A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Plain English Breakdown

The official source does not provide specific details on how long money can be kept in these accounts or the exact repayment requirements if funds are misused.

First Time Home Buyer Savings Program

This bill establishes a program to help first-time home buyers save money tax-free for purchasing their first single-family house, offering tax credits based on contributions.

What This Bill Does

• Establishes the First Time Home Buyer Savings Program to assist people who are saving up to buy their first single-family residence.
• Requires financial institutions to offer special savings accounts where all earnings and interest are exempt from Indiana taxation.
• Specifies that withdrawals from these accounts used for down payments and allowable closing costs on a single family residence are also tax-exempt.
• Creates a state adjusted gross income tax credit of up to $5,000 based on contributions made to the savings account each year.

Who It Names or Affects

• First-time home buyers who want to save money for purchasing their first single-family house.
• Financial institutions offering special savings accounts for first-time home buyers.
• The Indiana Housing and Community Development Authority, which will manage the program.

Terms To Know

Tax Credit

A reduction in the amount of tax a person has to pay.

Down Payment

The initial payment made when buying something, usually a house or car, which is less than the total price.

Limits and Unknowns

• It does not specify how long someone can keep money in these accounts.
• Details about repayment of tax credits if funds are used for non-eligible purposes may be complex and vary.

Official Summary Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation.
First time home buyer savings program.

Current Bill Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

First time home buyer savings program.

Establishes the first time home buyer savings program (program) for the purpose of assisting first time home buyers who seek to open a first time home buyer savings account (account) at a financial institution to save money for the purchase of a single family residence. Requires the Indiana housing and community development authority to administer the program, to prepare and supervise the issuance of public information concerning the program, and to prescribe various forms for use by financial institutions that choose to offer accounts. Specifies that: (1) money in an account (including all earnings or interest on an account) is exempt from taxation in Indiana; and (2) withdrawals from an account used for a down payment and allowable closing costs for the purchase of a single family residence; are exempt from state adjusted gross income taxation. Creates a state adjusted gross income tax credit for contributions to an account (credit) in an amount equal to the lesser of: (1) 20% multiplied by the amount of the total contributions made to the account during a taxable year; or (2) $5,000. Requires repayment of all or a part of the credit in a taxable year in which the taxpayer withdraws funds from an account for purposes other than payment of a down payment and allowable closing costs.