"Adjusted gross income" defined
Sec. 3.5. When used in this article, the term "adjusted gross
income" shall mean the following:
(a) In the case of all individuals, "adjusted gross income" (as
defined in Section 62 of the Internal Revenue Code), modified as
follows:
(1) Subtract income that is exempt from taxation under this
article by the Constitution and statutes of the United States.
(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) 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) Subtract one thousand dollars ($1,000) for:
(A) each of the exemptions provided by Section 151(c) of
the Internal Revenue Code;
(B) each additional amount allowable under Section 63(f) of
the Internal Revenue Code; and
(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) Subtract:
(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 for taxable years beginning after
December 31, 1996; and
(B) 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) Subtract an amount equal to the lesser of:
(A) that part of the individual's adjusted gross income (as
defined in Section 62 of the Internal Revenue Code) for that
taxable year that is subject to a tax that is imposed by a
political subdivision of another state and that is imposed on
or measured by income; or
(B) two thousand dollars ($2,000).
(7) Add an amount equal to the total capital gain portion of a
lump sum distribution (as defined in Section 402(e)(4)(D) of the
Internal Revenue Code) if the lump sum distribution is received
by the individual during the taxable year and if the capital gain
portion of the distribution is taxed in the manner provided in
Section 402 of the Internal Revenue Code.
(8) 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.
(9) 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).
(10) Add an amount equal to the deduction allowed under
Section 221 of the Internal Revenue Code for married couples
filing joint returns if the taxable year began before January 1,
1987.
(11) Add an amount equal to the interest excluded from federal
gross income by the individual for the taxable year under
Section 128 of the Internal Revenue Code if the taxable year
began before January 1, 1985.
(12) 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.
(13) 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), (5), and (6) 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.
(14) 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.
(15) 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.
(16) For taxable years beginning after December 31, 1999,
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.
(17) Subtract an amount equal to the lesser of:
(A) for a taxable year:
(i) including any part of 2004, the amount determined
under subsection (f); and
(ii) beginning after December 31, 2004, two thousand five
hundred dollars ($2,500); or
(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.
(18) Subtract an amount equal to the amount of a September 11
terrorist attack settlement payment included in the individual's
federal adjusted gross income.
(19) 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.
(20) Add an amount equal to any deduction allowed under
Section 172 of the Internal Revenue Code.
(21) 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).
(22) 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.
(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) Subtract income that is exempt from taxation under this
article by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction or deductions
allowed or allowable pursuant to Section 170 of the Internal
Revenue Code.
(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) Subtract an amount equal to the amount included in the
corporation's taxable income under Section 78 of the Internal
Revenue Code.
(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) Add an amount equal to any deduction allowed under
Section 172 of the Internal Revenue Code.
(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) 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.
(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) Subtract income that is exempt from taxation under this
article by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction allowed or allowable
under Section 170 of the Internal Revenue Code.
(3) Add an amount equal to a deduction allowed or allowable
under Section 805 or Section 831(c) of the Internal Revenue
Code for taxes based on or measured by income and levied at
the state level by any state.
(4) Subtract an amount equal to the amount included in the
company's taxable income under Section 78 of the Internal
Revenue Code.
(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) Add an amount equal to any deduction allowed under
Section 172 or Section 810 of the Internal Revenue Code.
(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) 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.
(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) Subtract income that is exempt from taxation under this
article by the Constitution and statutes of the United States.
(2) Add an amount equal to any deduction allowed or allowable
under Section 170 of the Internal Revenue Code.
(3) Add an amount equal to a deduction allowed or allowable
under Section 805 or Section 831(c) of the Internal Revenue
Code for taxes based on or measured by income and levied at
the state level by any state.
(4) Subtract an amount equal to the amount included in the
company's taxable income under Section 78 of the Internal
Revenue Code.
(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) Add an amount equal to any deduction allowed under
Section 172 of the Internal Revenue Code.
(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) 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.
(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) Subtract income that is exempt from taxation under this
article by the Constitution and statutes of the United States.
(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) 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) Add an amount equal to any deduction allowed under
Section 172 of the Internal Revenue Code.
(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) 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.
(f) This subsection applies only to the extent that an individual
paid property taxes in 2004 that were imposed for the March 1, 2002,
assessment date or the January 15, 2003, assessment date. The
maximum amount of the deduction under subsection (a)(17) is equal
to the amount determined under STEP FIVE of the following
formula:
STEP ONE: Determine the amount of property taxes that the
taxpayer paid after December 31, 2003, in the taxable year for
property taxes imposed for the March 1, 2002, assessment date
and the January 15, 2003, assessment date.
STEP TWO: Determine the amount of property taxes that the
taxpayer paid in the taxable year for the March 1, 2003,
assessment date and the January 15, 2004, assessment date.
STEP THREE: Determine the result of the STEP ONE amount
divided by the STEP TWO amount.
STEP FOUR: Multiply the STEP THREE amount by two
thousand five hundred dollars ($2,500).
STEP FIVE: Determine the sum of the STEP FOUR amount
and two thousand five hundred dollars ($2,500).
(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.
Last modified: May 28, 2006