Saving for the costs of education for your children is a daunting task for most taxpayers. The state of Indiana offers a tax credit that can directly offset your Indiana income tax for qualifying contributions.
Effective January 1, 2019 the income tax credit for contributions made to an account that will be used for paying K-12 tuition and/or qualifying higher education expenses is 20% of the contribution, up to a maximum credit of $1,000.
Distributions of earnings from the account are income tax free if the monies are used for qualifying education expenses. Qualifying education expenses include:
- Tuition, fees, books, supplies and equipment required for enrollment or attending an eligible school.
- Tuition required for enrollment or attendance at an elementary or secondary public, private or religious school. These costs are limited to $10,000 per tax year on a per-student basis.
- Reasonable costs of room and board for those who are at least half-time students in a degree program.
- Expenses for special needs services incurred in connection with enrollment or attendance at an eligible school.
- Expenditures for computer or peripheral equipment, computer software or internet access and related services. To qualify, the software or services must be used primarily by the beneficiary during any of the years they are enrolled at an eligible educational institution.
If you are interested in learning more about this Indiana income tax credit opportunity please call us today at 765-428-5000.