Eligible Indiana home buyers could claim a tax credit for savings deposits

A qualifying resident could set up a home savings account with a participating financial institution. The resident must not have owned or bought a single-family home in the three years before buying. The Indiana home must be one they own and live in as their main home. Financial institutions could choose whether to offer accounts. Each person could hold only one account. The account rules would take effect July 1, 2026.

Indiana would exempt account money and earnings from state tax, and qualifying withdrawals from state income tax. The account must belong to an Indiana resident who has not owned or bought a single-family home in the three years before buying. A withdrawal must pay a down payment or allowed closing costs for an Indiana home the account holder owns and lives in as their main home. These account tax rules would take effect July 1, 2026.

An account holder could claim a state income tax credit for deposits to their home savings account. The account holder must be an Indiana resident who has not owned or bought a single-family home in the three years before buying. Someone else who deposits money could not claim the credit. The credit would equal 20% of the account holder’s own deposits, up to $5,000. Unused credit could not be refunded or used in an earlier or later year. Withdrawing money that received a credit for other costs would require repayment of all or part of that credit unless the money went into another such account. The credit would apply to tax years beginning on or after January 1, 2027.