Bill > SB0263

This bill establishes a new refundable child and dependent care tax credit in Indiana, effective for taxable years beginning after December 31, 2025. The credit is available to taxpayers whose adjusted gross income (income after certain deductions) is no more than 250% of the federal poverty level, which is defined as the poverty income guidelines published by the U.S. Department of Health and Human Services. "Employment related expenses" are defined as costs paid for the care of a qualifying individual (as defined by federal law) that are necessary for the taxpayer or their spouse to be gainfully employed, excluding overnight camp stays or services not in compliance with state and local laws. The credit amount is calculated as the lesser of 20% of these employment-related expenses or a maximum amount that varies based on income level, ranging from $1,000 for those at or below 185% of the federal poverty level, down to $200 for those between 233% and 250% of the federal poverty level. If the credit exceeds the taxpayer's state income tax liability, the excess will be refunded.

Budget and Finance

https://iga.in.gov/legislative/2026/bills/senate/263/details