue Code did not exist.
9 (11) Add an amount equal to the deduction for qualified business
10 income that was claimed by the taxpayer for the taxable year
11 under Section 199A of the Internal Revenue Code.
12 (12) Subtract the amount that would have been excluded from
13 gross income but for the enactment of Section 118(b)(2) of the
14 Internal Revenue Code for taxable years ending after December
15 22, 2017.
16 (13) Add an amount equal to the remainder of:
17 (A) the amount allowable as a deduction under Section 274(n)
18 of the Internal Revenue Code; minus
19 (B) the amount otherwise allowable as a deduction under
20 Section 274(n) of the Internal Revenue Code, if Section
21 274(n)(2)(D) of the Internal Revenue Code was not in effect
22 for amounts paid or incurred after December 31, 2020.
23 (14) For taxable years beginning after December 31, 2017, and
24 before January 1, 2021, add an amount equal to the excess
25 business loss of the taxpayer as defined in Section 461(l)(3) of the
26 Internal Revenue Code. In addition:
27 (A) If a taxpayer has an excess business loss under this
28 subdivision and also has modifications under subdivisions (3)
29 and (5) for property placed in service during the taxable year,
30 the taxpayer shall treat a portion of the taxable year
31 modifications for that property as occurring in the taxable year
32 the property is placed in service and a portion of the
33 modifications as occurring in the immediately following
34 taxable year.
35 (B) The portion of the modifications under subdivisions (3)
36 and (5) for property placed in service during the taxable year
37 treated as occurring in the taxable year in which the property
38 is placed in service equals:
39 (i) the modification for the property otherwise determined
40 under this section; minus
41 (ii) the excess business loss disallowed under this
42 subdivision;
2025 IN 1636—LS 7432/DI 143 25
1 but not less than zero (0).
2 (C) The portion of the modifications under subdivisions (3)
3 and (5) for property placed in service during the taxable year
4 treated as occurring in the taxable year immediately following
5 the taxable year in which the property is placed in service
6 equals the modification for the property otherwise determined
7 under this section minus the amount in clause (B).
8 (D) Any reallocation of modifications between taxable years
9 under clauses (B) and (C) shall be first allocated to the
10 modification under subdivision (3), then to the modification
11 under subdivision (5).
12 (15) For taxable years ending after March 12, 2020, subtract an
13 amount equal to the deduction disallowed pursuant to:
14 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
15 as modified by Sections 206 and 207 of the Taxpayer Certainty
16 and Disaster Relief Tax Act (Division EE of Public Law
17 116-260); and
18 (B) Section 3134(e) of the Internal Revenue Code.
19 (16) For taxable years beginning after December 31, 2022,
20 subtract an amount equal to the deduction disallowed under
21 Section 280C(h) of the Internal Revenue Code.
22 (17) Except as provided in subsection (c), for taxable years
23 beginning after December 31, 2022, add an amount equal to any
24 deduction or deductions allowed or allowable in determining
25 taxable income under Section 641(b) of the Internal Revenue
26 Code for taxes based on or measured by income and levied at the
27 state level by any state of the United States.
28 (18) For taxable years beginning after December 31, 2021, add or
29 subtract amounts related to specified research or experimental
30 procedures as required under IC 6-3-2-29.
31 (19) Add or subtract any other amounts the taxpayer is:
32 (A) required to add or subtract; or
33 (B) entitled to deduct;
34 under IC 6-3-2.
35 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
36 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
37 "adjusted gross income" of a pass through entity means the items of
38 ordinary income and loss in the case of a partnership or a corporation
39 described in IC 6-3-2-2.8(2), or distributions subject to tax for state and
40 federal income tax for beneficiaries in the case of a trust or estate,
41 whichever is applicable, for the taxable year modified as follows:
42 (1) Add the separately stated items of income and gains, or the
2025 IN 1636—LS 7432/DI 143 26
1 equivalent items that must be considered separately by a
2 beneficiary, as determined for federal purposes, attributed to the
3 partners, shareholders, or beneficiaries of the pass through entity,
4 determined without regard to whether the owner is permitted to
5 exclude all or part of the income or gain or deduct any amount
6 against the income or gain.
