Indiana
Successor Liability – Effective January 1, 2024, if the owner of a business transfers more than half of the business’ physical personal property to another individual, the successor owner will be responsible for any unpaid sales, use, county innkeeper, and food and beverage taxes of the seller. A notice of transfer in bulk must be filed with the Indiana Department of Revenue at least 45 days prior to the transfer or sale of tangible personal property of a business.
Updates to Individual Income Tax Exemptions – The Indiana Department of Revenue’s January tax bulletin provides an inflation adjustment for the maximum income allowable for certain dependents and information relating to a new additional exemption for certain qualifying children. For Indiana purposes, the applicable eligibility tests are determined under 2017 federal guidelines.
Any individual filing an Indiana tax return may claim a $1,000 exemption for themselves as well as each of the taxpayer’s qualifying dependents. Qualifying dependents (as listed in the Tax Bulletin) cannot have gross income equal to or more than the dependent exemption as listed under 2017 federal law ($4,700 for 2023 after inflation adjustments).
Taxpayers can claim a $1,500 exemption for certain qualifying children who are the son, stepson, daughter, or stepdaughter of the taxpayer or an individual under the guardianship of the taxpayer (including adopted and foster children).
Additionally, beginning in 2023, a taxpayer is permitted an exemption of $3,000 for a child who qualifies for the first time for the extra exemption for certain qualifying children. To qualify, the child must meet the requirements for the $1,500 exemption and must be eligible for the exemption for any taxpayer for the first time.
A child is not eligible if any of the following are true: the taxpayer previously claimed a $1,500 exemption for the child, the taxpayer was eligible to claim the child but did not file a return for any reason, or the child was claimed previously or could have been claimed previously as a qualifying child by another taxpayer.
Business Tax Changes Related to the Tax Cuts and Jobs Act - For 2023 and later, Indiana will modify treatment of federal excess business losses and nonprofit separate trade or business losses when determining Indiana net operating losses, backing out some modifications that previously reduced Indiana adjusted gross income. Additionally, beginning in 2022, federally mandated amortization of research expenses over five years replaced immediate expensing. Indiana's 2023 law allows full expensing of these costs in the incurred year, with limitations to prevent deductions exceeding pre-2022 federal allowances. The change applies retroactively from January 1, 2022, with specific reporting codes for deductions and add-backs.
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