Indiana

EARNED INCOME TAX CREDIT (EITC)

Rate (Fully-Refundable): 9% of the federal credit1

Eligibility Requirements: All Indiana taxpayers must have filed for the federal credit and are subject to slightly different income thresholds than the federal guidelines. See the 2015 IT-40 Individual Income Tax Booklet for more details.

Latest Legislative Action: During the 2016 legislative session, lawmakers considered a bill that would have increased the state EITC to 10% of the federal credit.

Notes:

  • Indiana’s EITC was created in 1999 but was not based on the federal credit. In 2003, Indiana switched to an EITC model that replicated the federal program at 6% of the federal credit. This rate was raised to 9% in 2009 as part of a property tax reform package.2
  • While the federal program was expanded under a 2010 federal tax relief act, Indiana took action to decouple its state eligibility guidelines from the federal system in 2011. As a result, those claiming Indiana’s EITC no longer benefitted from increased payouts for families with three or more children or the reduction of the “marriage penalty,” which started the income phase-out at a higher income level for married couples.3

CHILD TAX CREDIT (CTC)

Indiana does not currently offer a state-level CTC.

CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)

Indiana does not currently offer a state-level CDCTC.

Source:

  1. 2015 IT-40 Individual Income Tax Booklet, Indiana Department of Revenue
  2. HB 1001, 115th Indiana General Assembly
  3. HB 1001, 117th Indiana General Assembly

For More State Information

Jessica Fraser, Program Manager
Indiana Community Action Association

www.incap.org
(317) 638-4232
jfraser@incap.org