7 (2) Subtract the separately stated items of deductions or losses or
8 items that must be considered separately by beneficiaries, as
9 determined for federal purposes, attributed to partners,
10 shareholders, or beneficiaries of the pass through entity and that
11 are deductible by an individual in determining adjusted gross
12 income as defined under Section 62 of the Internal Revenue
13 Code:
14 (A) limited as if the partners, shareholders, and beneficiaries
15 deducted the maximum allowable loss or deduction allowable
16 for the taxable year prior to any amount deductible from the
17 pass through entity; but
18 (B) not considering any disallowance of deductions resulting
19 from federal basis limitations for the partner, shareholder, or
20 beneficiary.
21 (3) Add or subtract any modifications to adjusted gross income
22 that would be required both for individuals under subsection (a)
23 and corporations under subsection (b) to the extent otherwise
24 provided in those subsections, including amounts that are
25 allowable for which such modifications are necessary to account
26 for separately stated items in subdivision (1) or (2).
27 (h) Subsections (a)(36), (b)(22), (d)(20), (e)(20), or (f)(19) may not
28 be construed to require an add back or allow a deduction or exemption
29 more than once for a particular add back, deduction, or exemption.
30 (i) For taxable years beginning after December 25, 2016, if:
31 (1) a taxpayer is a shareholder, either directly or indirectly, in a
32 corporation that is an E&P deficit foreign corporation as defined
33 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
34 earnings and profit deficit, or a portion of the earnings and profit
35 deficit, of the E&P deficit foreign corporation is permitted to
36 reduce the federal adjusted gross income or federal taxable
37 income of the taxpayer, the deficit, or the portion of the deficit,
38 shall also reduce the amount taxable under this section to the
39 extent permitted under the Internal Revenue Code, however, in no
40 case shall this permit a reduction in the amount taxable under
41 Section 965 of the Internal Revenue Code for purposes of this
42 section to be less than zero (0); and
2025 IN 1636—LS 7432/DI 143 27
1 (2) the Internal Revenue Service issues guidance that such an
2 income or deduction is not reported directly on a federal tax
3 return or is to be reported in a manner different than specified in
4 this section, this section shall be construed as if federal adjusted
5 gross income or federal taxable income included the income or
6 deduction.
7 (j) If a partner is required to include an item of income, a deduction,
8 or another tax attribute in the partner's adjusted gross income tax return
9 pursuant to IC 6-3-4.5, such item shall be considered to be includible
10 in the partner's federal adjusted gross income or federal taxable
11 income, regardless of whether such item is actually required to be
12 reported by the partner for federal income tax purposes. For purposes
13 of this subsection:
14 (1) items for which a valid election is made under IC 6-3-4.5-6,
15 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
16 in the partner's adjusted gross income or taxable income; and
17 (2) items for which the partnership did not make an election under
18 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
19 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
20 shall be included in the partner's adjusted gross income or taxable
21 income.
22 (k) The following apply for purposes of this section:
23 (1) For purposes of subsections (b) and (f), if a taxpayer is an
24 organization that has more than one (1) trade or business subject
25 to the provisions of Section 512(a)(6) of the Internal Revenue
26 Code, the following rules apply for taxable years beginning after
27 December 31, 2017:
28 (A) If a trade or business has federal unrelated business
29 taxable income of zero (0) or greater for a taxable year, the
30 unrelated business taxable income and modifications required
31 under this section shall be combined in determining the
32 adjusted gross income of the taxpayer and shall not be treated
33 as being subject to the provisions of Section 512(a)(6) of the
34 Internal Revenue Code if one (1) or more trades or businesses
35 have negative Indiana adjusted gross income after
36 adjustments.
