The taxpayer is entitled to a credit against the state adjusted gross income tax liability for
a taxable year. The credit cannot be used to offset any county tax liability.
The amount of the
credit is the lesser of the following:
(1) 20% of the amount of all contributions the taxpayer makes to an account(s) of the Indiana
CollegeChoice 529 Education Savings Plan during the taxable year; or
(2) amount of the taxpayer’s adjusted gross income tax liability for the taxable year
reduced by the amount of credits allowed; or
(3) $1,000.
Most likely you are being impacted by (2).
http://www.in.gov/dor/files/ib98.pdf
