Ind. Code ch. 6-3.1-39.5

Ind. Code ch. 6-3.1-39.5
in effect

Ind. Code § 6-3.1-39.5-1 "Indiana qualified child care facility"

Sec. 1. As used in this chapter, "Indiana qualified child care facility" means a facility that is: (1) a qualified child care facility (as defined in Section 45F of the Internal Revenue Code); (2) located in Indiana; and (3) licensed by the division of family resources under IC 12-17.2. As added by P.L.201-2023, SEC.103. Amended by P.L.58-2026, SEC.1.

Ind. Code § 6-3.1-39.5-2 "Pass through entity"

Sec. 2. As used in this chapter, "pass through entity" means: (1) a corporation that is exempt from the adjusted gross income tax under IC 6-3-2-2.8(2); (2) a partnership; (3) a trust; (4) an estate; (5) a limited liability company; or (6) a limited liability partnership. As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-3 "Qualified child care expenditure"

Sec. 3. As used in this chapter, "qualified child care expenditure" means an expenditure: (1) for the acquisition, construction, rehabilitation, or expansion of property used as part of an Indiana qualified child care facility of a taxpayer that is operated for the taxpayer's employees; (2) incurred under a contract between a taxpayer and an Indiana qualified child care facility to provide for the operating costs, acquisition, construction, rehabilitation, or expansion of property used as part of the Indiana qualified child care facility; (3) for purposes of complying with the qualified child care facility licensure requirements under IC 12-17.2, as part of the taxpayer acquiring or constructing an Indiana qualified child care facility; (4) incurred for the operating costs of an Indiana qualified child care facility of a taxpayer that is operated for the taxpayer's employees, including costs related to training of employees, to scholarship programs, and to provide increased compensation to employees with higher levels of child care training; (5) under a contract with an Indiana qualified child care facility to provide child care services to employees of the taxpayer, or under a contract with an intermediate entity that contracts with one (1) or more Indiana qualified child care facilities for child care services; or (6) under a contract to provide child care resources and referral services to an employee of the taxpayer. As added by P.L.201-2023, SEC.103. Amended by P.L.58-2026, SEC.2.

Ind. Code § 6-3.1-39.5-4 "Qualified expenditure"

Sec. 4. As used in this chapter, "qualified expenditure" means a qualified child care expenditure. As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-6 "State tax liability"

Sec. 6. As used in this chapter, "state tax liability" means the 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 27-1-18-2 (the insurance premiums tax) or IC 6-8-15 (the nonprofit agricultural organization health coverage tax); and (3) IC 6-5.5 (the financial institutions 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.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-7 "Taxpayer"

Sec. 7. As used in this chapter, "taxpayer" means any person, corporation, limited liability company, partnership, or other entity that has any state tax liability and employs five hundred (500) individuals or less. The term includes a pass through entity. However, the term does not include a taxpayer who is in the business of operating a child care facility prior to making qualified expenditures. As added by P.L.201-2023, SEC.103. Amended by P.L.58-2026, SEC.4.

Ind. Code § 6-3.1-39.5-8 Entitlement to credit; amount of credit

Sec. 8. (a) A taxpayer that makes a qualified expenditure in a taxable year is entitled to a credit against the taxpayer's state tax liability for the taxable year. (b) Subject to section 9 of this chapter, the maximum amount of the credit to which a taxpayer is entitled in a particular taxable year is equal to the lesser of: (1) fifty percent (50%) of the employer's qualified expenditures in the taxable year; or (2) one hundred thousand dollars ($100,000). As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-9 Shareholder, partner, beneficiary, or member entitled to credit

Sec. 9. If a pass through entity is entitled to a credit under this chapter but does not have state tax liability against which the tax credit may be applied, an individual who is a shareholder, partner, beneficiary, 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, beneficiary, or member is entitled. The credit provided under this section is in addition to a tax credit to which a shareholder, partner, beneficiary, or member of a pass through entity is entitled. However, a pass through entity and an individual who is a shareholder, partner, beneficiary, or member of a pass through entity may not claim more than one (1) credit. As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-10 Carry forward of credit

Sec. 10. (a) If the amount of the credit determined under section 8(b) of this chapter for a taxpayer in a taxable year exceeds the taxpayer's state tax liability for that taxable year, the taxpayer may carry the excess credit over for a period not to exceed the eligible taxpayer's following three (3) taxable years. The amount of the credit carryover from a taxable year shall 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.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-11 Claiming a credit

Sec. 11. To obtain a credit under this chapter, a taxpayer must claim the credit on the taxpayer's annual state tax return in the manner prescribed by the department. The taxpayer shall submit to the department all information that the department determines is necessary to calculate the credit provided by this chapter. As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-13 Liability

Sec. 13. A taxpayer that claims a credit under this chapter is not liable for any act or omission occurring at an Indiana qualified child care facility that contracts with the taxpayer to provide child care services to employees of the taxpayer if the Indiana qualified child care facility is not owned or operated by the taxpayer. As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-14 Maximum aggregate amount of credits

Sec. 14. (a) The maximum aggregate amount of tax credits allowed under this chapter may not exceed two million five hundred thousand dollars ($2,500,000) in each state fiscal year. (b) The department shall record the time of filing of each return claiming a tax credit under this chapter and shall approve the tax credits, if they otherwise qualify for a tax credit under this chapter, in the chronological order in which the returns are filed in the state fiscal year. As added by P.L.201-2023, SEC.103.

Ind. Code § 6-3.1-39.5-15 Expiration

Sec. 15. This chapter expires July 1, 2027. As added by P.L.201-2023, SEC.103. Amended by P.L.140-2025, SEC.1.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/6Fetched: 10/17/2026