37 (B) If a trade or business has federal unrelated business
38 taxable income of less than zero (0) for a taxable year, the
39 taxpayer shall apply the modifications under this section for
40 the taxable year against the net operating loss in the manner
41 required under IC 6-3-2-2.5 and IC 6-3-2-2.6 for separately
42 stated net operating losses. However, if the application of
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1 modifications required under IC 6-3-2-2.5 or IC 6-3-2-2.6
2 results in the separately stated net operating loss for the trade
3 or business being zero (0), the modifications that increase
4 adjusted gross income under this section and remain after the
5 calculations to adjust the separately stated net operating loss
6 to zero (0) that result from the trade or business must be
7 treated as modifications to which clause (A) applies for the
8 taxable year.
9 (C) If a trade or business otherwise described in Section
10 512(a)(6) of the Internal Revenue Code incurred a net
11 operating loss for a taxable year beginning after December 31,
12 2017, and before January 1, 2021, and the net operating loss
13 was carried back for federal tax purposes:
14 (i) if the loss was carried back to a taxable year for which
15 the requirements under Section 512(a)(6) of the Internal
16 Revenue Code did not apply, the portion of the loss and
17 modifications attributable to the loss shall be treated as
18 adjusted gross income of the taxpayer for the first taxable
19 year of the taxpayer beginning after December 31, 2022, and
20 shall be treated as part of the adjusted gross income
21 attributable to clause (A), unless, and to the extent, the loss
22 and modifications were applied to adjusted gross income for
23 a previous taxable year, as determined under this article; and
24 (ii) if the loss was carried back to a taxable year for which
25 the requirements under Section 512(a)(6) of the Internal
26 Revenue Code applied, the portion of the loss and
27 modifications attributable to the loss shall be treated as
28 adjusted gross income of the taxpayer for the first taxable
29 year of the taxpayer beginning after December 31, 2022, and
30 for purposes of this clause, the inclusion of losses and
31 modifications shall be in the same manner as provided in
32 clause (B), unless, and to the extent, the loss and
33 modifications were applied to adjusted gross income for a
34 previous taxable year, as determined under this article.
35 (D) Notwithstanding any provision in this subdivision, if a
36 taxpayer computed its adjusted gross income for a taxable year
37 beginning before January 1, 2023, based on a reasonable
38 interpretation of this article, the taxpayer shall be permitted to
39 compute its adjusted gross income for those taxable years
40 based on that interpretation. However, a taxpayer must
41 continue to report any tax attributes for taxable years
42 beginning after December 31, 2022, in a manner consistent
2025 IN 1636—LS 7432/DI 143 29
1 with its previous interpretation.
2 (2) In the case of a corporation, other than a captive real estate
3 investment trust, for which the adjusted gross income under this
4 article is determined after a deduction for dividends paid under
5 the Internal Revenue Code, the modifications required under this
6 section shall be applied in ratio to the corporation's taxable
7 income (as defined in Section 63 of the Internal Revenue Code)
8 after deductions for dividends paid under the Internal Revenue
9 Code compared to the corporation's taxable income (as defined in
10 Section 63 of the Internal Revenue Code) before the deduction for
11 dividends paid under the Internal Revenue Code.
12 (3) In the case of a trust or estate, the trust or estate is required to
13 include only the portion of the modifications not passed through
14 to beneficiaries.
15 (4) In the case of a taxpayer for which modifications are required
16 to be applied against a separately stated net operating loss under
17 IC 6-3-2-2.5 or IC 6-3-2-2.6, the modifications required under this
18 section must be adjusted to reflect the required application of the
19 modifications against a separately stated net operating loss, in
20 order to avoid the application of a particular modification
21 multiple times.
