Ind. Code § 6-3-1-3.5 – "Adjusted gross income"

Note: This version of section amended by P.L.239-2017, SEC.11. See also following version of this section amended by P.L.268-2017, SEC.40.

(a) In the case of all individuals, "adjusted gross income" (as defined in Section 62 of the Internal Revenue Code), modified as follows:
1. (1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
2. (2) Add an amount equal to any deduction or deductions allowed or allowable pursuant to Section 62 of the Internal Revenue Code for taxes based on or measured by income and levied at the state level by any state of the United States.
3. (3) Subtract one thousand dollars ($1,000), or in the case of a joint return filed by a husband and wife, subtract for each spouse one thousand dollars ($1,000).
4. (4) Subtract one thousand dollars ($1,000) for:
  1. (A) each of the exemptions provided by Section 151(c) of the Internal Revenue Code;
  2. (B) each additional amount allowable under Section 63(f) of the Internal Revenue Code; and
  3. (C) the spouse of the taxpayer if a separate return is made by the taxpayer and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer.
5. (5) Subtract:
  1. (A) one thousand five hundred dollars ($1,500) for each of the exemptions allowed under Section 151(c)(1)(B) of the Internal Revenue Code (as effective January 1, 2004);
  2. (B) for taxable years beginning after December 31, 2017, one thousand five hundred dollars ($1,500) for each exemption allowed under Section 151(c) of the Internal Revenue Code for an individual:
    1. (i) who is less than nineteen (19) years of age or is a full-time student who is less than twenty-four (24) years of age;
    2. (ii) for whom the taxpayer is the legal guardian; and
    3. (iii) for whom the taxpayer does not claim an exemption under clause (A); and
  3. (C) five hundred dollars ($500) for each additional amount allowable under Section 63(f)(1) of the Internal Revenue Code if the adjusted gross income of the taxpayer, or the taxpayer and the taxpayer's spouse in the case of a joint return, is less than forty thousand dollars ($40,000).
    This amount is in addition to the amount subtracted under subdivision (4).
6. (6) Subtract any amounts included in federal adjusted gross income under Section 111 of the Internal Revenue Code as a recovery of items previously deducted as an itemized deduction from adjusted gross income.
7. (7) Subtract any amounts included in federal adjusted gross income under the Internal Revenue Code which amounts were received by the individual as supplemental railroad retirement annuities under 45 U.S.C. 231 and which are not deductible under subdivision (1).
8. (8) Subtract an amount equal to the amount of federal Social Security and Railroad Retirement benefits included in a taxpayer's federal gross income by Section 86 of the Internal Revenue Code.
9. (9) In the case of a nonresident taxpayer or a resident taxpayer residing in Indiana for a period of less than the taxpayer's entire taxable year, the total amount of the deductions allowed pursuant to subdivisions (3), (4), and (5) shall be reduced to an amount which bears the same ratio to the total as the taxpayer's income taxable in Indiana bears to the taxpayer's total income.
10. (10) In the case of an individual who is a recipient of assistance under IC 12-10-6-1 , IC 12-10-6-2.1 , IC 12-15-2-2 , or IC 12-15-7 , subtract an amount equal to that portion of the individual's adjusted gross income with respect to which the individual is not allowed under federal law to retain an amount to pay state and local income taxes.
11. (11) In the case of an eligible individual, subtract the amount of a Holocaust victim's settlement payment included in the individual's federal adjusted gross income.
12. (12) Subtract an amount equal to the portion of any premiums paid during the taxable year by the taxpayer for a qualified long term care policy (as defined in IC 12-15-39.6-5 ) for the taxpayer or the taxpayer's spouse, or both.
13. (13) Subtract an amount equal to the lesser of:
  1. (A) two thousand five hundred dollars ($2,500); or
  2. (B) the amount of property taxes that are paid during the taxable year in Indiana by the individual on the individual's principal place of residence.
14. (14) Subtract an amount equal to the amount of a September 11 terrorist attack settlement payment included in the individual's federal adjusted gross income.
15. (15) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that owns property for which bonus depreciation was allowed in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election not been made under Section 168(k) of the Internal Revenue Code to apply bonus depreciation to the property in the year that it was placed in service.
16. (16) Add an amount equal to any deduction allowed under Section 172 of the Internal Revenue Code.
