Bill > SB0395

This bill establishes a new refundable child and dependent care tax credit for Indiana taxpayers with an adjusted gross income (AGI) at or below 250% of the federal poverty level. The credit is designed to help offset employment-related expenses for care of qualifying individuals, such as children or dependents, that enable taxpayers to work. The credit amount varies based on income levels, ranging from $200 to $1,000, and is calculated as 20% of employment-related expenses. Specifically, taxpayers at lower income levels (up to 185% of the federal poverty level) can claim up to $1,000, with the maximum credit amount decreasing incrementally for those with AGI between 185% and 250% of the federal poverty level. The credit is fully refundable, meaning if the credit exceeds the taxpayer's state income tax liability, the excess will be refunded. The bill will take effect for taxable years beginning after December 31, 2024, and is set to expire on January 1, 2028, with the state department of revenue authorized to adopt rules and require specific application forms for claiming the credit.

Budget and Finance

https://iga.in.gov/legislative/2025/bills/senate/395/details