22 SECTION 2. IC 20-43-2-3, AS AMENDED BY P.L.201-2023,
23 SECTION 199, IS AMENDED TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2025]: Sec. 3. In determining the total amount
25 to be distributed for purposes of section 2 of this chapter, distributions:
26 (1) as basic tuition support;
27 (2) for academic performance grants;
28 (3) for special education grants;
29 (4) for career and technical education grants;
30 (5) for choice scholarships;
31 (6) for dynamic choice scholarships elected under
32 IC 20-51-4-7(c)(2);
33 (6) (7) for Mitch Daniels early graduation scholarships; and
34 (7) (8) for non-English speaking program grants under
35 IC 20-43-10-4;
36 are to be considered for a particular state fiscal year.
37 SECTION 3. IC 20-51-1-4.1 IS ADDED TO THE INDIANA CODE
38 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
39 1, 2025]: Sec. 4.1. "Dynamic choice scholarship" refers to a
40 scholarship:
41 (1) described in IC 20-51-4-13;
42 (2) that an eligible student elects to utilize under
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1 IC 20-51-4-7(c)(2); and
2 (3) that an eligible student uses to pay for dynamic education
3 costs.
4 SECTION 4. IC 20-51-1-4.2 IS ADDED TO THE INDIANA CODE
5 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
6 1, 2025]: Sec. 4.2. "Dynamic education costs" refers to the
7 following:
8 (1) Tuition, fees, and textbooks required for in-person or
9 virtual instruction.
10 (2) Ongoing services provided by a public school district or
11 one (1) or more public or private education service providers,
12 including individual classes and extracurricular activities and
13 programs.
14 (3) Tutoring, therapies, or educational services from one (1)
15 or more providers.
16 (4) Transportation costs associated with student travel for
17 educational purposes.
18 (5) Expenses incurred in the education of the student that are
19 approved by the department.
20 (6) Contributions to a 529 savings plan established under
21 IC 21-9.
22 (7) Tuition and fees that would otherwise be charged by a
23 school to an eligible student or the parent of an eligible
24 student.
25 SECTION 5. IC 20-51-1-4.3, AS AMENDED BY P.L.201-2023,
26 SECTION 215, IS AMENDED TO READ AS FOLLOWS
27 [EFFECTIVE JULY 1, 2025]: Sec. 4.3. "Eligible choice scholarship
28 student" refers to an individual who:
29 (1) has legal settlement in Indiana; and
30 (2) is at least five (5) years of age and less than twenty-two (22)
31 years of age on October 1 of the applicable school year. and
32 (3) is a member of a household with an annual income of not
33 more than four hundred percent (400%) of the amount required
34 for the individual to qualify for the federal free or reduced price
35 lunch program.
36 SECTION 6. IC 20-51-4-2, AS AMENDED BY P.L.165-2021,
37 SECTION 174, IS AMENDED TO READ AS FOLLOWS
38 [EFFECTIVE JULY 1, 2025]: Sec. 2. (a) Except as provided in
39 subsection (b), an eligible choice scholarship student is entitled to:
40 (1) a choice scholarship under this chapter for each school year
41 that the eligible choice scholarship student enrolls in an eligible
42 school; or
2025 IN 1636—LS 7432/DI 143 31
1 (2) a dynamic choice scholarship, if elected under section
2 7(c)(2) of this chapter, for each school year.
3 (b) An eligible choice scholarship student is not entitled to a choice
4 scholarship under this chapter or a dynamic choice scholarship
5 election under section 7(c)(2) of this chapter for a particular year if
6 the eligible choice scholarship student receives an annual grant amount
7 under IC 20-51.4-4-2 under the Indiana education scholarship account
8 program for the same school year.
