IndianaIndiana would cap college savings tax credits at $2,500
Starting with 2027 taxes, Indiana529 contributors could claim up to $2,500 in state tax credits, or $1,250 if married and filing separately.
What it does
For 2027 taxes, the credit for direct Indiana529 contributions would be capped at $2,500, or $1,250 for married people filing separately. It also could not exceed state income tax left after other credits.
Argument forPeople who contribute enough could pay less state income tax because they may claim a credit of up to $2,500.
Argument againstA $2,500 limit may offer little to people with small state income tax bills because the credit cannot exceed the tax they owe.
More detail
A taxpayer's credit would equal 20% of direct Indiana529 contributions, within the dollar limits and the taxpayer's remaining state income tax bill. It would apply to state taxpayers who put money directly into an Indiana529 account. The credit would be capped at $2,500, or $1,250 for married people filing separately, and could not exceed the state income tax left after other credits. Money transferred from another savings plan and bonus rewards would not count as contributions. The proposed limits would apply to tax years beginning on or after January 1, 2027.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jan 5First reading: referred to Committee on Ways and MeansLatest
- Jan 5Authored by Representative KlinkerIntroduced
Taxes & BudgetEducation