Citations Affected: IC 6-3; noncode.
Synopsis: Income tax deduction for disability income. Removes a
provision that prohibits a person who is at least 65 years of age from
receiving the adjusted gross income tax deduction for disability
Effective: January 1, 2002.
January 8, 2001, read first time and referred to Committee on Finance.
January 25, 2001, reported favorably _ Do Pass.
January 29, 2001, read second time, ordered engrossed. Engrossed.
January 30, 2001, read third time, passed. Yeas 49, nays 0.
A BILL FOR AN ACT to amend the Indiana Code concerning
IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JANUARY 1, 2002]: Sec. 9. (a) An individual who:
(1) has not attained age sixty-five (65) before the end of a
particular taxable year;
(2) (1) retired on disability before the end of that the taxable year;
(3) (2) was permanently and totally disabled, as determined under
subsection (c), at the time of retirement;
is entitled to a deduction from the individual's adjusted gross income for that taxable year in the amount determined under subsection (b).
(b) The deduction provided by subsection (a) is the amount determined using the following STEPS:
STEP ONE: Determine the amount received by the individual during the taxable year through an accident and health plan for personal injuries or sickness to the extent that:
(A) these amounts are attributable to contributions by the individual's employer that were not includable in the
individual's gross income or are paid by the employer; and
(B) these amounts constitute wages or payments in lieu of wages for a period during which the employee is absent from work because of permanent and total disability.
STEP TWO: Determine for each week of the taxable year the amount by which each weekly payment referred to in STEP ONE exceeds one hundred dollars ($100), then add these amounts.
STEP THREE: Determine the amount by which the individual's federal adjusted gross income for the taxable year, as defined by Section 62 of the Internal Revenue Code, exceeds fifteen thousand dollars ($15,000).
STEP FOUR: Subtract from the amount determined in STEP ONE the amount determined in STEP TWO and the amount determined in STEP THREE.
(c) For purposes of this section, an individual is permanently and totally disabled if the individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months. An individual may not be considered to be permanently and totally disabled unless he furnishes proof of the existence of the disability as the department of revenue may require.
SECTION 2. [EFFECTIVE JANUARY 1, 2002] IC 6-3-2-9 , as amended by this act, applies only to taxable years beginning after December 31, 2001.