9 SECTION 7. IC 20-51-4-4, AS AMENDED BY P.L.165-2021,
10 SECTION 177, IS AMENDED TO READ AS FOLLOWS
11 [EFFECTIVE JULY 1, 2025]: Sec. 4. (a) The amount an eligible choice
12 scholarship student is entitled to receive under this chapter for a school
13 year is equal to the following:
14 (1) The lesser of the following:
15 (A) The sum of the tuition or transfer tuition and fees required
16 for enrollment or attendance of the eligible choice scholarship
17 student at the eligible school selected by the eligible choice
18 scholarship student for a school year that the eligible choice
19 scholarship student (or the parent of the eligible choice
20 scholarship student) would otherwise be obligated to pay to
21 the eligible school.
22 (B) For the state fiscal year beginning July 1, 2021, and each
23 state fiscal year thereafter, an amount equal to ninety percent
24 (90%) of the state tuition support amount determined under
25 section 5 of this chapter.
26 (2) In addition to the amount described in subdivision (1), if the
27 eligible choice scholarship student has been identified as eligible
28 for special education services under IC 20-35 and the eligible
29 school provides the necessary special education or related
30 services to the eligible choice scholarship student, any amount
31 that a school corporation would receive under IC 20-43-7 for the
32 eligible choice scholarship student if the eligible choice
33 scholarship student attended the school corporation. However, if
34 an eligible choice scholarship student changes schools during the
35 school year after the December 1 count under IC 20-43-7-1 of
36 eligible pupils enrolled in special education programs and the
37 eligible choice scholarship student enrolls in a different eligible
38 school, any choice scholarship amounts paid to the eligible choice
39 scholarship student for the remainder of the school year after the
40 eligible choice scholarship student enrolls in the different eligible
41 school shall not include amounts that a school corporation would
42 receive under IC 20-43-7 for the eligible choice scholarship
2025 IN 1636—LS 7432/DI 143 32
1 student if the eligible choice scholarship student attended the
2 school corporation.
3 (b) The amount an eligible choice scholarship student is entitled
4 to receive if the student elects to utilize a dynamic choice
5 scholarship under section 7(c)(2) of this chapter is an amount equal
6 to ninety percent (90%) of the state tuition support amount
7 determined under section 5 of this chapter.
8 (b) (c) The amount an eligible choice scholarship student is entitled
9 to receive under this chapter if the eligible student applies for the
10 choice scholarship under section 7(e) of this chapter, regardless of
11 whether the eligible choice scholarship student elects to receive a
12 dynamic choice scholarship under section 7(c)(2) of this chapter,
13 shall be reduced on a prorated basis in the manner prescribed in section
14 6 of this chapter.
15 SECTION 8. IC 20-51-4-6, AS AMENDED BY P.L.106-2016,
16 SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2025]: Sec. 6. If an eligible choice scholarship student enrolls
18 in an eligible school for less than an entire school year, the choice
19 scholarship or dynamic choice scholarship election provided under
20 this chapter for that school year shall be reduced on a prorated basis to
21 reflect the shorter school term.
22 SECTION 9. IC 20-51-4-7, AS AMENDED BY P.L.93-2024,
23 SECTION 150, IS AMENDED TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2025]: Sec. 7. (a) The department shall
25 administer this chapter.
26 (b) The department shall approve an application for an eligible
27 school within fifteen (15) days after the date the school requests to
28 participate in the choice scholarship program.
29 (c) The department shall:
30 (1) approve an application for a choice scholarship student within
31 fifteen (15) days after the date the student requests to participate
32 in the choice scholarship program; and
33 (2) provide the choice scholarship student with an option to
34 elect to receive either a choice scholarship or a dynamic
35 choice scholarship.
36 (d) Each year, at a minimum, the department shall accept
37 applications from March 1 through September 1 for eligible schools for
38 the upcoming school year.
39 (e) Each year, the department shall accept applications for choice
40 scholarship students from:
41 (1) March 1 through September 1 for the upcoming school year;
42 and
2025 IN 1636—LS 7432/DI 143 33
1 (2) November 1 through January 15 for the spring semester of the
2 current school year.
3 (f) This chapter may not be construed in a manner that would
4 impose additional requirements for approving an application for an
5 eligible school placed in a "null" or "no letter grade" category
6 established under IC 20-31-8-3(b).
