IN HB1138

Creates a refundable Indiana state tax credit for employment-related child and dependent care expenses, calculated as a percentage of the federal child and dependent care tax credit claimed under IRC Section 21

Credit amount varies by adjusted gross income: 100% for income at or below $40,000; 75% for income between $40,001-$60,000; 50% for income between $60,001-$75,000

Taxpayers with adjusted gross income exceeding $75,000 are not eligible for the credit

Effective retroactively to January 1, 2026, applying to taxable years beginning after December 31, 2025, with the enabling section expiring June 30, 2029