Citations Affected: IC 6-3.1-31.
Synopsis: Adult education tax credit. Establishes an adult education
tax credit. Allows employers to receive a tax credit of up to $300 per
employee and up to $5,000 per year for payment of an employee's
expenses related to an adult education program.
Effective: January 1, 2008.
January 8, 2007, read first time and referred to Committee on Tax and Fiscal Policy.
A BILL FOR AN ACT to amend the Indiana Code concerning
(b) The term does not include expenses for meals, lodging, or transportation.
Sec. 4. As used in this chapter, "employee" means an individual who:
(1) is an employee of an employer; and
(2) has the employee's principal place of business with the employer in Indiana.
Sec. 5. As used in this chapter, "employer" means a corporation, person, or pass through entity that employs at least one (1) employee.
Sec. 6. As used in this chapter, "pass through entity" means a:
(1) corporation that is exempt from the adjusted gross income tax under IC 6-3-2-2.8(2);
(4) limited liability company; or
(5) limited liability partnership.
Sec. 7. As used in this chapter, "state tax liability" means a 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 6-5.5 (the financial institutions tax); and
(3) IC 27-1-18-2 (the insurance premiums 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.
Sec. 8. As used in this chapter, "vocational education" means any postsecondary vocational, agricultural, occupational, manpower, employment, or technical training or retraining of less than a baccalaureate level that enhances an individual's career potential.
Sec. 9. (a) An employer that pays for eligible education expenses of an eligible employee is eligible for a credit in a taxable year against the employer's state tax liability in the taxable year.
(b) Except as provided in subsections (c) and (d), the amount of the credit is equal to twenty-five percent (25%) of the sum of the employer's payments for an employee's eligible education expenses in a taxable year.
(c) The amount of the credit claimed by an employer in a taxable year may not exceed five thousand dollars ($5,000).
(d) The amount of the credit attributable to each employee who incurs eligible education expenses may not exceed three hundred
Sec. 10. (a) If:
(1) a pass through entity does not have state income tax liability against which the credit provided by this chapter may be applied; and
(2) the pass through entity would be eligible for a credit under this chapter if the pass through entity were a taxpayer;
a shareholder, partner, or member of the pass through entity is entitled to a credit under this chapter.
(b) Subject to this chapter, the amount of the credit to which a shareholder, partner, or member is entitled is equal to:
(1) the credit determined for the pass through entity for the taxable year as if the pass through entity were a taxpayer with state tax liability in the amount of the credit; multiplied by
(2) the percentage of the pass through entity's distributive income to which the shareholder or partner is entitled.
Sec. 11. (a) If the amount of the credit provided under 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 over to subsequent taxable years. The credit provided by this chapter may be carried forward and applied to succeeding taxable years for not more than five (5) taxable years following the unused credit year. 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.
(b) A taxpayer is not entitled to a carryback or refund of any unused credit.
Sec. 12. (a) A taxpayer desiring to obtain a credit under this chapter must apply to the department of workforce development for a certification that the taxpayer's payments for eligible education expenses related to an adult education program qualify for a credit under this chapter.
(b) If the department of workforce development determines that the payments are eligible for a credit under this chapter, the department shall certify the taxpayer's payments.
Sec. 13. To receive the credit provided by this chapter, a taxpayer must:
(1) claim the credit on the taxpayer's state tax return or returns in the manner prescribed by the department of state revenue;
(2) submit to the department of state revenue, along with the
taxpayer's state tax return or returns, a copy of the certificate
issued by the department of workforce development to the
taxpayer under section 12(b) of this chapter;
(3) submit proof to the department of state revenue that the employees who incurred the eligible education expenses for which the credit is claimed:
(A) remained employed by the employer for at least thirteen (13) consecutive weeks; and
(B) worked a minimum of four hundred fifty-five (455) hours;
after incurring the expenses; and
(4) submit all other information that the department of state revenue determines is necessary for the calculation of the credit provided by this chapter.