Tax credit for Indiana residents
Tax Credit for Individuals
Indiana will give you, through a tax credit, 50¢ on each dollar you give to Notre Dame, not to exceed $200. This means that a $400 gift to Notre Dame yields a $200 tax credit; a $200 gift yields a $100 credit; a $100 gift yields a $50 credit, and so on. In other words, you will be reimbursed half your gift by Indiana up to $200 if filing jointly and up to $100 if filing single. The tax credit is applied directly against the “bottom line” of your state tax return, either reducing the amount of taxes owed or providing a refund on taxes paid.
To take advantage of this opportunity, you must use the Indiana Department of Revenue Schedule CC-40 when filing your state income tax return. After clicking on the link, you will need to go to the last section on the page under “Other Individual Forms/Schedules” and choose the first option: CC-40 Indiana College Credit.
To determine the net cost of your gift to Notre Dame, select one of the two links below.
If you are an employee of the University of Notre Dame, find out how you can make your gift to Notre Dame through payroll deduction. After clicking the link, choose the Payroll Deduction Form.
Indiana Tax Credit for Corporations
Indiana corporations may receive 50% credit for gifts, not to exceed 10% of the company’s adjusted gross income tax or $1,000, whichever is less.
The Federal Tax Deduction for Individuals
In addition to the Indiana tax credit, a contribution to Notre Dame may also result in a federal tax deduction. Generally, to qualify for a federal tax deduction, you must itemize deductions on the Federal Tax Form 1040 (long form). The amount of the deduction is based on your income and the amount of your contribution. The federal tax deduction is computed as a reduction in your taxable income and therefore, ultimately, the amount of taxes you owe. It should be noted that the federal deduction for state income tax paid would be reduced in 2013 by the amount of the Indiana college tax credit received for 2012.
Jane Smith, with a taxable income of $36,000, gave $200 to Notre Dame in 2012. She calculated her Indiana income tax and discovered she owed $150 on her total tax liability. However with her $100 credit (50 percent of her gift to Notre Dame), the amount due to the state was reduced from $150 to $50.
Thus, her $200 contribution to Notre Dame resulted in a $100 Indiana tax credit and a $50 federal tax reduction, giving her a net cost of $50 in 2012.
Married Taxpayer Joint Return
Bob Jones, with a taxable income of $27,000, gave $400 to Notre Dame in 2012. Married and filing jointly, he figured his Indiana income tax and discovered he still owed $100 on his tax liability. But with his $200 tax credit (equal to half his gift to Notre Dame), the state will send him a check for $100.
In addition, when he computed his federal income tax, Bob discovered his $400 gift reduced the amount of federal income tax he owed by $60.
Thus, his $400 contribution to Notre Dame resulted in a $200 Indiana tax credit and a $60 federal tax reduction, giving him a net cost of $140 in 2012.