I move that Senate Bill 500 be amended to read as follows:
paid for all or part of the qualified higher education expenses
of the account beneficiary, to the extent that the withdrawal
or distribution does not exceed the amount of the scholarship;
(4) by a college choice 529 education savings plan as the result of a transfer of funds by a college choice 529 education savings plan from one (1) third party custodian to another.
A qualified withdrawal does not include a rollover distribution or transfer of assets from a college choice 529 education savings plan to any other qualified tuition program under Section 529 of the Internal Revenue Code that is not a college choice 529 education savings plan.
(b) (h) As used in this section, "taxpayer" means:
(1) an individual filing a single return; or
(2) a married couple filing a joint return.
(c) (i) A taxpayer is entitled to a credit against the taxpayer's
adjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7 for a
taxable year equal to the least of the following:
(1) Twenty percent (20%) of the amount of
each contribution the
total contributions made by the taxpayer to an account or
accounts of a college choice 529 education savings plan during
the taxable year.
(2) One thousand dollars ($1,000).
(3) The amount of the taxpayer's adjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7 for the taxable year, reduced by the sum of all credits (as determined without regard to this section) allowed by IC 6-3-1 through IC 6-3-7.
(d) (j) A taxpayer is not entitled to a carryback, carryover, or refund
of an unused credit.
(e) (k) A taxpayer may not sell, assign, convey, or otherwise transfer
the tax credit provided by this section.
(f) (l) To receive the credit provided by this section, a taxpayer must
claim the credit on the taxpayer's annual state tax return or returns in
the manner prescribed by the department. The taxpayer shall submit to
the department all information that the department determines is
necessary for the calculation of the credit provided by this section.
(m) An account owner of an account of a college choice 529 education savings plan must repay all or a part of the credit in a taxable year in which any non-qualified withdrawal is made from the account. The amount the taxpayer must repay is equal to the lesser of:
(1) twenty percent (20%) of the total amount of non-qualified withdrawals made during the taxable year from the account; or
(2) the excess of:
(A) the cumulative amount of all credits provided by this section that were claimed by any taxpayer with respect to
the taxpayer's contributions to the account for all prior
taxable years beginning on or after January 1, 2007; over
(B) the cumulative amount of repayments paid by the account owner under this subsection for all prior taxable years beginning on or after January 1, 2008.
(n) Any required repayment under subsection (m) shall be reported by the account owner on the account owner's annual state income tax return for any taxable year in which a non-qualified withdrawal is made.
(o) The executive director of the Indiana education savings authority shall submit or cause to be submitted to the department a copy of all information returns or statements issued to account owners, account beneficiaries, and other taxpayers for each taxable year with respect to:
(1) non-qualified withdrawals made from accounts of a college choice 529 education savings plan for the taxable year; or
(2) account closings for the taxable year.".
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