Indiana would opt into federal school scholarship tax credit program

Indiana's education department would elect to join the federal school scholarship tax credit program and send a list of scholarship groups to federal officials. The list would cover Indiana nonprofits mainly focused on student scholarships that also meet federal program rules. The department would accept applications from scholarship groups year-round and publish its list online. This section would take effect upon passage, and the department would send its list by January 1 each year.

Taxpayers would list each recipient group, their total covered donations, and the state credit they claim on their annual Indiana tax return. This would apply to donations that meet federal rules and go to a scholarship group on Indiana's federal list for that tax year. State tax instructions would warn that the state credit may reduce the taxpayer's federal credit. This tax return provision would take effect January 1, 2027.

Indiana's workforce agency would work with the higher education commission to set up approval and appeal processes for training programs seeking federal Pell grants for job training. The process would cover training for skilled, well-paid, or in-demand work identified by the state. Schools and programs could apply for recognition and appeal grant denials. Eligible programs would provide completion, job placement, and graduate earnings data required by federal rules. State requirements could not be stricter than, or conflict with, federal rules. This section would take effect July 1, 2026.