17. (17) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that placed Section 179 property (as defined in Section 179 of the Internal Revenue Code) in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year in which the property was placed in service to take deductions under Section 179 of the Internal Revenue Code in a total amount exceeding twenty-five thousand dollars ($25,000).
18. (18) Add an amount equal to the amount that a taxpayer claimed as a deduction for domestic production activities for the taxable year under Section 199 of the Internal Revenue Code for federal income tax purposes.
19. (19) Subtract an amount equal to the amount of the taxpayer's qualified military income that was not excluded from the taxpayer's gross income for federal income tax purposes under Section 112 of the Internal Revenue Code.
20. (20) Subtract income that is:
  1. (A) exempt from taxation under IC 6-3-2-21.7 ; and
  2. (B) included in the individual's federal adjusted gross income under the Internal Revenue Code.
21. (21) Add an amount equal to any income not included in gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code. Subtract the amount necessary from the adjusted gross income of any taxpayer that added an amount to adjusted gross income in a previous year to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code.
22. (22) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana, or a political subdivision of such a state, that is acquired by the taxpayer after December 31, 2011.
23. (23) Subtract an amount as described in Section 1341(a)(2) of the Internal Revenue Code to the extent, if any, that the amount was previously included in the taxpayer's adjusted gross income for a prior taxable year.
24. (24) Subtract any other amounts the taxpayer is entitled to deduct under IC 6-3-2 .
(b) In the case of corporations, the same as "taxable income" (as defined in Section 63 of the Internal Revenue Code) adjusted as follows:
1. (1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
2. (2) Add an amount equal to any deduction or deductions allowed or allowable pursuant to Section 170 of the Internal Revenue Code.
3. (3) Add an amount equal to any deduction or deductions allowed or allowable pursuant to Section 63 of the Internal Revenue Code for taxes based on or measured by income and levied at the state level by any state of the United States.
4. (4) Subtract an amount equal to the amount included in the corporation's taxable income under Section 78 of the Internal Revenue Code.
5. (5) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that owns property for which bonus depreciation was allowed in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election not been made under Section 168(k) of the Internal Revenue Code to apply bonus depreciation to the property in the year that it was placed in service.
6. (6) Add an amount equal to any deduction allowed under Section 172 of the Internal Revenue Code.
7. (7) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that placed Section 179 property (as defined in Section 179 of the Internal Revenue Code) in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year in which the property was placed in service to take deductions under Section 179 of the Internal Revenue Code in a total amount exceeding twenty-five thousand dollars ($25,000).
8. (8) Add an amount equal to the amount that a taxpayer claimed as a deduction for domestic production activities for the taxable year under Section 199 of the Internal Revenue Code for federal income tax purposes.
9. (9) Add to the extent required by IC 6-3-2-20 the amount of intangible expenses (as defined in IC 6-3-2-20 ) and any directly related interest expenses (as defined in IC 6-3-2-20 ) for the taxable year that reduced the corporation's taxable income (as defined in Section 63 of the Internal Revenue Code) for federal income tax purposes.
10. (10) Add an amount equal to any deduction for dividends paid (as defined in Section 561 of the Internal Revenue Code) to shareholders of a captive real estate investment trust (as defined in section 34.5 of this chapter).
11. (11) Subtract income that is:
  1. (A) exempt from taxation under IC 6-3-2-21.7 ; and
  2. (B) included in the corporation's taxable income under the Internal Revenue Code.
12. (12) Add an amount equal to any income not included in gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code. Subtract from the adjusted gross income of any taxpayer that added an amount to adjusted gross income in a previous year the amount necessary to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code.
13. (13) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana, or a political subdivision of such a state, that is acquired by the taxpayer after December 31, 2011.
14. (14) Add or subtract any other amounts the taxpayer is:
  1. (A) required to add or subtract; or
  2. (B) entitled to deduct;
    under IC 6-3-2 .
(c) In the case of life insurance companies (as defined in Section 816(a) of the Internal Revenue Code) that are organized under Indiana law, the same as "life insurance company taxable income" (as defined in Section 801 of the Internal Revenue Code), adjusted as follows:
1. (1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
2. (2) Add an amount equal to any deduction allowed or allowable under Section 170 of the Internal Revenue Code.
