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09 February 2026

Indiana enacts limited IRC conformity update and announces timing for upcoming amnesty program

  • Indiana Senate Bill 212, which became law on January 29, 2026, updates the state's conformity to the Internal Revenue Code to conform to select "One Big Beautiful Bill Act" provisions.
  • The legislature is currently considering another bill that would update the state's conformity date to January 1, 2026, and address additional "One Big Beautiful Bill Act" provisions.
  • The Indiana Department of revenue separately announced that it will run an eight-week tax amnesty program from July 15, 2026, to September 15, 2026, with additional details to follow.
 

On January 29, 2026, Indiana Governor, Mike Braun, signed Senate Bill 212 (SB 212), which updates Indiana's conformity to the Internal Revenue Code (IRC) to align with certain provisions of the "One Big Beautiful Bill Act" (OBBBA).1 Separately, the Indiana Department of Revenue (Department) announced the timing for its upcoming eight-week tax amnesty program, which will start in July.

IRC conformity

Indiana conforms with the IRC in effect as of January 1, 2023. SB 212 updates Indiana's IRC reference to July 4, 2025, for the following OBBBA provisions:

  • IRC Section 232 — Adoption tax credit
  • IRC Section 168(e)(3)(B)(vi)3 — Accelerated cost recovery system
  • IRC Section 223(c)(2)(E)4 — Safe harbor for absence of deductible for telehealth

These changes impact individuals, pass-through entities and corporations.

The Indiana legislature is currently considering a separate bill, SB 243, which would update the state's conformity to the IRC to January 1, 2026 and address conformity/nonconformity to other OBBBA provisions.

Amnesty

In May 2025, House Bill 1001 (HB 1001), Indiana's biennial budget bill, required the Department to establish an eight-week tax amnesty program for taxpayers with an unpaid tax liability for a listed tax due and payable before January 1, 2023. (See Tax Alert 2025-1121.) The program applies to most Indiana taxes except those related to riverboat or racetrack gambling and allows for the waiver of interest and penalties for participating taxpayers.

On February 4, 2026, the Department announced that the amnesty program will run July 15, 2026 to September 15, 2026. The Department indicated that pending legislation is expected to clarify eligibility5 guidelines and that they will announce more details in the near future. (See SB 243, which would modify the tax amnesty program provisions.)

Implications

Taxpayers will want to take note of Indiana's limited IRC conformity updates and look for additional announcements from the Department on the coming amnesty program.

EY will monitor SB 243, which would enact a broader IRC conformity update and modify the tax amnesty provisions, and issue additional Tax Alerts as warranted.

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Endnotes

1 P.L. 119-21. For a discussion of the state income tax implications of the OBBBA, see Tax Alert 2025-1487.

2 Under current law, Indiana taxpayers that claim the federal adoption tax credit can claim a state adoption tax credit. The Indiana credit equals the lesser of: (1) 20% of the federal adoption credit; or (2) $2,500 per eligible child. The federal adoption credit is equal to the qualified adoption expenses, with some limitations. The federal credit was nonrefundable until 2024. As amended by the OBBBA, beginning tax year 2025, up to $5,000 of the federal adoption credit may be refundable. Any non-refundable portion of the credit that exceeds a taxpayer's liability can still be carried forward for up to five tax years.

3 The OBBBA terminates the special five-year cost recovery period for investments in certain solar and wind property, construction on which began after December 31, 2024.

4 The OBBBA extended and made permanent a provision that allows a health plan to be treated as a high-deductible health plan without requiring a deductible for telehealth services. SB 212 provides the same benefit to Indiana taxpayers.

5 HB 1001 indicated that taxpayers may not participate in this new amnesty program if they have participated in any prior Indiana amnesty program, or a special amnesty program for use tax on claimed racehorses.

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Contact Information

For additional information concerning this Alert, please contact:

State and Local Taxation Group

Published by NTD’s Tax Technical Knowledge Services group; Chris DeZinno, legal editor

Document ID: 2026-0392

 

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