7 (g) The department shall adopt rules under IC 4-22-2 to implement
8 this chapter.
9 SECTION 10. IC 20-51-4-8, AS ADDED BY P.L.92-2011,
10 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
11 JULY 1, 2025]: Sec. 8. (a) The department may prescribe forms and
12 methods for demonstrating eligibility for a choice scholarship under
13 this chapter.
14 (b) The department may prescribe forms and methods for the
15 administration and oversight of a dynamic choice scholarship
16 elected under section 7(c)(2) of this chapter.
17 SECTION 11. IC 20-51-4-10, AS AMENDED BY P.L.165-2021,
18 SECTION 179, IS AMENDED TO READ AS FOLLOWS
19 [EFFECTIVE JULY 1, 2025]: Sec. 10. (a) The department shall
20 distribute choice scholarships at least once each semester, or at
21 equivalent intervals. The department may distribute the choice
22 scholarship to the eligible choice scholarship student (or the parent of
23 the eligible choice scholarship student) for the purpose of paying the
24 educational costs described in section 4(a)(1)(A) of this chapter. For
25 the distribution to be valid, the eligible choice scholarship student (or
26 the parent of the eligible choice scholarship student) and the eligible
27 school providing educational services to the eligible choice scholarship
28 student must annually sign a form, prescribed by the department to
29 endorse distributions for the particular school year. If:
30 (1) an eligible choice scholarship student who is receiving a
31 choice scholarship for a school year changes schools during the
32 school year after signing the form to endorse distributions for that
33 school year; and
34 (2) the eligible choice scholarship student enrolls in a different
35 eligible school that has not signed the form to endorse
36 distributions for that school year;
37 the eligible choice scholarship student (or the parent of the eligible
38 choice scholarship student) and the eligible school must sign the form
39 prescribed by the department to endorse distributions for the particular
40 school year.
41 (b) The department shall distribute dynamic choice scholarships
42 elected under section 7(c)(2) of this chapter at least once each
2025 IN 1636—LS 7432/DI 143 34
1 semester, or at equivalent intervals. The department may
2 distribute the dynamic choice scholarship to the eligible choice
3 scholarship student (or the parent of the eligible choice scholarship
4 student) for the purpose of paying dynamic education costs
5 described in IC 20-51-1-4.2. For the distribution to be valid, the
6 eligible choice scholarship student (or the parent of the eligible
7 choice scholarship student) must annually sign a form, prescribed
8 by the department, to endorse distributions for the particular
9 school year.
10 (c) The department may create an account system to
11 accommodate distributions to eligible choice scholarship students
12 who elect to utilize a dynamic choice scholarship under section
13 7(c)(2) of this chapter. The department may audit up to three
14 percent (3%) of dynamic choice scholarship accounts annually to
15 protect against fraud or misuse of funds.
16 SECTION 12. IC 20-51-4-11, AS AMENDED BY P.L.211-2013,
17 SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
18 JULY 1, 2025]: Sec. 11. The amount of a choice scholarship, or a
19 dynamic choice scholarship elected under section 7(c)(2) of this
20 chapter, provided to an eligible choice scholarship student shall not be
21 treated as income or a resource for the purposes of qualifying for any
22 other federal or state grant or program administered by the state or a
23 political subdivision.
24 SECTION 13. IC 20-51-4-13 IS ADDED TO THE INDIANA
25 CODE AS A NEW SECTION TO READ AS FOLLOWS
26 [EFFECTIVE JULY 1, 2025]: Sec. 13. (a) An eligible student who
27 applies for a scholarship under section 7 of this chapter may elect
28 to receive a dynamic choice scholarship under section 7(c)(2) of this
29 chapter.
30 (b) An eligible student who elects to receive a dynamic choice
31 scholarship under subsection (a) may use the scholarship to pay for
32 dynamic education costs.
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