Incentives Watch: State Tax Credits Enacted That Cover Gamut of Taxpayer Interests

Many states are concluding their respective legislative seasons by passing numerous tax credit bills, among other things.  Various tax credits are being enacted from A (adoption tax credits) to V (vehicle tax credits).

In Indiana, a nonrefundable state tax credit  against adjusted gross income is available for individuals eligible to claim the federal adoption  expenses credit  for taxable years starting on or after Jan. 1, 2015.  The state  credit  equals the amount of the credit  allowed under I.R.C. § 23 for each eligible child on the taxpayer's federal return for the taxable year multiplied by 10 percent; or $1,000 per eligible child, whichever is less.

Starting with the 2014 taxable year, Alabama provides a new, refundable tax credit for private adoptions where the birth mother, baby, and adopting parents live in the state.  The credit is also available or the adoption of foster children.  The credit equals $1,000 per adopted child.  Interestingly, adopted foster children over 14 years of age are eligible for $15,000 in postsecondary education assistance at an in-state institution of higher education.

In addition to state tax credits for adopting a child, there is also a federal adoption tax credit.  For the 2013 tax year, the amount of credit available equaled up to $12,970, according to the Internal Revenue Service.

As for vehicle tax credits, Utah extended its energy-efficient vehicle tax credit to the 2015 taxable year.  The credit is available for taxpayers purchasing electric vehicles, plug-in hybrid vehicles and vehicles fueled by natural gas or propane.

Similarly, Georgia enacted legislation providing a tax credit for heavy-duty and medium-duty vehicles, fueled by an alternative fuel, that are purchased on or after July 1, 2015, but prior to June 30 2017.  Alternative fuel includes electricity, liquid petroleum gas, natural gas or hydrogen fuel.

For more information about other state tax credits and incentives, check out Bloomberg BNA’s Credits and Incentives Portfolios by signing up for a free trial of the Bloomberg BNA Premier State Tax Library today.

In other developments . . .

Iowa extended its sales tax rebate to the Iowa Speedway for 10 years, according to a Bloomberg BNA Weekly State Tax Reportarticle.


By: Kathleen Caggiano

Follow Kathleen on Twitter at:  @katcaggiano .

Follow BBNA on Twitter at: @BBNATax .