Introduced Version
SENATE BILL No. 357
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3-1-3.5; IC 6-5.5-1-2.
Synopsis: Accelerated depreciation. Couples Indiana depreciation
provisions with federal depreciation provisions under Section 179 of
the Internal Revenue Code (Section 179). Increases the Section 179
threshold from $25,000 to $100,000 for Indiana adjusted gross income
purposes. Makes technical changes.
Effective: January 1, 2025 (retroactive).
Rogers, Baldwin
January 13, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
2025 IN 357—LS 7053/DI 134 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE BILL No. 357
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-3-1-3.5, AS AMENDED BY P.L.9-2024,
2 SECTION 185, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]: Sec. 3.5. When
4 used in this article, the term "adjusted gross income" shall mean the
5 following:
6 (a) In the case of all individuals, "adjusted gross income" (as
7 defined in Section 62 of the Internal Revenue Code), modified as
8 follows:
9 (1) Subtract income that is exempt from taxation under this article
10 by the Constitution and statutes of the United States.
11 (2) Except as provided in subsection (c), add an amount equal to
12 any deduction or deductions allowed or allowable pursuant to
13 Section 62 of the Internal Revenue Code for taxes based on or
14 measured by income and levied at the state level by any state of
15 the United States.
16 (3) Subtract one thousand dollars ($1,000), or in the case of a
17 joint return filed by a husband and wife, subtract for each spouse
2025 IN 357—LS 7053/DI 134 2
1 one thousand dollars ($1,000).
2 (4) Subtract one thousand dollars ($1,000) for:
3 (A) each of the exemptions provided by Section 151(c) of the
4 Internal Revenue Code (as effective January 1, 2017);
5 (B) each additional amount allowable under Section 63(f) of
6 the Internal Revenue Code; and
7 (C) the spouse of the taxpayer if a separate return is made by
8 the taxpayer and if the spouse, for the calendar year in which
9 the taxable year of the taxpayer begins, has no gross income
10 and is not the dependent of another taxpayer.
11 (5) Subtract each of the following:
12 (A) One thousand five hundred dollars ($1,500) for each of the
13 exemptions allowed under Section 151(c)(1)(B) of the Internal
14 Revenue Code (as effective January 1, 2004), except that in
15 the first taxable year in which a particular exemption is
16 allowed under Section 151(c)(1)(B) of the Internal Revenue
17 Code (as effective January 1, 2004), subtract three thousand
18 dollars ($3,000) for that exemption.
19 (B) One thousand five hundred dollars ($1,500) for each
20 exemption allowed under Section 151(c) of the Internal
21 Revenue Code (as effective January 1, 2017) for an individual:
22 (i) who is less than nineteen (19) years of age or is a
23 full-time student who is less than twenty-four (24) years of
24 age;
25 (ii) for whom the taxpayer is the legal guardian; and
26 (iii) for whom the taxpayer does not claim an exemption
27 under clause (A).
28 (C) Five hundred dollars ($500) for each additional amount
29 allowable under Section 63(f)(1) of the Internal Revenue Code
30 if the federal adjusted gross income of the taxpayer, or the
31 taxpayer and the taxpayer's spouse in the case of a joint return,
32 is less than forty thousand dollars ($40,000). In the case of a
33 married individual filing a separate return, the qualifying
34 income amount in this clause is equal to twenty thousand
35 dollars ($20,000).
36 (D) Three thousand dollars ($3,000) for each exemption
37 allowed under Section 151(c) of the Internal Revenue Code (as
38 effective January 1, 2017) for an individual who is:
39 (i) an adopted child of the taxpayer; and
40 (ii) less than nineteen (19) years of age or is a full-time
41 student who is less than twenty-four (24) years of age.
42 This amount is in addition to any amount subtracted under
2025 IN 357—LS 7053/DI 134 3
1 clause (A) or (B).
2 This amount is in addition to the amount subtracted under
3 subdivision (4).
4 (6) Subtract any amounts included in federal adjusted gross
5 income under Section 111 of the Internal Revenue Code as a
6 recovery of items previously deducted as an itemized deduction
7 from adjusted gross income.
8 (7) Subtract any amounts included in federal adjusted gross
9 income under the Internal Revenue Code which amounts were
10 received by the individual as supplemental railroad retirement
11 annuities under 45 U.S.C. 231 and which are not deductible under
12 subdivision (1).
13 (8) Subtract an amount equal to the amount of federal Social
14 Security and Railroad Retirement benefits included in a taxpayer's
15 federal gross income by Section 86 of the Internal Revenue Code.
16 (9) In the case of a nonresident taxpayer or a resident taxpayer
17 residing in Indiana for a period of less than the taxpayer's entire
18 taxable year, the total amount of the deductions allowed pursuant
19 to subdivisions (3), (4), and (5) shall be reduced to an amount
20 which bears the same ratio to the total as the taxpayer's income
21 taxable in Indiana bears to the taxpayer's total income.
22 (10) In the case of an individual who is a recipient of assistance
23 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
24 subtract an amount equal to that portion of the individual's
25 adjusted gross income with respect to which the individual is not
26 allowed under federal law to retain an amount to pay state and
27 local income taxes.
28 (11) In the case of an eligible individual, subtract the amount of
29 a Holocaust victim's settlement payment included in the
30 individual's federal adjusted gross income.
31 (12) Subtract an amount equal to the portion of any premiums
32 paid during the taxable year by the taxpayer for a qualified long
33 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
34 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
35 file a joint income tax return or the taxpayer is otherwise entitled
36 to a deduction under this subdivision for the taxpayer's spouse, or
37 both.
38 (13) Subtract an amount equal to the lesser of:
39 (A) two thousand five hundred dollars ($2,500), or one
40 thousand two hundred fifty dollars ($1,250) in the case of a
41 married individual filing a separate return; or
42 (B) the amount of property taxes that are paid during the
2025 IN 357—LS 7053/DI 134 4
1 taxable year in Indiana by the individual on the individual's
2 principal place of residence.
3 (14) Subtract an amount equal to the amount of a September 11
4 terrorist attack settlement payment included in the individual's
5 federal adjusted gross income.
6 (15) Add or subtract the amount necessary to make the adjusted
7 gross income of any taxpayer that owns property for which bonus
8 depreciation was allowed in the current taxable year or in an
9 earlier taxable year equal to the amount of adjusted gross income
10 that would have been computed had an election not been made
11 under Section 168(k) of the Internal Revenue Code to apply bonus
12 depreciation not applied to the property in the year that it was
13 placed in service.
14 (16) Add an amount equal to any deduction allowed under
15 Section 172 of the Internal Revenue Code (concerning net
16 operating losses).
17 (17) Add or subtract the amount necessary to make the adjusted
18 gross income of any taxpayer that placed Section 179 property (as
19 defined in Section 179 of the Internal Revenue Code) in service
20 in the current taxable year or in an earlier taxable year a taxable
21 year beginning prior to January 1, 2025, equal to the amount
22 of adjusted gross income that would have been computed had an
23 election for federal income tax purposes not been made for the
24 year in which the property was placed in service to take
25 deductions under Section 179 of the Internal Revenue Code in a
26 total amount exceeding the sum of:
27 (A) twenty-five thousand dollars ($25,000) one hundred
28 thousand dollars ($100,000) to the extent deductions under
29 Section 179 of the Internal Revenue Code were not elected as
30 provided in clause (B); and
31 (B) for taxable years beginning after December 31, 2017, the
32 deductions elected under Section 179 of the Internal Revenue
33 Code on property acquired in an exchange if:
34 (i) the exchange would have been eligible for
35 nonrecognition of gain or loss under Section 1031 of the
36 Internal Revenue Code in effect on January 1, 2017;
37 (ii) the exchange is not eligible for nonrecognition of gain or
38 loss under Section 1031 of the Internal Revenue Code; and
39 (iii) the taxpayer made an election to take deductions under
40 Section 179 of the Internal Revenue Code with regard to the
41 acquired property in the year that the property was placed
42 into service.
2025 IN 357—LS 7053/DI 134 5
1 The amount of deductions allowable for an item of property
2 under this clause may not exceed the amount of adjusted gross
3 income realized on the property that would have been deferred
4 under the Internal Revenue Code in effect on January 1, 2017.
