Indiana Education Credits and Deductions

For many, this time of year means a return to the classroom.  There are a few education-related items Indiana offers that may be of benefit to you.

  • Tax Credit for Donations to an Indiana college or university – For an individual filing a single return, the credit is the lesser of one-half of the amount contributed or $100.  For individuals filing a joint return, the credit is the lesser of one-half of the amount contributed or $200.  This contribution also qualifies as an itemized deduction on your federal return.
  • School Scholarship Tax Credit – Donating to a qualified scholarship granting organization (SGO) provides money for K-12 scholarships for Indiana children.  The credit is 50% of your donation applied against your state tax liability.  Although there is no individual donation limit, the entire tax credit program has a limit of $7.5 million per year.  This contribution also qualifies as an itemized deduction on your federal return.
  • CollegeChoice 529 Investment Plan Tax Credit – Contributing to a CollegeChoice 529 plan will get you a 20% state credit (up to $1,000).  Your contributions must be received by the plan by the end of the calendar year.
  • Education Expenses Deduction – This is a deduction based on education expenditures for each dependent child enrolled for the entire calendar year in a K-12 private school or homeschool.  The deduction is $1,000 per qualified dependent.

Please let us know if you would like more information.  Your contributions and/or payments must be made by the end of the year in order to report these items on your 2014 Indiana tax return.

Katleen Reno, EA