3. (3) Add an amount equal to a deduction allowed or allowable under Section 805 or Section 832(c) of the Internal Revenue Code for taxes based on or measured by income and levied at the state level by any state.
4. (4) Subtract an amount equal to the amount included in the company's taxable income under Section 78 of the Internal Revenue Code.
5. (5) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that owns property for which bonus depreciation was allowed in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election not been made under Section 168(k) of the Internal Revenue Code to apply bonus depreciation to the property in the year that it was placed in service.
6. (6) Add an amount equal to any deduction allowed under Section 172 or Section 810 of the Internal Revenue Code.
7. (7) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that placed Section 179 property (as defined in Section 179 of the Internal Revenue Code) in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year in which the property was placed in service to take deductions under Section 179 of the Internal Revenue Code in a total amount exceeding twenty-five thousand dollars ($25,000).
8. (8) Add an amount equal to the amount that a taxpayer claimed as a deduction for domestic production activities for the taxable year under Section 199 of the Internal Revenue Code for federal income tax purposes.
9. (9) Subtract income that is:
  1. (A) exempt from taxation under IC 6-3-2-21.7 ; and
  2. (B) included in the insurance company's taxable income under the Internal Revenue Code.
10. (10) Add an amount equal to any income not included in gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code. Subtract from the adjusted gross income of any taxpayer that added an amount to adjusted gross income in a previous year the amount necessary to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code.
11. (11) Add an amount equal to any exempt insurance income under Section 953(e) of the Internal Revenue Code that is active financing income under Subpart F of Subtitle A, Chapter 1, Subchapter N of the Internal Revenue Code.
12. (12) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana, or a political subdivision of such a state, that is acquired by the taxpayer after December 31, 2011.
13. (13) Add or subtract any other amounts the taxpayer is:
  1. (A) required to add or subtract; or
  2. (B) entitled to deduct;
    under IC 6-3-2 .
(d) In the case of insurance companies subject to tax under Section 831 of the Internal Revenue Code and organized under Indiana law, the same as "taxable income" (as defined in Section 832 of the Internal Revenue Code), adjusted as follows:
1. (1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
2. (2) Add an amount equal to any deduction allowed or allowable under Section 170 of the Internal Revenue Code.
3. (3) Add an amount equal to a deduction allowed or allowable under Section 805 or Section 832(c) of the Internal Revenue Code for taxes based on or measured by income and levied at the state level by any state.
4. (4) Subtract an amount equal to the amount included in the company's taxable income under Section 78 of the Internal Revenue Code.
5. (5) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that owns property for which bonus depreciation was allowed in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election not been made under Section 168(k) of the Internal Revenue Code to apply bonus depreciation to the property in the year that it was placed in service.
6. (6) Add an amount equal to any deduction allowed under Section 172 of the Internal Revenue Code.
7. (7) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that placed Section 179 property (as defined in Section 179 of the Internal Revenue Code) in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year in which the property was placed in service to take deductions under Section 179 of the Internal Revenue Code in a total amount exceeding twenty-five thousand dollars ($25,000).
8. (8) Add an amount equal to the amount that a taxpayer claimed as a deduction for domestic production activities for the taxable year under Section 199 of the Internal Revenue Code for federal income tax purposes.
9. (9) Subtract income that is:
  1. (A) exempt from taxation under IC 6-3-2-21.7 ; and
  2. (B) included in the insurance company's taxable income under the Internal Revenue Code.
10. (10) Add an amount equal to any income not included in gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code. Subtract from the adjusted gross income of any taxpayer that added an amount to adjusted gross income in a previous year the amount necessary to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code.
11. (11) Add an amount equal to any exempt insurance income under Section 953(e) of the Internal Revenue Code that is active financing income under Subpart F of Subtitle A, Chapter 1, Subchapter N of the Internal Revenue Code.
12. (12) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana, or a political subdivision of such a state, that is acquired by the taxpayer after December 31, 2011.
13. (13) Add or subtract any other amounts the taxpayer is:
  1. (A) required to add or subtract; or
  2. (B) entitled to deduct;
    under IC 6-3-2 .
(e) In the case of trusts and estates, "taxable income" (as defined for trusts and estates in Section 641(b) of the Internal Revenue Code) adjusted as follows:
1. (1) Subtract income that is exempt from taxation under this article by the Constitution and statutes of the United States.