5 (18) Subtract an amount equal to the amount of the taxpayer's
6 qualified military income that was not excluded from the
7 taxpayer's gross income for federal income tax purposes under
8 Section 112 of the Internal Revenue Code.
9 (19) Subtract income that is:
10 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
11 derived from patents); and
12 (B) included in the individual's federal adjusted gross income
13 under the Internal Revenue Code.
14 (20) Add an amount equal to any income not included in gross
15 income as a result of the deferral of income arising from business
16 indebtedness discharged in connection with the reacquisition after
17 December 31, 2008, and before January 1, 2011, of an applicable
18 debt instrument, as provided in Section 108(i) of the Internal
19 Revenue Code. Subtract the amount necessary from the adjusted
20 gross income of any taxpayer that added an amount to adjusted
21 gross income in a previous year to offset the amount included in
22 federal gross income as a result of the deferral of income arising
23 from business indebtedness discharged in connection with the
24 reacquisition after December 31, 2008, and before January 1,
25 2011, of an applicable debt instrument, as provided in Section
26 108(i) of the Internal Revenue Code.
27 (21) Add the amount excluded from federal gross income under
28 Section 103 of the Internal Revenue Code for interest received on
29 an obligation of a state other than Indiana, or a political
30 subdivision of such a state, that is acquired by the taxpayer after
31 December 31, 2011. For purposes of this subdivision:
32 (A) if the taxpayer receives interest from a pass through entity,
33 a regulated investment company, a hedge fund, or similar
34 arrangement, the taxpayer will be considered to have acquired
35 the obligation on the date the entity acquired the obligation;
36 (B) if ownership of the obligation occurs by means other than
37 a purchase, the date of acquisition of the obligation shall be
38 the date ownership of the obligation was transferred, except to
39 the extent provided in clause (A), and if a portion of the
40 obligation is acquired on multiple dates, the date of acquisition
41 shall be considered separately for each portion of the
42 obligation; and
2025 IN 357—LS 7053/DI 134 6
1 (C) if ownership of the obligation occurred as the result of a
2 refinancing of another obligation, the acquisition date shall be
3 the date on which the obligation was refinanced.
4 (22) Subtract an amount as described in Section 1341(a)(2) of the
5 Internal Revenue Code to the extent, if any, that the amount was
6 previously included in the taxpayer's adjusted gross income for a
7 prior taxable year.
8 (23) For taxable years beginning after December 25, 2016, add an
9 amount equal to the deduction for deferred foreign income that
10 was claimed by the taxpayer for the taxable year under Section
11 965(c) of the Internal Revenue Code.
12 (24) Subtract any interest expense paid or accrued in the current
13 taxable year but not deducted as a result of the limitation imposed
14 under Section 163(j)(1) of the Internal Revenue Code. Add any
15 interest expense paid or accrued in a previous taxable year but
16 allowed as a deduction under Section 163 of the Internal Revenue
17 Code in the current taxable year. For purposes of this subdivision,
18 an interest expense is considered paid or accrued only in the first
19 taxable year the deduction would have been allowable under
20 Section 163 of the Internal Revenue Code if the limitation under
21 Section 163(j)(1) of the Internal Revenue Code did not exist.
22 (25) Subtract the amount that would have been excluded from
23 gross income but for the enactment of Section 118(b)(2) of the
24 Internal Revenue Code for taxable years ending after December
25 22, 2017.
26 (26) For taxable years beginning after December 31, 2019, and
27 before January 1, 2021, add an amount of the deduction claimed
28 under Section 62(a)(22) of the Internal Revenue Code.
29 (27) For taxable years beginning after December 31, 2019, for
30 payments made by an employer under an education assistance
31 program after March 27, 2020:
32 (A) add the amount of payments by an employer that are
33 excluded from the taxpayer's federal gross income under
34 Section 127(c)(1)(B) of the Internal Revenue Code; and
35 (B) deduct the interest allowable under Section 221 of the
36 Internal Revenue Code, if the disallowance under Section
37 221(e)(1) of the Internal Revenue Code did not apply to the
38 payments described in clause (A). For purposes of applying
39 Section 221(b) of the Internal Revenue Code to the amount
40 allowable under this clause, the amount under clause (A) shall
41 not be added to adjusted gross income.
42 (28) Add an amount equal to the remainder of:
2025 IN 357—LS 7053/DI 134 7
1 (A) the amount allowable as a deduction under Section 274(n)
2 of the Internal Revenue Code; minus
3 (B) the amount otherwise allowable as a deduction under
4 Section 274(n) of the Internal Revenue Code, if Section
5 274(n)(2)(D) of the Internal Revenue Code was not in effect
6 for amounts paid or incurred after December 31, 2020.
7 (29) For taxable years beginning after December 31, 2017, and
8 before January 1, 2021, add an amount equal to the excess
9 business loss of the taxpayer as defined in Section 461(l)(3) of the
10 Internal Revenue Code. In addition:
11 (A) If a taxpayer has an excess business loss under this
12 subdivision and also has modifications under subdivisions (15)
13 and (17) for property placed in service during the taxable year,
14 the taxpayer shall treat a portion of the taxable year
15 modifications for that property as occurring in the taxable year
16 the property is placed in service and a portion of the
17 modifications as occurring in the immediately following
18 taxable year.
19 (B) The portion of the modifications under subdivisions (15)
20 and (17) for property placed in service during the taxable year
21 treated as occurring in the taxable year in which the property
22 is placed in service equals:
23 (i) the modification for the property otherwise determined
24 under this section; minus
25 (ii) the excess business loss disallowed under this
26 subdivision;
27 but not less than zero (0).
28 (C) The portion of the modifications under subdivisions (15)
29 and (17) for property placed in service during the taxable year
30 treated as occurring in the taxable year immediately following
31 the taxable year in which the property is placed in service
32 equals the modification for the property otherwise determined
33 under this section minus the amount in clause (B).
34 (D) Any reallocation of modifications between taxable years
35 under clauses (B) and (C) shall be first allocated to the
36 modification under subdivision (15), then to the modification
37 under subdivision (17).
38 (30) Add an amount equal to the amount excluded from federal
39 gross income under Section 108(f)(5) of the Internal Revenue
40 Code. For purposes of this subdivision:
41 (A) if an amount excluded under Section 108(f)(5) of the
42 Internal Revenue Code would be excludible under Section
2025 IN 357—LS 7053/DI 134 8
1 108(a)(1)(B) of the Internal Revenue Code, the exclusion
2 under Section 108(a)(1)(B) of the Internal Revenue Code shall
3 take precedence; and
4 (B) if an amount would have been excludible under Section
5 108(f)(5) of the Internal Revenue Code as in effect on January
6 1, 2020, the amount is not required to be added back under this
7 subdivision.
8 (31) For taxable years ending after March 12, 2020, subtract an
9 amount equal to the deduction disallowed pursuant to:
10 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
11 as modified by Sections 206 and 207 of the Taxpayer Certainty
12 and Disaster Relief Tax Act (Division EE of Public Law
13 116-260); and
14 (B) Section 3134(e) of the Internal Revenue Code.
15 (32) Subtract the amount of an ESA annual grant amount and, as
16 applicable, a CSA annual grant amount distributed to a taxpayer's
17 Indiana education scholarship account under IC 20-51.4 that is
18 used for an ESA or CSA qualified expense (as defined in
19 IC 20-51.4-2) or to an Indiana enrichment scholarship account
20 under IC 20-52 that is used for qualified expenses (as defined in
21 IC 20-52-2-6), to the extent the distribution used for the qualified
22 expense is included in the taxpayer's federal adjusted gross
23 income under the Internal Revenue Code.
24 (33) For taxable years beginning after December 31, 2019, and
25 before January 1, 2021, add an amount equal to the amount of
26 unemployment compensation excluded from federal gross income
27 under Section 85(c) of the Internal Revenue Code.
28 (34) For taxable years beginning after December 31, 2022,
29 subtract an amount equal to the deduction disallowed under
30 Section 280C(h) of the Internal Revenue Code.
31 (35) For taxable years beginning after December 31, 2021, add or
32 subtract amounts related to specified research or experimental
33 procedures as required under IC 6-3-2-29.
34 (36) Subtract any other amounts the taxpayer is entitled to deduct
35 under IC 6-3-2.
36 (37) Subtract the amount of a CSA annual grant amount
37 distributed to a taxpayer's career scholarship account under
38 IC 20-51.4-4.5 that is used for a CSA qualified expense (as
39 defined in IC 20-51.4-2-3.8), to the extent the distribution used
40 for the CSA qualified expense is included in the taxpayer's federal
41 adjusted gross income under the Internal Revenue Code.
