Latest change summary
+164 / −354 words · LargeConfidence: high
This bill updates Indiana's conformity to the federal Internal Revenue Code from January 1, 2023 to January 1, 2026, incorporating three years of federal tax law changes affecting adjusted gross income, taxable income, and tax credits. The legislation adds specific references to seven federal provisions including shareholder basis adjustments, dividend treatment for regulated investment companies, and oil and gas depletion limitations, while establishing a special July 4, 2025 conformity date for three specific sections (adoption credit, qualified improvement property classification, and health savings account inflation adjustments). The bill introduces new flexibility for merchants in rounding sales tax amounts for cash transactions, allowing them to choose among three methods—rounding up to the next five-cent increment, rounding down, or using a nearest-rounding system—replacing previous mandatory rounding requirements. House amendments on February 19, 2026 removed previously included provisions related to qualified tips and overtime compensation deductions, and the effective date for the new rounding provisions was accelerated from January 1, 2027 to immediate implementation upon passage.
- Updates Indiana's Internal Revenue Code conformity date from January 1, 2023 to January 1, 2026, bringing state tax code in line with three additional years of federal tax law changes
- Establishes special July 4, 2025 IRC conformity date for adoption credit (Section 23), qualified improvement property (Section 168(e)(3)(B)(vi)), and HSA contribution limits (Section 223(c)(2)(E))
- Replaces mandatory sales tax rounding rules with merchant flexibility to choose among three rounding methods for cash transactions (up, down, or nearest five-cent increment)
- Accelerates effective date for new cash transaction rounding provisions from January 1, 2027 to immediate implementation upon passage
- Removes previously included provisions for qualified tips and overtime compensation deductions through House amendments
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