Ind. Code ch. 6-3.1-40

Ind. Code ch. 6-3.1-40
in effect

Ind. Code § 6-3.1-40-1 Applicability

Sec. 1. This chapter applies to taxable years beginning after December 31, 2023. As added by P.L.203-2023, SEC.3.

Ind. Code § 6-3.1-40-2 "Physician"

Sec. 2. As used in this chapter, "physician" means an individual who is licensed to practice medicine in Indiana under IC 25-22.5. As added by P.L.203-2023, SEC.3.

Ind. Code § 6-3.1-40-4 "State income tax liability"

Sec. 4. As used in this chapter, "state income tax liability" means the taxpayer's total tax liability that is incurred under IC 6-3-1 through IC 6-3-7 (the adjusted gross income 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.3.

Ind. Code § 6-3.1-40-5 "Taxpayer"

Sec. 5. As used in this chapter, "taxpayer" means an individual who: (1) is a physician engaged in the practice of medicine; (2) has an ownership interest in a corporation, limited liability company, partnership, or other legal entity organized to provide health care services as a physician owned entity; (3) is not employed by a health system (as defined in IC 16-18-2-168.5); and (4) has any state income tax liability. As added by P.L.203-2023, SEC.3. Amended by P.L.230-2025, SEC.73.

Ind. Code § 6-3.1-40-6 Credit; eligibility; amount

Sec. 6. If a taxpayer: (1) has an ownership interest in a physician owned medical practice described in section 5(2) of this chapter that: (A) is established as a legal entity under Indiana law after December 31, 2023; (B) opens and begins to provide health care services to patients in a particular calendar year beginning after December 31, 2023; and (C) has billed for health care services for at least six (6) months of a calendar year; (2) has an ownership interest in the income of the physician owned medical practice that is at least: (A) for a physician owned medical practice with not more than ten (10) owners, five percent (5%) of the physician owned medical practice's income; and (B) for a physician owned medical practice with more than ten (10) owners, fifty percent (50%) of the physician owned medical practice's income divided by the number of physicians who own an interest in the physician owned medical practice; and (3) provided health care services in the physician owned medical practice for at least six (6) months of a calendar year; the taxpayer may, subject to sections 7 and 9.5 of this chapter, claim a credit against the taxpayer's state income tax liability. Subject to sections 8 and 11 of this chapter, the amount of the credit allowed under this chapter for a taxpayer in the particular calendar year is twenty thousand dollars ($20,000). As added by P.L.203-2023, SEC.3. Amended by P.L.230-2025, SEC.74.

Ind. Code § 6-3.1-40-7 Allowable years of credit

Sec. 7. A taxpayer may claim a tax credit under this chapter for a taxable year described in section 6 of this chapter and the two (2) immediately following taxable years. As added by P.L.203-2023, SEC.3. Amended by P.L.230-2025, SEC.75.

Ind. Code § 6-3.1-40-8 Credit carryover; carryback or refund of unused credit; assignment prohibited

Sec. 8. (a) If the amount of the credit allowed under section 6 of this chapter for a taxpayer in a taxable year exceeds the taxpayer's state income tax liability for that taxable year, the taxpayer may carry the excess credit over for a period not to exceed the taxpayer's following ten (10) taxable years. The amount of the credit carryover from a taxable year must be reduced to the extent that the carryover is used by the taxpayer to obtain a credit under this chapter for any subsequent taxable year. A taxpayer is not entitled to a carryback or a refund of any unused credit amount. (b) A taxpayer may not assign any part of a credit to which the taxpayer is entitled under this chapter. As added by P.L.203-2023, SEC.3.

Ind. Code § 6-3.1-40-9.5 Claiming credit on tax return; certified list of physicians; proof of department's approval; limitation

Sec. 9.5. (a) To receive a credit under this chapter: (1) the physician owned medical practice must apply for the department's approval of the tax credit for its owners for a calendar year in the manner prescribed by the department after June 30 of that calendar year, but not later than June 30 of the subsequent calendar year; (2) the physician owned medical practice must submit with the application a certified list of each of the physicians who has an ownership interest in the legal entity described in section 6 of this chapter and any additional information that the department determines is necessary for the calculation of the credit under this chapter; (3) the taxpayer must attach proof of the department's approval of the tax credit to the taxpayer's state tax return or returns; and (4) the taxpayer must claim the approved tax credit on the taxpayer's state tax return or returns in the manner prescribed by the department. (b) The department shall record the time of filing of each application for the department's approval of a tax credit and shall, except as provided in subsection (c), approve granting the credit to the taxpayer, if the taxpayer otherwise qualifies for a credit under this chapter, in the chronological order in which the application for the department's approval is filed in the year. (c) If the total credits approved under this section equal the maximum amount allowable in the year, the department may not approve an application for the credit filed later in that year. As added by P.L.230-2025, SEC.77.

Ind. Code § 6-3.1-40-10 Assessments

Sec. 10. (a) If the department determines within five (5) years of a taxpayer's receipt of a tax credit under this chapter that the taxpayer: (1) has sold, transferred, granted, or otherwise relinquished the taxpayer's ownership interest in an entity described in section 5(2) of this chapter; and (2) is employed by a health system or another non-physician owned medical practice; the department shall impose an assessment upon the taxpayer equal to the amount of tax credits provided to the taxpayer under this chapter. (b) The department shall deposit assessments collected under this section in the state general fund. As added by P.L.203-2023, SEC.3.

Ind. Code § 6-3.1-40-11 Maximum amount of credits allowed; exception

Sec. 11. (a) Subject to subsection (b), the total amount of tax credits awarded under this chapter may not exceed ten million dollars ($10,000,000) in the state fiscal year beginning July 1, 2025, and ending June 30, 2026, and in each state fiscal year thereafter. (b) For a taxable year beginning after December 31, 2024, and before January 1, 2026, only that part of a taxpayer's tax credit that is attributable to the period of time beginning after June 30, 2025, and before January 1, 2026, is subject to the maximum amount provided in subsection (a). As added by P.L.230-2025, SEC.78.

Ind. Code § 6-3.1-40-12 Department website; information required to be provided to public

Sec. 12. The department, on a website used by the department to provide information to the public, shall provide the following information: (1) The application for the credit provided in this chapter. (2) A timeline for receiving the credit provided in this chapter. (3) The total amount of credits awarded under this chapter during the current state fiscal year. As added by P.L.230-2025, SEC.79.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/6Fetched: 10/17/2026

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