2. (2) Subtract an amount equal to the amount of a September 11 terrorist attack settlement payment included in the federal adjusted gross income of the estate of a victim of the September 11 terrorist attack or a trust to the extent the trust benefits a victim of the September 11 terrorist attack.
3. (3) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that owns property for which bonus depreciation was allowed in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election not been made under Section 168(k) of the Internal Revenue Code to apply bonus depreciation to the property in the year that it was placed in service.
4. (4) Add an amount equal to any deduction allowed under Section 172 of the Internal Revenue Code.
5. (5) Add or subtract the amount necessary to make the adjusted gross income of any taxpayer that placed Section 179 property (as defined in Section 179 of the Internal Revenue Code) in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed had an election for federal income tax purposes not been made for the year in which the property was placed in service to take deductions under Section 179 of the Internal Revenue Code in a total amount exceeding twenty-five thousand dollars ($25,000).
6. (6) Add an amount equal to the amount that a taxpayer claimed as a deduction for domestic production activities for the taxable year under Section 199 of the Internal Revenue Code for federal income tax purposes.
7. (7) Subtract income that is:
  1. (A) exempt from taxation under IC 6-3-2-21.7 ; and
  2. (B) included in the taxpayer's taxable income under the Internal Revenue Code.
8. (8) Add an amount equal to any income not included in gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code. Subtract from the adjusted gross income of any taxpayer that added an amount to adjusted gross income in a previous year the amount necessary to offset the amount included in federal gross income as a result of the deferral of income arising from business indebtedness discharged in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in Section 108(i) of the Internal Revenue Code.
9. (9) Add the amount excluded from federal gross income under Section 103 of the Internal Revenue Code for interest received on an obligation of a state other than Indiana, or a political subdivision of such a state, that is acquired by the taxpayer after December 31, 2011.
10. (10) Add or subtract any other amounts the taxpayer is:
  1. (A) required to add or subtract; or
  2. (B) entitled to deduct;
    under IC 6-3-2 .
    Formerly: Acts 1971, P.L.64, SEC.1; Acts 1973, P.L.49, SEC.1. As amended by Acts 1977, P.L.77, SEC.1; Acts 1977(ss), P.L.4, SEC.8; Acts 1978, P.L.42, SEC.1; Acts 1978, P.L.43, SEC.1; Acts 1980, P.L.54, SEC.1; Acts 1981, P.L.82, SEC.1; Acts 1982, P.L.52, SEC.1; P.L.82-1983, SEC.1; P.L.49-1984, SEC.1; P.L.73-1985, SEC.1; P.L.2-1987, SEC.15; P.L.91-1987, SEC.2; P.L.383-1987(ss), SEC.3; P.L.88-1989, SEC.1; P.L.1-1990, SEC.75; P.L.2-1992, SEC.68; P.L.57-1997, SEC.2; P.L.119-1998, SEC.3; P.L.128-1999, SEC.1; P.L.238-1999, SEC.1; P.L.249-1999, SEC.1; P.L.257-1999, SEC.1; P.L.273-1999, SEC.51; P.L.14-2000, SEC.16; P.L.8-2002, SEC.3; P.L.192-2002(ss), SEC.67; P.L.105-2003, SEC.1; P.L.1-2004, SEC.49; P.L.81-2004, SEC.9; P.L.246-2005, SEC.69; P.L.184-2006, SEC.3; P.L.162-2006, SEC.24; P.L.1-2007, SEC.53; P.L.144-2007, SEC.3; P.L.211-2007, SEC.19; P.L.223-2007, SEC.1; P.L.131-2008, SEC.11; P.L.3-2008, SEC.60; P.L.1-2009, SEC.49; P.L.182-2009(ss), SEC.186; P.L.229-2011, SEC.83; P.L.171-2011, SEC.4; P.L.172-2011, SEC.53; P.L.6-2012, SEC.47; P.L.137-2012, SEC.52; P.L.205-2013, SEC.80; P.L.7-2015, SEC.7; P.L.250-2015, SEC.12; P.L.122-2016, SEC.4; P.L.181-2016, SEC.23; P.L.239-2017, SEC.11.

Sec. 3.5. When used in this article, the term "adjusted gross income" shall mean the following: