1040-IN: Adoption credit

Alerts and notices

Indiana allows an adoption credit against state income tax if you claimed an adoption credit on your federal return. The credit is typically calculated as a percentage of the federal credit, subject to certain restrictions. The current year federal adoption credit calculates based on adoption expenses incurred in the current year plus any carryover credit from prior years. Starting in 2012, you can carry over any unused federal credit for 5 years. Since Indiana did not adopt the credit until 2015, the current year Indiana credit is based on the federal credit from current year expenses and federal carryovers from 2015 or thereafter. You can't claim an Indiana Adoption credit based on federal carryover from 2014 or earlier. 

Information you enter on the first unit of the federal 8839 screen automatically calculates the Indiana Adoption Credit Worksheet. If there are more than three children reported on Form 8839, use the Other credits statement on the INCr screen and enter code 859 to force the Adoption Credit amount eligible to report on Schedule 6 or G. 

Carryover information from federal Form 8839 will proforma to the Adoption Credit Carryover section of the INCr screen in the Credits folder.