42 (b) In the case of corporations, the same as "taxable income" (as
2025 IN 357—LS 7053/DI 134 9
1 defined in Section 63 of the Internal Revenue Code) adjusted as
2 follows:
3 (1) Subtract income that is exempt from taxation under this article
4 by the Constitution and statutes of the United States.
5 (2) Add an amount equal to any deduction or deductions allowed
6 or allowable pursuant to Section 170 of the Internal Revenue
7 Code (concerning charitable contributions).
8 (3) Except as provided in subsection (c), add an amount equal to
9 any deduction or deductions allowed or allowable pursuant to
10 Section 63 of the Internal Revenue Code for taxes based on or
11 measured by income and levied at the state level by any state of
12 the United States.
13 (4) Subtract an amount equal to the amount included in the
14 corporation's taxable income under Section 78 of the Internal
15 Revenue Code (concerning foreign tax credits).
16 (5) Add or subtract the amount necessary to make the adjusted
17 gross income of any taxpayer that owns property for which bonus
18 depreciation was allowed in the current taxable year or in an
19 earlier taxable year equal to the amount of adjusted gross income
20 that would have been computed had an election not been made
21 under Section 168(k) of the Internal Revenue Code to apply bonus
22 depreciation not applied to the property in the year that it was
23 placed in service.
24 (6) Add an amount equal to any deduction allowed under Section
25 172 of the Internal Revenue Code (concerning net operating
26 losses).
27 (7) Add or subtract the amount necessary to make the adjusted
28 gross income of any taxpayer that placed Section 179 property (as
29 defined in Section 179 of the Internal Revenue Code) in service
30 in the current taxable year or in an earlier taxable year a taxable
31 year beginning prior to January 1, 2025, equal to the amount
32 of adjusted gross income that would have been computed had an
33 election for federal income tax purposes not been made for the
34 year in which the property was placed in service to take
35 deductions under Section 179 of the Internal Revenue Code in a
36 total amount exceeding the sum of:
37 (A) twenty-five thousand dollars ($25,000) one hundred
38 thousand dollars ($100,000) to the extent deductions under
39 Section 179 of the Internal Revenue Code were not elected as
40 provided in clause (B); and
41 (B) for taxable years beginning after December 31, 2017, the
42 deductions elected under Section 179 of the Internal Revenue
2025 IN 357—LS 7053/DI 134 10
1 Code on property acquired in an exchange if:
2 (i) the exchange would have been eligible for
3 nonrecognition of gain or loss under Section 1031 of the
4 Internal Revenue Code in effect on January 1, 2017;
5 (ii) the exchange is not eligible for nonrecognition of gain or
6 loss under Section 1031 of the Internal Revenue Code; and
7 (iii) the taxpayer made an election to take deductions under
8 Section 179 of the Internal Revenue Code with regard to the
9 acquired property in the year that the property was placed
10 into service.
11 The amount of deductions allowable for an item of property
12 under this clause may not exceed the amount of adjusted gross
13 income realized on the property that would have been deferred
14 under the Internal Revenue Code in effect on January 1, 2017.
15 (8) Add to the extent required by IC 6-3-2-20:
16 (A) the amount of intangible expenses (as defined in
17 IC 6-3-2-20) for the taxable year that reduced the corporation's
18 taxable income (as defined in Section 63 of the Internal
19 Revenue Code) for federal income tax purposes; and
20 (B) any directly related interest expenses (as defined in
21 IC 6-3-2-20) that reduced the corporation's adjusted gross
22 income (determined without regard to this subdivision). For
23 purposes of this clause, any directly related interest expense
24 that constitutes business interest within the meaning of Section
25 163(j) of the Internal Revenue Code shall be considered to
26 have reduced the taxpayer's federal taxable income only in the
27 first taxable year in which the deduction otherwise would have
28 been allowable under Section 163 of the Internal Revenue
29 Code if the limitation under Section 163(j)(1) of the Internal
30 Revenue Code did not exist.
31 (9) Add an amount equal to any deduction for dividends paid (as
32 defined in Section 561 of the Internal Revenue Code) to
33 shareholders of a captive real estate investment trust (as defined
34 in section 34.5 of this chapter).
35 (10) Subtract income that is:
36 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
37 derived from patents); and
38 (B) included in the corporation's taxable income under the
39 Internal Revenue Code.
40 (11) Add an amount equal to any income not included in gross
41 income as a result of the deferral of income arising from business
42 indebtedness discharged in connection with the reacquisition after
2025 IN 357—LS 7053/DI 134 11
1 December 31, 2008, and before January 1, 2011, of an applicable
2 debt instrument, as provided in Section 108(i) of the Internal
3 Revenue Code. Subtract from the adjusted gross income of any
4 taxpayer that added an amount to adjusted gross income in a
5 previous year the amount necessary to offset the amount included
6 in federal gross income as a result of the deferral of income
7 arising from business indebtedness discharged in connection with
8 the reacquisition after December 31, 2008, and before January 1,
9 2011, of an applicable debt instrument, as provided in Section
10 108(i) of the Internal Revenue Code.
11 (12) Add the amount excluded from federal gross income under
12 Section 103 of the Internal Revenue Code for interest received on
13 an obligation of a state other than Indiana, or a political
14 subdivision of such a state, that is acquired by the taxpayer after
15 December 31, 2011. For purposes of this subdivision:
16 (A) if the taxpayer receives interest from a pass through entity,
17 a regulated investment company, a hedge fund, or similar
18 arrangement, the taxpayer will be considered to have acquired
19 the obligation on the date the entity acquired the obligation;
20 (B) if ownership of the obligation occurs by means other than
21 a purchase, the date of acquisition of the obligation shall be
22 the date ownership of the obligation was transferred, except to
23 the extent provided in clause (A), and if a portion of the
24 obligation is acquired on multiple dates, the date of acquisition
25 shall be considered separately for each portion of the
26 obligation; and
27 (C) if ownership of the obligation occurred as the result of a
28 refinancing of another obligation, the acquisition date shall be
29 the date on which the obligation was refinanced.
30 (13) For taxable years beginning after December 25, 2016:
31 (A) for a corporation other than a real estate investment trust,
32 add:
33 (i) an amount equal to the amount reported by the taxpayer
34 on IRC 965 Transition Tax Statement, line 1; or
35 (ii) if the taxpayer deducted an amount under Section 965(c)
36 of the Internal Revenue Code in determining the taxpayer's
37 taxable income for purposes of the federal income tax, the
38 amount deducted under Section 965(c) of the Internal
39 Revenue Code; and
40 (B) for a real estate investment trust, add an amount equal to
41 the deduction for deferred foreign income that was claimed by
42 the taxpayer for the taxable year under Section 965(c) of the
2025 IN 357—LS 7053/DI 134 12
1 Internal Revenue Code, but only to the extent that the taxpayer
2 included income pursuant to Section 965 of the Internal
3 Revenue Code in its taxable income for federal income tax
4 purposes or is required to add back dividends paid under
5 subdivision (9).
6 (14) Add an amount equal to the deduction that was claimed by
7 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
8 Internal Revenue Code (attributable to global intangible
9 low-taxed income). The taxpayer shall separately specify the
10 amount of the reduction under Section 250(a)(1)(B)(i) of the
11 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
12 Internal Revenue Code.
13 (15) Subtract any interest expense paid or accrued in the current
14 taxable year but not deducted as a result of the limitation imposed
15 under Section 163(j)(1) of the Internal Revenue Code. Add any
16 interest expense paid or accrued in a previous taxable year but
17 allowed as a deduction under Section 163 of the Internal Revenue
18 Code in the current taxable year. For purposes of this subdivision,
19 an interest expense is considered paid or accrued only in the first
20 taxable year the deduction would have been allowable under
21 Section 163 of the Internal Revenue Code if the limitation under
22 Section 163(j)(1) of the Internal Revenue Code did not exist.
23 (16) Subtract the amount that would have been excluded from
24 gross income but for the enactment of Section 118(b)(2) of the
25 Internal Revenue Code for taxable years ending after December
26 22, 2017.
27 (17) Add an amount equal to the remainder of:
28 (A) the amount allowable as a deduction under Section 274(n)
29 of the Internal Revenue Code; minus
30 (B) the amount otherwise allowable as a deduction under
31 Section 274(n) of the Internal Revenue Code, if Section
32 274(n)(2)(D) of the Internal Revenue Code was not in effect
33 for amounts paid or incurred after December 31, 2020.
