Ind. Code § 6-3.1-38-1 Applicability
Sec. 1. This chapter applies only to taxable years beginning after December 31, 2023.
As added by P.L.203-2023, SEC.2.
Ind. Code ch. 6-3.1-38
Ind. Code ch. 6-3.1-38
in effectInd. Code § 6-3.1-38-2 "Qualified taxpayer"
Sec. 2. As used in this chapter, "qualified taxpayer" means an employer that is a corporation, a limited liability company, a partnership, or another entity that:
(1) has any state tax liability; and
(2) has adopted a health reimbursement arrangement (as described in Section 9831(d) of the Internal Revenue Code) in lieu of a traditional employer provided health insurance plan.
As added by P.L.203-2023, SEC.2.
Ind. Code § 6-3.1-38-3 "State tax liability"
Sec. 3. As used in this chapter, "state tax liability" means a qualified taxpayer's total tax liability that is incurred under:
(1) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax);
(2) IC 6-5.5 (the financial institutions tax); and
(3) IC 27-1-18-2 (the insurance premiums tax) or IC 6-8-15 (the nonprofit agricultural organization health coverage tax);
as computed after the application of the credits that, under IC 6-3.1-1-2, are to be applied before the credit provided by this chapter.
As added by P.L.203-2023, SEC.2.
Ind. Code § 6-3.1-38-4 Credit for qualified taxpayer; credit amounts
Sec. 4. (a) Subject to subsection (c) and section 7 of this chapter, a qualified taxpayer may claim a credit against the qualified taxpayer's state tax liability for a qualified contribution for a qualified taxpayer with less than fifty (50) employees, if the amount provided toward the health reimbursement arrangement is equal to or greater than the level of benefits provided in the previous benefit year, or if the amount the employer contributes toward the health reimbursement arrangement equals the same amount contributed per covered individual toward the employer provided health insurance plan during the previous benefit year.
(b) The amount of the credit is the lesser of:
(1) the amount contributed by the employer toward the health reimbursement arrangement during the taxable year; or
(2) the following:
(A) For the taxable year in which the employer establishes the health reimbursement arrangement, four hundred dollars ($400).
(B) For the taxable year that immediately follows the taxable year in which the employer establishes the health reimbursement arrangement, two hundred dollars ($200).
(C) For a taxable year following a taxable year described in clause (B), zero dollars ($0).
(c) A qualified taxpayer may not claim a credit under this chapter for a health reimbursement arrangement established in a taxable year beginning before January 1, 2024.
As added by P.L.203-2023, SEC.2. Amended by P.L.157-2026, SEC.102.
Ind. Code § 6-3.1-38-4.5 Pass through entity; shareholder, partner, or member
Sec. 4.5. For a taxable year beginning after December 31, 2025, if a pass through entity is entitled to a credit under section 4 of this chapter but does not have state tax liability against which the tax credit may be applied, a shareholder, partner, or member of the pass through entity is entitled to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the taxable year; multiplied by
(2) the percentage of the pass through entity's distributive income to which the shareholder, partner, or member is entitled.
As added by P.L.157-2026, SEC.103.
Ind. Code § 6-3.1-38-5 Reporting requirements
Sec. 5. Qualified taxpayers that claim the credit under this chapter are required to report to the department of insurance every three (3) years following the allowance of a credit under this chapter in a manner prescribed by the department of insurance. The report must state whether or not the qualified taxpayer continued to offer the health reimbursement arrangement or reverted to a traditional employer sponsored plan. If the qualified taxpayer continued to offer the health reimbursement arrangement, the report must include information regarding the amount of the benefit.
As added by P.L.203-2023, SEC.2.
Ind. Code § 6-3.1-38-6 Claiming credit on tax return
Sec. 6. To receive the credit provided by this chapter, a qualified taxpayer must claim the credit on the qualified taxpayer's state tax return or returns in the manner prescribed by the department.
As added by P.L.203-2023, SEC.2.
Ind. Code § 6-3.1-38-7 Maximum amount of credit; approval of claims
Sec. 7. (a) The amount of tax credits granted under this chapter may not exceed ten million dollars ($10,000,000) in any calendar year.
(b) The department shall record the time of filing of each return claiming a credit under section 6 of this chapter and shall approve the claims if they otherwise qualify for a tax credit under this chapter, in the chronological order in which the claims are filed in the calendar year. The claim of a credit resulting from a pass through entity shall be considered to be filed when the pass through entity files a return for the taxable year.
(c) For purposes of calculating the amount of tax credits granted under this chapter in a calendar year, in the case of a taxpayer for whom some amount of the credit claimed must be carried over under section 8 of this chapter, the taxpayer is considered to have filed a claim for the full amount allowable to the taxpayer.
(d) The department may not approve a claim for a tax credit after the date on which the total credits approved under this section equal the maximum amount allowable in a particular calendar year.
As added by P.L.203-2023, SEC.2. Amended by P.L.157-2026, SEC.104.
Ind. Code § 6-3.1-38-8 Credit carryover; carryback or refund of unused credit
Sec. 8. (a) The amount of the credit provided by this chapter that a qualified taxpayer uses during a particular taxable year may not exceed the state tax liability of the qualified taxpayer.
(b) If the amount of a credit determined under this chapter for a particular qualified taxpayer and a particular taxable year exceeds the qualified taxpayer's state tax liability for that taxable year, then the qualified taxpayer may carry the excess over to the immediately succeeding taxable years. The credit carryover may not be used for any taxable year that begins more than ten (10) years after the date on which the donation from which the credit results is made. The amount of the credit carryover from a taxable year shall be reduced to the extent that the carryover is used by the qualified taxpayer to obtain a credit under this chapter for any subsequent taxable year.
(c) A qualified taxpayer is not entitled to a carryback or refund of any unused credit.
As added by P.L.203-2023, SEC.2.
Ind. Code § 6-3.1-38-9 Rules
Sec. 9. The department shall adopt rules under IC 4-22-2 to implement this chapter.
As added by P.L.203-2023, SEC.2.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/6Fetched: 10/17/2026