Bill would let eligible Indiana taxpayers claim a refundable care tax credit

If enacted, the bill would let eligible taxpayers claim a refundable credit against their Indiana income taxes. A taxpayer must have qualifying care expenses and income, or combined income on a joint return, no higher than 250% of the federal poverty level. Care expenses must pay for a qualifying individual's care and help the taxpayer or spouse work; overnight camp services outside the taxpayer's household and care services outside the household that do not follow state or local laws do not count. The credit is 20% of eligible expenses, capped at an amount from $200 to $1,000 based on income. If spouses live in the same home, they may claim it only once. Any credit above the taxpayer's state income tax due would be refunded. The credit would apply only to taxable years beginning after December 31, 2025; the bill states a retroactive effective date of January 1, 2026.