Tax Credit Legislation

Update: 1/25/23

The legislative committee, chaired by Cyrilla Helm, Executive Director, Foundation of Monroe County Schools, and Jane Nichols, Executive Director, Vigo County Schools Education Foundation, is excited to report that three tax credit bills have been introduced in the 2023 Legislative Session have been assigned to a committee.  In the Senate, both bills, SB 257 & SB 260 have been assigned to the Tax and Fiscal policy and in the House, HB 1019 has been assigned to Ways and Means.  Please find below, summaries of each bill:

SB 257 (Senator Yoder): Provides a 50% state tax credit for contributions made to a public school foundation for taxable years beginning after December 31, 2023, and before January 1, 2026. Provides that the amount allowable as a credit in a taxable year may not exceed: (1) $1,000 in the case of an individual filing a single return or a corporation; or (2) $2,000 in the case of a married couple filing a joint return. Provides that the maximum amount of credits that may be awarded in a state fiscal year may not exceed $5,000,000. 

SB 260 (Senators Buchanan and Busch): State tax credit for public school foundation. Provides a 25% state tax credit for contributions made to a public school foundation for taxable years beginning after December 31, 2023, and before January 1, 2026. Provides that the amount allowable as a credit in a taxable year may not exceed: (1) $1,000 in the case of an individual filing a single return or a corporation; or (2) $2,000 in the case of a married couple filing a joint return. Provides that the maximum amount of credits that may be awarded in a state fiscal year may not exceed $5,000,000.

HB1019 (Representatives Hamilton and Cherry): Education foundation tax credit. Provides for an adjusted gross income tax credit for donations to a public school foundation. Provides that the maximum individual taxpayer credit is $1,000 in the case of a single return or $2,000 in the case of a joint return. Provides that the maximum corporate taxpayer credit is greater of 10% of the corporation's total adjusted gross income tax liability or $5,000.

Members – It is time to start writing to the committee chairs with our support of the bills and request a hearing.  Hopefully, some encouragement will help the bills get a hearing.  You may remember, the Senate approved this in the 2021 session year, but the bill failed to receive a hearing in the house and the bill died.  This legislation will greatly impact K-12 Education; it impacts student learning while helping grow the footprint of education foundations in Indiana.  

This letter was sent from INAPEF to all lawmakers and can be edited to fit your needs. This can also be found in the online Member Resource Library under Advocacy.  Also attached for your convenience, is a copy of the legislative committee’s presentation about the history of INAPEF’s tax credit efforts, which was presented by the committee at the INAPEF Annual Conference in November.  

In addition to sending your own letters, please encourage your board members, teachers, friends, and family to send letters and/or emails.  If you are concerned from a legal standpoint, regarding advocating on behalf of your charitable foundation, the IRS states: In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying).  A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.

Please also encourage your superintendent to make phone calls to your local representatives!

DO NO HESITATE - ACT TODAY!  We do not want this bill to die in committee!  The legislative committee truly believes this year is the best chance we have had, to get this proposed legislation turned into a law! 

Lawmaker Email Addresses:

Senate bills 257 and 260 (the same BUT 257 asks for 50% tax credit) assigned to Tax and Fiscal Policy

Chair Sen Travis Holdman Senator.Holdman@iga.in.gov

260 Author Sen Buchanan Senator.Buchanan@iga.in.gov

260 Author Sen Busch. Senator.Busch@iga.in.gov

257 Author Sen Yoder shelli.yoder@iga.in.gov 

House bill 1019 assigned to Ways and Means

Chair Rep. Thompsonjeffthompson28@gmail.com

Author Rep. Cherry – rcherry99@gmail.com

Author Rep Hamilton -  careyhamilton@yahoo.com

Letter to Indiana Lawmakers

Update: 11/1/22

INAPEF has been pursuing legislation that allows tax credits for public education foundations.  Our legislative committee is hard at work meeting with state lawmakers to have the bill authored and ensure it receives a hearing in 2023.  In October, a letter was sent to all 150 Indiana lawmakers detailing why a tax credit is needed and how it will impact our schools.


Tax Credits Explained

What is a Tax Credit?

According to the IRS website, "tax credits provide a dollar-for-dollar reduction of your income tax liability." This means that a $1,000 tax credit saves you $1,000 in taxes.

On the other hand, tax deductions lower your taxable income and they are equal to the percentage of your marginal tax bracket. For instance, if you are in the 25% tax bracket, a $1,000 deduction saves you $250 in tax.

Tax Credits vs Tax Deductions

Tax credits is differ from tax deductions. A tax credit is always worth more than an dollar-equivalent tax deduction, because deductions are calculated using percentages. Referring to the numbers above, you can see that a $1,000 credit offers $750 more in savings than a $1,000 deduction."

How Tax Credits Benefit your Foundation

Being able to offer tax credits could increase the donation amounts you receive and bring in new donors who are interested in lowering their income tax liability. There are donors who specifically seek tax credit opportunities because of the additional savings that they provide.

Krista@inapef.org  |  317.661.1482
PO Box 862, Brownsburg IN 46112

Indiana Association of Public Education Foundations is a 501(c)6 non-profit organization. 

Powered by Wild Apricot Membership Software