34 (18) For taxable years ending after March 12, 2020, subtract an
35 amount equal to the deduction disallowed pursuant to:
36 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
37 as modified by Sections 206 and 207 of the Taxpayer Certainty
38 and Disaster Relief Tax Act (Division EE of Public Law
39 116-260); and
40 (B) Section 3134(e) of the Internal Revenue Code.
41 (19) For taxable years beginning after December 31, 2022,
42 subtract an amount equal to the deduction disallowed under
2025 IN 357—LS 7053/DI 134 13
1 Section 280C(h) of the Internal Revenue Code.
2 (20) For taxable years beginning after December 31, 2021,
3 subtract the amount of any:
4 (A) federal, state, or local grant received by the taxpayer; and
5 (B) discharged federal, state, or local indebtedness incurred by
6 the taxpayer;
7 for purposes of providing or expanding access to broadband
8 service in this state.
9 (21) For taxable years beginning after December 31, 2021, add or
10 subtract amounts related to specified research or experimental
11 procedures as required under IC 6-3-2-29.
12 (22) Add or subtract any other amounts the taxpayer is:
13 (A) required to add or subtract; or
14 (B) entitled to deduct;
15 under IC 6-3-2.
16 (c) The following apply to taxable years beginning after December
17 31, 2018, for purposes of the add back of any deduction allowed on the
18 taxpayer's federal income tax return for wagering taxes, as provided in
19 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
20 the taxpayer is a corporation:
21 (1) For taxable years beginning after December 31, 2018, and
22 before January 1, 2020, a taxpayer is required to add back under
23 this section eighty-seven and five-tenths percent (87.5%) of any
24 deduction allowed on the taxpayer's federal income tax return for
25 wagering taxes.
26 (2) For taxable years beginning after December 31, 2019, and
27 before January 1, 2021, a taxpayer is required to add back under
28 this section seventy-five percent (75%) of any deduction allowed
29 on the taxpayer's federal income tax return for wagering taxes.
30 (3) For taxable years beginning after December 31, 2020, and
31 before January 1, 2022, a taxpayer is required to add back under
32 this section sixty-two and five-tenths percent (62.5%) of any
33 deduction allowed on the taxpayer's federal income tax return for
34 wagering taxes.
35 (4) For taxable years beginning after December 31, 2021, and
36 before January 1, 2023, a taxpayer is required to add back under
37 this section fifty percent (50%) of any deduction allowed on the
38 taxpayer's federal income tax return for wagering taxes.
39 (5) For taxable years beginning after December 31, 2022, and
40 before January 1, 2024, a taxpayer is required to add back under
41 this section thirty-seven and five-tenths percent (37.5%) of any
42 deduction allowed on the taxpayer's federal income tax return for
2025 IN 357—LS 7053/DI 134 14
1 wagering taxes.
2 (6) For taxable years beginning after December 31, 2023, and
3 before January 1, 2025, a taxpayer is required to add back under
4 this section twenty-five percent (25%) of any deduction allowed
5 on the taxpayer's federal income tax return for wagering taxes.
6 (7) For taxable years beginning after December 31, 2024, and
7 before January 1, 2026, a taxpayer is required to add back under
8 this section twelve and five-tenths percent (12.5%) of any
9 deduction allowed on the taxpayer's federal income tax return for
10 wagering taxes.
11 (8) For taxable years beginning after December 31, 2025, a
12 taxpayer is not required to add back under this section any amount
13 of a deduction allowed on the taxpayer's federal income tax return
14 for wagering taxes.
15 (d) In the case of life insurance companies (as defined in Section
16 816(a) of the Internal Revenue Code) that are organized under Indiana
17 law, the same as "life insurance company taxable income" (as defined
18 in Section 801 of the Internal Revenue Code), adjusted as follows:
19 (1) Subtract income that is exempt from taxation under this article
20 by the Constitution and statutes of the United States.
21 (2) Add an amount equal to any deduction allowed or allowable
22 under Section 170 of the Internal Revenue Code (concerning
23 charitable contributions).
24 (3) Add an amount equal to a deduction allowed or allowable
25 under Section 805 or Section 832(c) of the Internal Revenue Code
26 for taxes based on or measured by income and levied at the state
27 level by any state.
28 (4) Subtract an amount equal to the amount included in the
29 company's taxable income under Section 78 of the Internal
30 Revenue Code (concerning foreign tax credits).
31 (5) Add or subtract the amount necessary to make the adjusted
32 gross income of any taxpayer that owns property for which bonus
33 depreciation was allowed in the current taxable year or in an
34 earlier taxable year equal to the amount of adjusted gross income
35 that would have been computed had an election not been made
36 under Section 168(k) of the Internal Revenue Code to apply bonus
37 depreciation not applied to the property in the year that it was
38 placed in service.
39 (6) Add an amount equal to any deduction allowed under Section
40 172 of the Internal Revenue Code (concerning net operating
41 losses).
42 (7) Add or subtract the amount necessary to make the adjusted
2025 IN 357—LS 7053/DI 134 15
1 gross income of any taxpayer that placed Section 179 property (as
2 defined in Section 179 of the Internal Revenue Code) in service
3 in the current taxable year or in an earlier taxable year a taxable
4 year beginning prior to January 1, 2025, equal to the amount
5 of adjusted gross income that would have been computed had an
6 election for federal income tax purposes not been made for the
7 year in which the property was placed in service to take
8 deductions under Section 179 of the Internal Revenue Code in a
9 total amount exceeding the sum of:
10 (A) twenty-five thousand dollars ($25,000) one hundred
11 thousand dollars ($100,000) to the extent deductions under
12 Section 179 of the Internal Revenue Code were not elected as
13 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 357—LS 7053/DI 134 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 357—LS 7053/DI 134 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 357—LS 7053/DI 134 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 not applied to the property in the year that it was
21 placed in 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 a taxable
29 year beginning prior to January 1, 2025, equal to the amount
30 of adjusted gross income that would have been computed had an
31 election for federal income tax purposes not been made for the
32 year in which the property was placed in service to take
33 deductions under Section 179 of the Internal Revenue Code in a
34 total amount exceeding the sum of:
35 (A) twenty-five thousand dollars ($25,000) one hundred
36 thousand dollars ($100,000) to the extent deductions under
37 Section 179 of the Internal Revenue Code were not elected as
38 provided in clause (B); and
39 (B) for taxable years beginning after December 31, 2017, the
40 deductions elected under Section 179 of the Internal Revenue
41 Code on property acquired in an exchange if:
42 (i) the exchange would have been eligible for
2025 IN 357—LS 7053/DI 134 19
1 nonrecognition of gain or loss under Section 1031 of the
2 Internal Revenue Code in effect on January 1, 2017;
3 (ii) the exchange is not eligible for nonrecognition of gain or
4 loss under Section 1031 of the Internal Revenue Code; and
5 (iii) the taxpayer made an election to take deductions under
6 Section 179 of the Internal Revenue Code with regard to the
7 acquired property in the year that the property was placed
8 into service.
9 The amount of deductions allowable for an item of property
10 under this clause may not exceed the amount of adjusted gross
11 income realized on the property that would have been deferred
12 under the Internal Revenue Code in effect on January 1, 2017.
13 (8) Subtract income that is:
14 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
15 derived from patents); and
16 (B) included in the insurance company's taxable income under
17 the Internal Revenue Code.
18 (9) Add an amount equal to any income not included in gross
19 income as a result of the deferral of income arising from business
20 indebtedness discharged in connection with the reacquisition after
21 December 31, 2008, and before January 1, 2011, of an applicable
22 debt instrument, as provided in Section 108(i) of the Internal
23 Revenue Code. Subtract from the adjusted gross income of any
24 taxpayer that added an amount to adjusted gross income in a
25 previous year the amount necessary to offset the amount included
26 in federal gross income as a result of the deferral of income
27 arising from business indebtedness discharged in connection with
28 the reacquisition after December 31, 2008, and before January 1,
29 2011, of an applicable debt instrument, as provided in Section
30 108(i) of the Internal Revenue Code.
31 (10) Add an amount equal to any exempt insurance income under
32 Section 953(e) of the Internal Revenue Code that is active
33 financing income under Subpart F of Subtitle A, Chapter 1,
34 Subchapter N of the Internal Revenue Code.
35 (11) Add the amount excluded from federal gross income under
36 Section 103 of the Internal Revenue Code for interest received on
37 an obligation of a state other than Indiana, or a political
38 subdivision of such a state, that is acquired by the taxpayer after
39 December 31, 2011. For purposes of this subdivision:
40 (A) if the taxpayer receives interest from a pass through entity,
41 a regulated investment company, a hedge fund, or similar
42 arrangement, the taxpayer will be considered to have acquired
2025 IN 357—LS 7053/DI 134 20
1 the obligation on the date the entity acquired the obligation;
2 (B) if ownership of the obligation occurs by means other than
3 a purchase, the date of acquisition of the obligation shall be
4 the date ownership of the obligation was transferred, except to
5 the extent provided in clause (A), and if a portion of the
6 obligation is acquired on multiple dates, the date of acquisition
7 shall be considered separately for each portion of the
8 obligation; and
9 (C) if ownership of the obligation occurred as the result of a
10 refinancing of another obligation, the acquisition date shall be
11 the date on which the obligation was refinanced.
12 (12) For taxable years beginning after December 25, 2016, add:
13 (A) an amount equal to the amount reported by the taxpayer on
14 IRC 965 Transition Tax Statement, line 1; or
15 (B) if the taxpayer deducted an amount under Section 965(c)
16 of the Internal Revenue Code in determining the taxpayer's
17 taxable income for purposes of the federal income tax, the
18 amount deducted under Section 965(c) of the Internal Revenue
19 Code.
20 (13) Add an amount equal to the deduction that was claimed by
21 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
22 Internal Revenue Code (attributable to global intangible
23 low-taxed income). The taxpayer shall separately specify the
24 amount of the reduction under Section 250(a)(1)(B)(i) of the
25 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
26 Internal Revenue Code.
27 (14) Subtract any interest expense paid or accrued in the current
28 taxable year but not deducted as a result of the limitation imposed
29 under Section 163(j)(1) of the Internal Revenue Code. Add any
30 interest expense paid or accrued in a previous taxable year but
31 allowed as a deduction under Section 163 of the Internal Revenue
32 Code in the current taxable year. For purposes of this subdivision,
33 an interest expense is considered paid or accrued only in the first
34 taxable year the deduction would have been allowable under
35 Section 163 of the Internal Revenue Code if the limitation under
36 Section 163(j)(1) of the Internal Revenue Code did not exist.
37 (15) Subtract the amount that would have been excluded from
38 gross income but for the enactment of Section 118(b)(2) of the
39 Internal Revenue Code for taxable years ending after December
40 22, 2017.
41 (16) Add an amount equal to the remainder of:
42 (A) the amount allowable as a deduction under Section 274(n)
2025 IN 357—LS 7053/DI 134 21
1 of the Internal Revenue Code; minus
2 (B) the amount otherwise allowable as a deduction under
3 Section 274(n) of the Internal Revenue Code, if Section
4 274(n)(2)(D) of the Internal Revenue Code was not in effect
5 for amounts paid or incurred after December 31, 2020.
6 (17) For taxable years ending after March 12, 2020, subtract an
7 amount equal to the deduction disallowed pursuant to:
8 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
9 as modified by Sections 206 and 207 of the Taxpayer Certainty
10 and Disaster Relief Tax Act (Division EE of Public Law
11 116-260); and
12 (B) Section 3134(e) of the Internal Revenue Code.
13 (18) For taxable years beginning after December 31, 2022,
14 subtract an amount equal to the deduction disallowed under
15 Section 280C(h) of the Internal Revenue Code.
16 (19) For taxable years beginning after December 31, 2021, add or
17 subtract amounts related to specified research or experimental
18 procedures as required under IC 6-3-2-29.
19 (20) Add or subtract any other amounts the taxpayer is:
20 (A) required to add or subtract; or
21 (B) entitled to deduct;
22 under IC 6-3-2.
23 (f) In the case of trusts and estates, "taxable income" (as defined for
24 trusts and estates in Section 641(b) of the Internal Revenue Code)
25 adjusted as follows:
26 (1) Subtract income that is exempt from taxation under this article
27 by the Constitution and statutes of the United States.
28 (2) Subtract an amount equal to the amount of a September 11
29 terrorist attack settlement payment included in the federal
30 adjusted gross income of the estate of a victim of the September
31 11 terrorist attack or a trust to the extent the trust benefits a victim
32 of the September 11 terrorist attack.
33 (3) 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 not applied to the property in the year that it was
40 placed in service.
41 (4) Add an amount equal to any deduction allowed under Section
42 172 of the Internal Revenue Code (concerning net operating
2025 IN 357—LS 7053/DI 134 22
1 losses).
2 (5) 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 a taxable
6 year beginning prior to January 1, 2025, equal to the amount
7 of adjusted gross income that would have been computed had an
8 election for federal income tax purposes not been made for the
9 year in which the property was placed in service to take
10 deductions under Section 179 of the Internal Revenue Code in a
11 total amount exceeding the sum of:
12 (A) twenty-five thousand dollars ($25,000) one hundred
13 thousand dollars ($100,000) to the extent deductions under
14 Section 179 of the Internal Revenue Code were not elected as
15 provided in clause (B); and
16 (B) for taxable years beginning after December 31, 2017, the
17 deductions elected under Section 179 of the Internal Revenue
18 Code on property acquired in an exchange if:
19 (i) the exchange would have been eligible for
20 nonrecognition of gain or loss under Section 1031 of the
21 Internal Revenue Code in effect on January 1, 2017;
22 (ii) the exchange is not eligible for nonrecognition of gain or
23 loss under Section 1031 of the Internal Revenue Code; and
24 (iii) the taxpayer made an election to take deductions under
25 Section 179 of the Internal Revenue Code with regard to the
26 acquired property in the year that the property was placed
27 into service.
28 The amount of deductions allowable for an item of property
29 under this clause may not exceed the amount of adjusted gross
30 income realized on the property that would have been deferred
31 under the Internal Revenue Code in effect on January 1, 2017.
32 (6) Subtract income that is:
33 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
34 derived from patents); and
35 (B) included in the taxpayer's taxable income under the
36 Internal Revenue Code.
37 (7) Add an amount equal to any income not included in gross
38 income as a result of the deferral of income arising from business
39 indebtedness discharged in connection with the reacquisition after
40 December 31, 2008, and before January 1, 2011, of an applicable
41 debt instrument, as provided in Section 108(i) of the Internal
42 Revenue Code. Subtract from the adjusted gross income of any
2025 IN 357—LS 7053/DI 134 23
1 taxpayer that added an amount to adjusted gross income in a
2 previous year the amount necessary to offset the amount included
3 in federal gross income as a result of the deferral of income
4 arising from business indebtedness discharged in connection with
5 the reacquisition after December 31, 2008, and before January 1,
6 2011, of an applicable debt instrument, as provided in Section
7 108(i) of the Internal Revenue Code.
8 (8) Add the amount excluded from federal gross income under
9 Section 103 of the Internal Revenue Code for interest received on
10 an obligation of a state other than Indiana, or a political
11 subdivision of such a state, that is acquired by the taxpayer after
12 December 31, 2011. For purposes of this subdivision:
13 (A) if the taxpayer receives interest from a pass through entity,
14 a regulated investment company, a hedge fund, or similar
15 arrangement, the taxpayer will be considered to have acquired
16 the obligation on the date the entity acquired the obligation;
17 (B) if ownership of the obligation occurs by means other than
18 a purchase, the date of acquisition of the obligation shall be
19 the date ownership of the obligation was transferred, except to
20 the extent provided in clause (A), and if a portion of the
21 obligation is acquired on multiple dates, the date of acquisition
22 shall be considered separately for each portion of the
23 obligation; and
24 (C) if ownership of the obligation occurred as the result of a
25 refinancing of another obligation, the acquisition date shall be
26 the date on which the obligation was refinanced.
27 (9) For taxable years beginning after December 25, 2016, add an
28 amount equal to:
29 (A) the amount reported by the taxpayer on IRC 965
30 Transition Tax Statement, line 1;
31 (B) if the taxpayer deducted an amount under Section 965(c)
32 of the Internal Revenue Code in determining the taxpayer's
33 taxable income for purposes of the federal income tax, the
34 amount deducted under Section 965(c) of the Internal Revenue
35 Code; and
36 (C) with regard to any amounts of income under Section 965
37 of the Internal Revenue Code distributed by the taxpayer, the
38 deduction under Section 965(c) of the Internal Revenue Code
39 attributable to such distributed amounts and not reported to the
40 beneficiary.
41 For purposes of this article, the amount required to be added back
42 under clause (B) is not considered to be distributed or
2025 IN 357—LS 7053/DI 134 24
1 distributable to a beneficiary of the estate or trust for purposes of
2 Sections 651 and 661 of the Internal Revenue Code.
3 (10) Subtract any interest expense paid or accrued in the current
4 taxable year but not deducted as a result of the limitation imposed
5 under Section 163(j)(1) of the Internal Revenue Code. Add any
6 interest expense paid or accrued in a previous taxable year but
7 allowed as a deduction under Section 163 of the Internal Revenue
8 Code in the current taxable year. For purposes of this subdivision,
9 an interest expense is considered paid or accrued only in the first
10 taxable year the deduction would have been allowable under
11 Section 163 of the Internal Revenue Code if the limitation under
12 Section 163(j)(1) of the Internal Revenue Code did not exist.
13 (11) Add an amount equal to the deduction for qualified business
14 income that was claimed by the taxpayer for the taxable year
15 under Section 199A of the Internal Revenue Code.
16 (12) Subtract the amount that would have been excluded from
17 gross income but for the enactment of Section 118(b)(2) of the
18 Internal Revenue Code for taxable years ending after December
19 22, 2017.
20 (13) Add an amount equal to the remainder of:
21 (A) the amount allowable as a deduction under Section 274(n)
22 of the Internal Revenue Code; minus
23 (B) the amount otherwise allowable as a deduction under
24 Section 274(n) of the Internal Revenue Code, if Section
25 274(n)(2)(D) of the Internal Revenue Code was not in effect
26 for amounts paid or incurred after December 31, 2020.
27 (14) For taxable years beginning after December 31, 2017, and
28 before January 1, 2021, add an amount equal to the excess
29 business loss of the taxpayer as defined in Section 461(l)(3) of the
30 Internal Revenue Code. In addition:
31 (A) If a taxpayer has an excess business loss under this
32 subdivision and also has modifications under subdivisions (3)
33 and (5) for property placed in service during the taxable year,
34 the taxpayer shall treat a portion of the taxable year
35 modifications for that property as occurring in the taxable year
36 the property is placed in service and a portion of the
37 modifications as occurring in the immediately following
38 taxable year.
39 (B) The portion of the modifications under subdivisions (3)
40 and (5) for property placed in service during the taxable year
41 treated as occurring in the taxable year in which the property
42 is placed in service equals:
2025 IN 357—LS 7053/DI 134 25
1 (i) the modification for the property otherwise determined
2 under this section; minus
3 (ii) the excess business loss disallowed under this
4 subdivision;
5 but not less than zero (0).
6 (C) The portion of the modifications under subdivisions (3)
7 and (5) for property placed in service during the taxable year
8 treated as occurring in the taxable year immediately following
9 the taxable year in which the property is placed in service
10 equals the modification for the property otherwise determined
11 under this section minus the amount in clause (B).
12 (D) Any reallocation of modifications between taxable years
13 under clauses (B) and (C) shall be first allocated to the
14 modification under subdivision (3), then to the modification
15 under subdivision (5).
16 (15) For taxable years ending after March 12, 2020, subtract an
17 amount equal to the deduction disallowed pursuant to:
18 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
19 as modified by Sections 206 and 207 of the Taxpayer Certainty
20 and Disaster Relief Tax Act (Division EE of Public Law
21 116-260); and
22 (B) Section 3134(e) of the Internal Revenue Code.
23 (16) For taxable years beginning after December 31, 2022,
24 subtract an amount equal to the deduction disallowed under
25 Section 280C(h) of the Internal Revenue Code.
26 (17) Except as provided in subsection (c), for taxable years
27 beginning after December 31, 2022, add an amount equal to any
28 deduction or deductions allowed or allowable in determining
29 taxable income under Section 641(b) of the Internal Revenue
30 Code for taxes based on or measured by income and levied at the
31 state level by any state of the United States.
32 (18) For taxable years beginning after December 31, 2021, add or
33 subtract amounts related to specified research or experimental
34 procedures as required under IC 6-3-2-29.
35 (19) Add or subtract any other amounts the taxpayer is:
36 (A) required to add or subtract; or
37 (B) entitled to deduct;
38 under IC 6-3-2.
39 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
40 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
41 "adjusted gross income" of a pass through entity means the items of
42 ordinary income and loss in the case of a partnership or a corporation
2025 IN 357—LS 7053/DI 134 26
1 described in IC 6-3-2-2.8(2), or distributions subject to tax for state and
2 federal income tax for beneficiaries in the case of a trust or estate,
3 whichever is applicable, for the taxable year modified as follows:
4 (1) Add the separately stated items of income and gains, or the
5 equivalent items that must be considered separately by a
6 beneficiary, as determined for federal purposes, attributed to the
7 partners, shareholders, or beneficiaries of the pass through entity,
8 determined without regard to whether the owner is permitted to
9 exclude all or part of the income or gain or deduct any amount
10 against the income or gain.
11 (2) Subtract the separately stated items of deductions or losses or
12 items that must be considered separately by beneficiaries, as
13 determined for federal purposes, attributed to partners,
14 shareholders, or beneficiaries of the pass through entity and that
15 are deductible by an individual in determining adjusted gross
16 income as defined under Section 62 of the Internal Revenue
17 Code:
18 (A) limited as if the partners, shareholders, and beneficiaries
19 deducted the maximum allowable loss or deduction allowable
20 for the taxable year prior to any amount deductible from the
21 pass through entity; but
22 (B) not considering any disallowance of deductions resulting
23 from federal basis limitations for the partner, shareholder, or
24 beneficiary.
25 (3) Add or subtract any modifications to adjusted gross income
26 that would be required both for individuals under subsection (a)
27 and corporations under subsection (b) to the extent otherwise
28 provided in those subsections, including amounts that are
29 allowable for which such modifications are necessary to account
30 for separately stated items in subdivision (1) or (2).
31 (h) Subsections (a)(36), (b)(22), (d)(20), (e)(20), or (f)(19) may not
32 be construed to require an add back or allow a deduction or exemption
33 more than once for a particular add back, deduction, or exemption.
34 (i) For taxable years beginning after December 25, 2016, if:
35 (1) a taxpayer is a shareholder, either directly or indirectly, in a
36 corporation that is an E&P deficit foreign corporation as defined
37 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
38 earnings and profit deficit, or a portion of the earnings and profit
39 deficit, of the E&P deficit foreign corporation is permitted to
40 reduce the federal adjusted gross income or federal taxable
41 income of the taxpayer, the deficit, or the portion of the deficit,
42 shall also reduce the amount taxable under this section to the
2025 IN 357—LS 7053/DI 134 27
1 extent permitted under the Internal Revenue Code, however, in no
2 case shall this permit a reduction in the amount taxable under
3 Section 965 of the Internal Revenue Code for purposes of this
4 section to be less than zero (0); and
5 (2) the Internal Revenue Service issues guidance that such an
6 income or deduction is not reported directly on a federal tax
7 return or is to be reported in a manner different than specified in
8 this section, this section shall be construed as if federal adjusted
9 gross income or federal taxable income included the income or
10 deduction.
11 (j) If a partner is required to include an item of income, a deduction,
12 or another tax attribute in the partner's adjusted gross income tax return
13 pursuant to IC 6-3-4.5, such item shall be considered to be includible
14 in the partner's federal adjusted gross income or federal taxable
15 income, regardless of whether such item is actually required to be
16 reported by the partner for federal income tax purposes. For purposes
17 of this subsection:
18 (1) items for which a valid election is made under IC 6-3-4.5-6,
19 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
20 in the partner's adjusted gross income or taxable income; and
21 (2) items for which the partnership did not make an election under
22 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
23 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
24 shall be included in the partner's adjusted gross income or taxable
25 income.
26 (k) The following apply for purposes of this section:
27 (1) For purposes of subsections (b) and (f), if a taxpayer is an
28 organization that has more than one (1) trade or business subject
29 to the provisions of Section 512(a)(6) of the Internal Revenue
30 Code, the following rules apply for taxable years beginning after
31 December 31, 2017:
32 (A) If a trade or business has federal unrelated business
33 taxable income of zero (0) or greater for a taxable year, the
34 unrelated business taxable income and modifications required
35 under this section shall be combined in determining the
36 adjusted gross income of the taxpayer and shall not be treated
37 as being subject to the provisions of Section 512(a)(6) of the
38 Internal Revenue Code if one (1) or more trades or businesses
39 have negative Indiana adjusted gross income after
40 adjustments.
41 (B) If a trade or business has federal unrelated business
42 taxable income of less than zero (0) for a taxable year, the
2025 IN 357—LS 7053/DI 134 28
1 taxpayer shall apply the modifications under this section for
2 the taxable year against the net operating loss in the manner
3 required under IC 6-3-2-2.5 and IC 6-3-2-2.6 for separately
4 stated net operating losses. However, if the application of
5 modifications required under IC 6-3-2-2.5 or IC 6-3-2-2.6
6 results in the separately stated net operating loss for the trade
7 or business being zero (0), the modifications that increase
8 adjusted gross income under this section and remain after the
9 calculations to adjust the separately stated net operating loss
10 to zero (0) that result from the trade or business must be
11 treated as modifications to which clause (A) applies for the
12 taxable year.
13 (C) If a trade or business otherwise described in Section
14 512(a)(6) of the Internal Revenue Code incurred a net
15 operating loss for a taxable year beginning after December 31,
16 2017, and before January 1, 2021, and the net operating loss
17 was carried back for federal tax purposes:
18 (i) if the loss was carried back to a taxable year for which
19 the requirements under Section 512(a)(6) of the Internal
20 Revenue Code did not apply, the portion of the loss and
21 modifications attributable to the loss shall be treated as
22 adjusted gross income of the taxpayer for the first taxable
23 year of the taxpayer beginning after December 31, 2022, and
24 shall be treated as part of the adjusted gross income
25 attributable to clause (A), unless, and to the extent, the loss
26 and modifications were applied to adjusted gross income for
27 a previous taxable year, as determined under this article; and
28 (ii) if the loss was carried back to a taxable year for which
29 the requirements under Section 512(a)(6) of the Internal
30 Revenue Code applied, the portion of the loss and
31 modifications attributable to the loss shall be treated as
32 adjusted gross income of the taxpayer for the first taxable
33 year of the taxpayer beginning after December 31, 2022, and
34 for purposes of this clause, the inclusion of losses and
35 modifications shall be in the same manner as provided in
36 clause (B), unless, and to the extent, the loss and
37 modifications were applied to adjusted gross income for a
38 previous taxable year, as determined under this article.
39 (D) Notwithstanding any provision in this subdivision, if a
40 taxpayer computed its adjusted gross income for a taxable year
41 beginning before January 1, 2023, based on a reasonable
42 interpretation of this article, the taxpayer shall be permitted to
2025 IN 357—LS 7053/DI 134 29
1 compute its adjusted gross income for those taxable years
2 based on that interpretation. However, a taxpayer must
3 continue to report any tax attributes for taxable years
4 beginning after December 31, 2022, in a manner consistent
5 with its previous interpretation.
6 (2) In the case of a corporation, other than a captive real estate
7 investment trust, for which the adjusted gross income under this
8 article is determined after a deduction for dividends paid under
9 the Internal Revenue Code, the modifications required under this
10 section shall be applied in ratio to the corporation's taxable
11 income (as defined in Section 63 of the Internal Revenue Code)
12 after deductions for dividends paid under the Internal Revenue
13 Code compared to the corporation's taxable income (as defined in
14 Section 63 of the Internal Revenue Code) before the deduction for
15 dividends paid under the Internal Revenue Code.
16 (3) In the case of a trust or estate, the trust or estate is required to
17 include only the portion of the modifications not passed through
18 to beneficiaries.
19 (4) In the case of a taxpayer for which modifications are required
20 to be applied against a separately stated net operating loss under
21 IC 6-3-2-2.5 or IC 6-3-2-2.6, the modifications required under this
22 section must be adjusted to reflect the required application of the
23 modifications against a separately stated net operating loss, in
24 order to avoid the application of a particular modification
25 multiple times.
26 SECTION 2. IC 6-5.5-1-2, AS AMENDED BY P.L.194-2023,
27 SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 JANUARY 1, 2025 (RETROACTIVE)]: Sec. 2. (a) Except as provided
29 in subsections (b) through (d), "adjusted gross income" means taxable
30 income as defined in Section 63 of the Internal Revenue Code, adjusted
31 as follows:
32 (1) Add the following amounts:
33 (A) An amount equal to a deduction allowed or allowable
34 under Section 166, Section 585, or Section 593 of the Internal
35 Revenue Code.
36 (B) An amount equal to a deduction allowed or allowable
37 under Section 170 of the Internal Revenue Code.
38 (C) An amount equal to a deduction or deductions allowed or
39 allowable under Section 63 of the Internal Revenue Code for
40 taxes based on or measured by income and levied at the state
41 level by a state of the United States or levied at the local level
42 by any subdivision of a state of the United States.
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1 (D) The amount of interest excluded under Section 103 of the
2 Internal Revenue Code or under any other federal law, minus
3 the associated expenses disallowed in the computation of
4 taxable income under Section 265 of the Internal Revenue
5 Code.
6 (E) An amount equal to the deduction allowed under Section
7 172 or 1212 of the Internal Revenue Code for net operating
8 losses or net capital losses.
9 (F) For a taxpayer that is not a large bank (as defined in
10 Section 585(c)(2) of the Internal Revenue Code), an amount
11 equal to the recovery of a debt, or part of a debt, that becomes
12 worthless to the extent a deduction was allowed from gross
13 income in a prior taxable year under Section 166(a) of the
14 Internal Revenue Code.
15 (G) Add the amount necessary to make the adjusted gross
16 income of any taxpayer that owns property for which bonus
17 depreciation was allowed in the current taxable year or in an
18 earlier taxable year equal to the amount of adjusted gross
19 income that would have been computed had an election not
20 been made under Section 168(k) of the Internal Revenue Code
21 to apply bonus depreciation not applied to the property in the
22 year that it was placed in service.
23 (H) Add the amount necessary to make the adjusted gross
24 income of any taxpayer that placed Section 179 property (as
25 defined in Section 179 of the Internal Revenue Code) in
26 service in the current taxable year or in an earlier taxable year
27 a taxable year beginning prior to January 1, 2025, equal to
28 the amount of adjusted gross income that would have been
29 computed had an election for federal income tax purposes not
30 been made for the year in which the property was placed in
31 service to take deductions under Section 179 of the Internal
32 Revenue Code in a total amount exceeding the sum of:
33 (i) twenty-five thousand dollars ($25,000) one hundred
34 thousand dollars ($100,000) to the extent deductions under
35 Section 179 of the Internal Revenue Code were not elected
36 as provided in item (ii); and
37 (ii) for taxable years beginning after December 31, 2017, the
38 deductions elected under Section 179 of the Internal
39 Revenue Code on property acquired in an exchange if the
40 exchange would have been eligible for nonrecognition of
41 gain or loss under Section 1031 of the Internal Revenue
42 Code in effect on January 1, 2017, the exchange is not
2025 IN 357—LS 7053/DI 134 31
1 eligible for nonrecognition of gain or loss under Section
2 1031 of the Internal Revenue Code, and the taxpayer made
3 an election to take deductions under Section 179 of the
4 Internal Revenue Code with regard to the acquired property
5 in the year that the property was placed into service. The
6 amount of deductions allowable for an item of property
7 under this item may not exceed the amount of adjusted gross
8 income realized on the property that would have been
9 deferred under the Internal Revenue Code in effect on
10 January 1, 2017.
11 (I) Add an amount equal to any income not included in gross
12 income as a result of the deferral of income arising from
13 business indebtedness discharged in connection with the
14 reacquisition after December 31, 2008, and before January 1,
15 2011, of an applicable debt instrument, as provided in Section
16 108(i) of the Internal Revenue Code. Subtract from the
17 adjusted gross income of any taxpayer that added an amount
18 to adjusted gross income in a previous year the amount
19 necessary to offset the amount included in federal gross
20 income as a result of the deferral of income arising from
21 business indebtedness discharged in connection with the
22 reacquisition after December 31, 2008, and before January 1,
23 2011, of an applicable debt instrument, as provided in Section
24 108(i) of the Internal Revenue Code.
25 (J) Add an amount equal to any exempt insurance income
26 under Section 953(e) of the Internal Revenue Code for active
27 financing income under Subpart F, Subtitle A, Chapter 1,
28 Subchapter N of the Internal Revenue Code.
29 (K) Add an amount equal to the remainder of:
30 (i) the amount allowable as a deduction under Section
31 274(n) of the Internal Revenue Code; minus
32 (ii) 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 (2) Subtract the following amounts:
37 (A) Income that the United States Constitution or any statute
38 of the United States prohibits from being used to measure the
39 tax imposed by this chapter.
40 (B) Income that is derived from sources outside the United
41 States, as defined by the Internal Revenue Code.
42 (C) An amount equal to a debt or part of a debt that becomes
2025 IN 357—LS 7053/DI 134 32
1 worthless, as permitted under Section 166(a) of the Internal
2 Revenue Code.
3 (D) An amount equal to any bad debt reserves that are
4 included in federal income because of accounting method
5 changes required by Section 585(c)(3)(A) or Section 593 of
6 the Internal Revenue Code.
7 (E) The amount necessary to make the adjusted gross income
8 of any taxpayer that owns property for which bonus
9 depreciation was allowed in the current taxable year or in an
10 earlier taxable year equal to the amount of adjusted gross
11 income that would have been computed had an election not
12 been made under Section 168(k) of the Internal Revenue Code
13 to apply bonus depreciation. not applied to the property in
14 the year that it was placed in service.
15 (F) The amount necessary to make the adjusted gross income
16 of any taxpayer that placed Section 179 property (as defined
17 in Section 179 of the Internal Revenue Code) in service in the
18 current taxable year or in an earlier taxable year a taxable
19 year beginning prior to January 1, 2025, equal to the
20 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 (i) twenty-five thousand dollars ($25,000) one hundred
26 thousand dollars ($100,000) to the extent deductions under
27 Section 179 of the Internal Revenue Code were not elected
28 as provided in item (ii); and
29 (ii) for taxable years beginning after December 31, 2017, the
30 deductions elected under Section 179 of the Internal
31 Revenue Code on property acquired in an exchange if the
32 exchange would have been eligible for nonrecognition of
33 gain or loss under Section 1031 of the Internal Revenue
34 Code in effect on January 1, 2017, the exchange is not
35 eligible for nonrecognition of gain or loss under Section
36 1031 of the Internal Revenue Code, and the taxpayer made
37 an election to take deductions under Section 179 of the
38 Internal Revenue Code with regard to the acquired property
39 in the year that the property was placed into service. The
40 amount of deductions allowable for an item of property
41 under this item may not exceed the amount of adjusted gross
42 income realized on the property that would have been
2025 IN 357—LS 7053/DI 134 33
1 deferred under the Internal Revenue Code in effect on
2 January 1, 2017.
3 (G) Income that is:
4 (i) exempt from taxation under IC 6-3-2-21.7; and
5 (ii) included in the taxpayer's taxable income under the
6 Internal Revenue Code.
7 (H) The amount that would have been excluded from gross
8 income but for the enactment of Section 118(b)(2) of the
9 Internal Revenue Code for taxable years ending after
10 December 22, 2017.
11 (I) For taxable years ending after March 12, 2020, an amount
12 equal to the deduction disallowed pursuant to:
13 (i) Section 2301(e) of the CARES Act (Public Law
14 116-136), as modified by Sections 206 and 207 of the
15 Taxpayer Certainty and Disaster Relief Tax Act (Division
16 EE of Public Law 116-260); and
17 (ii) Section 3134(e) of the Internal Revenue Code.
18 (J) Subtract an amount equal to the deduction disallowed
19 under Section 280C(h) of the Internal Revenue Code.
20 (3) Make the following adjustments:
21 (A) Subtract the amount of any interest expense paid or
22 accrued in the current taxable year but not deducted as a result
23 of the limitation imposed under Section 163(j)(1) of the
24 Internal Revenue Code.
25 (B) Add any interest expense paid or accrued in a previous
26 taxable year but allowed as a deduction under Section 163 of
27 the Internal Revenue Code in the current taxable year.
28 (C) For taxable years beginning after December 31, 2021, add
29 or subtract amounts related to specified research or
30 experimental procedures as required under IC 6-3-2-29.
31 For purposes of this subdivision, an interest expense is considered
32 paid or accrued only in the first taxable year the deduction would
33 have been allowable under Section 163 of the Internal Revenue
34 Code if the limitation under Section 163(j)(1) of the Internal
35 Revenue Code did not exist.
36 (b) In the case of a credit union, "adjusted gross income" for a
37 taxable year means the total transfers to undivided earnings minus
38 dividends for that taxable year after statutory reserves are set aside
39 under IC 28-7-1-24.
40 (c) In the case of an investment company, "adjusted gross income"
41 means the company's federal taxable income adjusted as follows:
42 (1) Add the amount excluded from federal gross income under
2025 IN 357—LS 7053/DI 134 34
1 Section 103 of the Internal Revenue Code for interest received on
2 an obligation of a state other than Indiana, or a political
3 subdivision of such a state, that is acquired by the taxpayer after
4 December 31, 2011.
5 (2) Make the following adjustments:
6 (A) Subtract the amount of any interest expense paid or
7 accrued in the current taxable year but not deducted as a result
8 of the limitation imposed under Section 163(j)(1) of the
9 Internal Revenue Code.
10 (B) Add any interest expense paid or accrued in a previous
11 taxable year but allowed as a deduction under Section 163 of
12 the Internal Revenue Code in the current taxable year.
13 For purposes of this subdivision, an interest expense is considered
14 paid or accrued only in the first taxable year the deduction would
15 have been allowable under Section 163 of the Internal Revenue
16 Code if the limitation under Section 163(j)(1) of the Internal
17 Revenue Code did not exist.
18 (3) Multiply the amount determined after the adjustments in
19 subdivisions (1) and (2) by the quotient of:
20 (A) the aggregate of the gross payments collected by the
21 company during the taxable year from old and new business
22 upon investment contracts issued by the company and held by
23 residents of Indiana; divided by
24 (B) the total amount of gross payments collected during the
25 taxable year by the company from the business upon
26 investment contracts issued by the company and held by
27 persons residing within Indiana and elsewhere.
28 (d) As used in subsection (c), "investment company" means a
29 person, copartnership, association, limited liability company, or
30 corporation, whether domestic or foreign, that:
31 (1) is registered under the Investment Company Act of 1940 (15
32 U.S.C. 80a-1 et seq.); and
33 (2) solicits or receives a payment to be made to itself and issues
34 in exchange for the payment:
35 (A) a so-called bond;
36 (B) a share;
37 (C) a coupon;
38 (D) a certificate of membership;
39 (E) an agreement;
40 (F) a pretended agreement; or
41 (G) other evidences of obligation;
42 entitling the holder to anything of value at some future date, if the
2025 IN 357—LS 7053/DI 134 35
1 gross payments received by the company during the taxable year
2 on outstanding investment contracts, plus interest and dividends
3 earned on those contracts (by prorating the interest and dividends
4 earned on investment contracts by the same proportion that
5 certificate reserves (as defined by the Investment Company Act
6 of 1940) is to the company's total assets) is at least fifty percent
7 (50%) of the company's gross payments upon investment
8 contracts plus gross income from all other sources except
9 dividends from subsidiaries for the taxable year. The term
10 "investment contract" means an instrument listed in clauses (A)
11 through (G).
12 (e) If a partner is required to include an item of income, a deduction,
13 or another tax attribute in the partner's adjusted gross income tax return
14 pursuant to IC 6-3-4.5, such item shall be considered to be includible
15 in the partner's federal adjusted gross income or federal taxable
16 income, regardless of whether such item is actually required to be
17 reported by the partner for federal income tax purposes. For purposes
18 of this subsection:
19 (1) items for which a valid election is made under IC 6-3-4.5-6,
20 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
21 in the partner's adjusted gross income or taxable income; and
22 (2) items for which the partnership did not make an election under
23 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
24 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
25 shall be included in the partner's adjusted gross income or taxable
26 income.
27 SECTION 3. [EFFECTIVE JANUARY 1, 2025 (RETROACTIVE)]
28 (a) IC 6-3-1-3.5 and IC 6-5.5-1-2, both as amended by this act,
29 apply to taxable years beginning after December 31, 2024.
30 (b) This SECTION expires July 1, 2028.
31 SECTION 4. An emergency is declared for this act.
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