45 IAC 3.1-1-79 Credit for contributions to colleges

Authority: IC 6-8.1-3-3

Affected: IC 6-3-3-5

Sec. 79. College Credit. The Indiana Department of State Revenue will recognize credits taken on Individual, Fiduciary, and Corporation Income Tax Returns which are supported by contributions made to an "institution of higher education located in Indiana." In order to qualify for this credit, the contribution must be made directly to the institution of higher education, or to any corporation or foundation organized and operated solely for the benefit of any such institution of higher education, and/or to the Associated Colleges of Indiana.

However, any shareholder of a sub "S" corporation which makes a contribution to an accredited Indiana college, university or institution will not be eligible for college credit. This is because charitable contributions do not flow through to the shareholders for Federal tax purposes. Organizations which are not subject to the adjusted gross income tax, such as banks and savings and loan associations, may not claim the college credit.

The institution of higher education must grant an associate, bachelors, masters, or doctoral degree, or any combination thereof, and the school must be accredited to grant such degrees by one of the following agencies:

(1) North Central Association of Colleges and Secondary Schools;

(2) Indiana Department of Public Instruction; or

(3) American Association of Theological Schools.

Allowable Credit for Individuals, Trusts and Estates

An individual is entitled to a tax credit for gifts equal to fifty percent (50%) of the aggregate amount thereof, but not exceeding the lesser of:

(1) $100.00 for a single return, trust or estate;

(2) $200.00 for a joint return; or

(3) The individual's adjusted gross income tax liability for the year in which the gifts are made, less the amount of all other credits allowable against such tax under the Adjusted Gross Income Tax Act. With respect to the third limitation, the other credits presently allowed by the Act against adjusted gross income tax include the credit for taxes paid to other states and the credit for the elderly.

In no event will a tax credit for contribution to educational institutions in excess of tax owing in any year give rise to an overpayment of tax to be refunded.

A separate schedule, CC-40, will be available for reporting and claiming this credit. The schedule must be attached to the individual return, Form IT-40, the nonresident return, Form IT-40PNR, or the Fiduciary Return, Form IT-41.

Allowable Credit for Corporations

A corporation is entitled to a tax credit for gifts to institutions of higher education equal to fifty percent (50%) of their total gifts in that year, but not to exceed the lesser of (1) ten per cent (10%) of the corporation's adjusted gross income tax for the year in which the gifts are made; (2) the sum of $1000.00; or (3) the corporation's adjusted gross income tax for the year in which the gifts are made less the amount of all other credits allowable against such tax under the Adjusted Gross Income Tax Act. In no event will the sum of the credit for contributions to institutions of higher education and the credit for the Hard Core Unemployed be in excess of the tax due.

The tax credit may be applied against either the gross income tax or the adjusted gross income tax. The credit computation is based on the adjusted gross income tax. Thus, a corporation which has no taxable adjusted gross income would not be allowed this tax credit. A separate schedule, Form CC-20, is available for reporting and claiming this credit. The schedule must be attached to the corporation return, Form IT-20.

Following is a listing of the eligible schools in which the contributor may qualify for the college credit:

This is not necessarily a complete listing and taxpayers having any questions as to the eligibility of any particular contribution for credit should petition the Department in writing.

(Department of State Revenue; Reg 6-3-3-5(010); filed Oct 15, 1979, 11:15 am: 2 IR 1537; errata, 2 IR 1743)