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Legislators

Indiana Lawmakers to Address Tax Conformity during Special Session

Strategic Insights

— 2 min read

Indiana lawmakers will consider updating the state's tax code to reflect recent federal changes during the upcoming special session in November. The move comes after Governor Mike Braun requested that legislators bring the state's tax code in line with recent federal alterations, warning of "discrepancies" between Indiana and federal law that could complicate 2025 tax filings. Tax experts say that differences stem from the One Big Beautiful Bill Act (OBBBA), which made significant revisions to the federal Internal Revenue Code.

Key Takeaways:

  • 42 provisions in the OBBBA could affect state tax filings, including five with direct implications for 2025 returns filed in 2026.
  • Section 70402 makes up to $5,000 of the adoption tax credit refundable starting in 2025.
  • Section 70403 allows tribal governments to designate children as having special needs for adoption tax credit purposes.
  • Section 70307 provides 100% depreciation for certain manufacturing-related real property placed in service between 2025 and 2031.
  • Section 71306 permanently allows high-deductible health plans to cover telehealth services pre-deductible without affecting HSA eligibility.
  • Section 70509 repeals accelerated depreciation for certain energy-related assets.
  • The Indiana Department of Revenue has identified the provisions and is evaluating the overall fiscal impact.
  • Indiana is a "static" conformity state, meaning lawmakers must pass legislation to update the state's definition of the Internal Revenue Code.
  • Without this step, the state continues using the older version of federal law, even as taxpayers file under the new federal rules.
  • Tax experts warn that the current conformity date is badly outdated and leaves accountants and businesses unsure which federal rules the state actually follows.
  • The Indiana Chamber of Commerce supports a careful but timely review of the new federal provisions.
  • The Chamber is "closely reviewing the federal changes and assessing where conformity would support Indiana's long-standing commitment to a predictable and growth-oriented tax structure."

Statistics:

  • 42 provisions in the OBBBA could affect state tax filings.
  • 5 provisions have direct implications for 2025 returns filed in 2026.
  • Up to $5,000 of the adoption tax credit is refundable starting in 2025 (Section 70402).
  • 100% depreciation is provided for certain manufacturing-related real property placed in service between 2025 and 2031 (Section 70307).
  • High-deductible health plans can cover telehealth services pre-deductible without affecting HSA eligibility, permanently (Section 71306).

Sources:

  • Phillip Rubino/Getty Images
  • "US House Passes Massive Tax Break and Spending Cut Bill, Sending it to Trump" (https://indianacapitalchronicle.com/2025/07/03/repub/breaking-us-house-passes-massive-tax-break-and-spending-cut-bill-sending-it-to-trump/)
  • "Indiana Department of Revenue" bulletin (https://indianacapitalchronicle.com/wp-content/uploads/2025/10/ib119.pdf)
  • University of Indianapolis (Photo courtesy University of Indianapolis)
  • "Indiana Governor Summons Lawmakers for Redistricting Session Amid National GOP Pressure" (https://indianacapitalchronicle.com/2025/10/27/indiana-governor-summons-lawmakers-for-redistricting-session-amid-national-gop-pressure/)

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