Indiana Statehouse Update: Chris May, State Representative
Indiana continues to be a great place to start and grow a business, and we're always looking for ways to support Hoosier job creators. That's why I supported a new law providing tax relief to Hoosier small businesses. The new law, unanimously supported at every step and the first to be enacted during the 2023 legislative session, will provide about $50 million in federal tax savings for Indiana's small-business owners. The law will level the playing field to allow small businesses to qualify for the same federal tax deductions that larger corporations already enjoy. Under federal law, businesses can deduct their state tax payments from their federal tax liability. For businesses that pay income tax as a corporation, such as C corporations, this deduction is unlimited. However, for corporations where the owners or shareholders pay their own individual income taxes, such as LLCs and S Corps, this deduction is limited to $10,000.
The new law will allow LLCs and S Corps to receive an unlimited federal deduction for their state tax payments. Indiana now joins at least 29 other states that have already made this change to their tax laws. Be sure to stay up to date with what's going on at the Statehouse by clicking here.