HOUSE BILL No. 1615
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3.1-31.
Synopsis: Fresh start income tax credit. Establishes a state income tax
credit for a taxpayer that employs an individual who within the
preceding four years was either: (1) convicted of a felony; or (2)
released from incarceration for conviction of a felony. Provides that the
amount of the credit each taxable year is $500 per qualifying employee.
Effective: January 1, 2008.
January 23, 2007, read first time and referred to Committee on Ways and Means.
First Regular Session 115th General Assembly (2007)
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HOUSE BILL No. 1615
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-3.1-31; (07)IN1615.1.1. -->
SECTION 1. IC 6-3.1-31 IS ADDED TO THE INDIANA CODE
AS A NEW
CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2008]:
Chapter 31. Fresh Start Tax Credit
Sec. 1. As used in this chapter, "felony" has the meaning set
forth in IC 33-23-1-5.
Sec. 2. As used in this chapter, "full-time basis" means at least
thirty (30) hours per week.
Sec. 3. As used in this chapter, "pass through entity" means the
(1) A corporation that is exempt from the adjusted gross
income tax under IC 6-3-2-2.8(2).
(2) A partnership.
(3) A limited liability company.
(4) A limited liability partnership.
Sec. 4. As used in this chapter, "qualified employee" as of a
specified date means an individual that was either:
(1) convicted of a felony; or
(2) released from incarceration for conviction of a felony;
within the immediately preceding four (4) years from the specified
Sec. 5. As used in this chapter, "state tax liability" means a
taxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 6-5.5 (the financial institutions tax); and
(3) IC 27-1-18-2 (the insurance premiums tax);
as computed after the application of the credits that under
IC 6-3.1-1-2 are to be applied before the credit provided by this
Sec. 6. As used in this chapter, "taxpayer" means an individual
or entity that has state tax liability.
Sec. 7. (a) Each taxable year, a taxpayer is entitled to a credit
against the taxpayer's state tax liability for employing one (1) or
more qualified employees on a full-time basis during the taxable
(b) For each taxable year, the amount of the credit provided by
subsection (a) is an amount equal to:
(1) five hundred dollars ($500); multiplied by
(2) the number of person years that a taxpayer employs one
(1) or more qualified employees on a full-time basis during the
taxable year, as determined in subsection (c).
(c) The number of person years that a taxpayer employs one (1)
or more qualified employees on a full-time basis during a taxable
year is the amount determined under STEP THREE of the
STEP ONE: For each qualified employee employed by the
taxpayer during the taxable year, determine the number of
months during the taxable year that the taxpayer employed
the qualified employee on a full-time basis.
STEP TWO: Determine the sum of the STEP ONE results.
STEP THREE: Divide:
(A) the STEP TWO result; by
(B) twelve (12).
Sec. 8. (a) If the credit provided by this chapter exceeds the
taxpayer's state tax liability for the taxable year for which the
credit is first claimed, the excess may be carried forward to
succeeding taxable years and used as a credit against the
taxpayer's state tax liability during those taxable years. Each time
that the credit is carried forward to a succeeding taxable year, the
credit is to be reduced by the amount that was used as a credit
during the immediately preceding taxable year. The credit
provided by this chapter may be carried forward and applied to
succeeding taxable years for nine (9) taxable years following the
taxable year is which the credit is originally claimed.
(b) A taxpayer is not entitled to any carryback or refund of any
Sec. 9. If a pass through entity does not have state tax liability
against which the credit granted by this chapter may be applied, a
shareholder, partner, or member of the pass through entity is
entitled to a credit equal to:
(1) the credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is
Sec. 10. To obtain a credit under this chapter, a taxpayer must
claim the credit in the manner prescribed by the department. The
taxpayer shall submit to the department all information that the
department determines is necessary to calculate the credit
provided by this chapter.
SOURCE: ; (07)IN1615.1.2. -->
SECTION 2. [EFFECTIVE JANUARY 1, 2008] IC 6-3.1-31, as
added by this act, applies only to taxable years that begin after
December 31, 2007.