Bill > HB1256

This bill increases the tax credit for contributions to a college choice 529 education savings plan, which is a state-sponsored investment account designed to help families save for education expenses. Beginning in the 2026 tax year, the bill raises the maximum tax credit from $1,500 to $2,500 for individuals filing single or joint returns, and from $750 to $1,250 for married individuals filing separately. The credit is calculated as 20% of contributions made to the 529 plan that are designated for either higher education or K-12 education expenses within Indiana. Taxpayers can claim the credit on their annual state tax return, but cannot carry forward, transfer, or receive a refund for unused credits. The bill also maintains existing provisions that require repayment of the credit if non-qualified withdrawals are made from the account, and includes technical details about how contributions and designations are tracked by the Indiana Education Savings Authority. The changes to the tax credit are set to take effect on January 1, 2026, and the provision expires on January 1, 2028.

Budget and Finance

https://iga.in.gov/legislative/2025/bills/house/1256/details