Introduced Version






HOUSE BILL No. 1316

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-3-2-22; IC 6-3.1-34.

Synopsis: Income tax credit for education expenses. Provides that the adjusted gross income tax deduction for unreimbursed expenditures made in connection with a dependent child's enrollment in a nonpublic school or accredited nonpublic school applies only to a taxable year beginning in 2011. For taxable years beginning after 2011, provides a refundable income tax credit for an unreimbursed education expenditure made by a taxpayer for an eligible dependent enrolled in a public school or an accredited nonpublic school if the taxpayer's household income is not more than 350% of the federal poverty level. Provides that the maximum credit amount is $1,000.

Effective: January 1, 2012 (retroactive).





Truitt




    January 11, 2012, read first time and referred to Committee on Ways and Means.







Introduced

Second Regular Session 117th General Assembly (2012)


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HOUSE BILL No. 1316



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 6-3-2-22; (12)IN1316.1.1. -->     SECTION 1. IC 6-3-2-22, AS AMENDED BY P.L.229-2011, SECTION 85, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012 (RETROACTIVE)]: Sec. 22. (a) The following definitions apply throughout this section:
        (1) "Dependent child" means an individual who:
            (A) is eligible to receive a free elementary or high school education in an Indiana school corporation;
            (B) qualifies as a dependent (as defined in Section 152 of the Internal Revenue Code) of the taxpayer; and
            (C) is the natural or adopted child of the taxpayer or, if custody of the child has been awarded in a court proceeding to someone other than the mother or father, the court appointed guardian or custodian of the child.
        If the parents of a child are divorced, the term refers to the parent who is eligible to take the exemption for the child under Section 151 of the Internal Revenue Code.
        (2) "Education expenditure" refers to any expenditures made in

connection with enrollment, attendance, or participation of the taxpayer's dependent child in a private elementary or high school education program. The term includes tuition, fees, computer software, textbooks, workbooks, curricula, school supplies (other than personal computers), and other written materials used primarily for academic instruction or for academic tutoring, or both.
        (3) "Private elementary or high school education program" means attendance at:
            (A) a nonpublic school (as defined in IC 20-18-2-12); or
            (B) an accredited nonpublic school;
        in Indiana that satisfies a child's obligation under IC 20-33-2 for compulsory attendance at a school. The term does not include the delivery of instructional service in a home setting to a dependent child who is enrolled in a school corporation or a charter school.
    (b) This section applies to a taxable years year beginning after December 31, 2010. in 2011.
    (c) A taxpayer who makes an unreimbursed education expenditure during the taxpayer's taxable year is entitled to a deduction against the taxpayer's adjusted gross income in the taxable year.
    (d) The amount of the deduction is:
        (1) one thousand dollars ($1,000); multiplied by
        (2) the number of the taxpayer's dependent children for whom the taxpayer made education expenditures in the taxable year.
A husband and wife are entitled to only one (1) deduction under this section.
    (e) To receive the deduction provided by this section, a taxpayer must claim the deduction on the taxpayer's annual state tax return or returns in the manner prescribed by the department.
     (f) This section expires December 31, 2012.

SOURCE: IC 6-3.1-34; (12)IN1316.1.2. -->     SECTION 2. IC 6-3.1-34 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2012 (RETROACTIVE)]:
    Chapter 34. Tax Credit for Elementary and Secondary Education Textbooks
    Sec. 1. As used in this chapter, "accredited nonpublic school" has the meaning set forth in IC 21-7-13-4.
    Sec. 2. For the purposes of this chapter, "education expenditure" refers to any expenditures made in connection with enrollment, attendance, or participation of the qualifying taxpayer's eligible dependent in a public school or an accredited nonpublic school. The term includes expenditures for tuition, fees,

computer software, textbooks, workbooks, curricula, school supplies (other than personal computers), and other written materials used primarily for academic instruction or for academic tutoring, or both.
    Sec. 3. For the purposes of this chapter, the "federal poverty level" that applies to a taxpayer is the figure that applies to a family consisting of the same number of persons as the family of the taxpayer under the applicable poverty guidelines issued each year by the United States Department of Health and Human Services and published in the Federal Register.
    Sec. 4. As used in this chapter, "eligible dependent" means a dependent who is enrolled in any grade from kindergarten through grade 12 in a public school or an accredited nonpublic school.
    Sec. 5. As used in this chapter, "public school" has the meaning set forth in IC 20-18-2-15.
    Sec. 6. As used in this chapter, "qualifying taxpayer" means a taxpayer with a household income that is not more than three hundred fifty percent (350%) of the federal poverty level.
    Sec. 7. (a) For taxable years beginning after December 31, 2011, a qualifying taxpayer who makes an unreimbursed education expenditure is entitled to a credit against the adjusted gross income tax imposed on the qualifying taxpayer by IC 6-3 for the taxable year during which the qualifying taxpayer makes the education expenditure.
    (b) The amount of the credit to which a qualifying taxpayer is entitled under this section is the lesser of:
        (1) one thousand dollars ($1,000); or
        (2) in the case of a qualifying taxpayer:
            (A) with a household income that is less than or equal to two hundred fifty percent (250%) of the federal poverty level, the full amount of the qualifying taxpayer's education expenditure;
            (B) with a household income that is:
                (i) greater than two hundred fifty percent (250%); and
                (ii) less than or equal to two hundred seventy percent (270%);
            of the federal poverty level, eighty percent (80%) of the qualifying taxpayer's education expenditure;
            (C) with a household income that is:
                (i) greater than two hundred seventy percent (270%); and
                (ii) less than or equal to two hundred ninety percent

(290%);
            of the federal poverty level, sixty percent (60%) of the qualifying taxpayer's education expenditure;
            (D) with a household income that is:
                (i) greater than two hundred ninety percent (290%); and
                (ii) less than or equal to three hundred ten percent (310%);
            of the federal poverty level, forty percent (40%) of the qualifying taxpayer's education expenditure; or
            (E) with a household income that is:
                (i) greater than three hundred ten percent (310%); and
                (ii) less than or equal to three hundred fifty percent (350%);
            of the federal poverty level, twenty percent (20%) of the qualifying taxpayer's education expenditure.
    Sec. 8. If the amount of the credit provided by this chapter to a qualifying taxpayer during a particular taxable year exceeds the sum of the taxes imposed on the qualifying taxpayer by IC 6-3 for the taxable year after the application of all credits that, under IC 6-3.1-1-2, are to be applied before the credit provided by this chapter, the excess shall be returned to the qualifying taxpayer as a refund.

     Sec. 9. (a) A qualifying taxpayer claiming a credit under this chapter must claim the credit on the qualifying taxpayer's annual state tax return or returns in the manner prescribed by the department.
    (b) The qualifying taxpayer shall submit to the department all information that the department determines is necessary for the calculation of the credit provided by this chapter and the determination of whether the credit is properly claimed.

    Sec. 10. The department shall adopt rules under IC 4-22-2 to carry out this chapter.

SOURCE: ; (12)IN1316.1.3. -->     SECTION 3. An emergency is declared for this act.