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Summer Tax Credit

Posted: Tue, 08/30/2011 - 9:24am Updated: Tue, 01/06/2015 - 2:25pm

Under Indiana Code 6-3.1-2, employers can claim a credit against their income tax liabilities for employing eligible teachers in qualified positions during summer school recess. The credit for each eligible teacher employed in a qualified position is limited to the lesser of:<

    1. Fifty percent (50%) of the amount of compensation paid to the eligible teacher by the employer during the summer school recess, or
    2. $2500.00

An eligible teacher is a teacher licensed to teach in a shortage area and employed during the regular school term by a public school corporation to teach in a shortage area. Shortage areas include mathematics, science and other areas designated by the Professional Standards Board. A qualified position is one which is relevant to the teacher's academic training in the shortage area and which utilizes skills and expertise developed as a result of the teacher's academic training or teaching experience.

This application must be completed for each eligible teacher employed in a qualified position. The State Board of Education will approve or reject each application and will issue a qualified position certificate to each employer submitting an approved application. The certificate will be issued for the aggregate maximum eligibility of all approved applications. New applications may be submitted if the employer hires or intends to hire additional eligible teachers. Amended applications may be submitted to reflect changes in compensation to be paid under approved applications.

Employers must notify the Indiana Department of Revenue of the amount of credit expected to be claimed by filing Part 1 of Schedule TSE no later than October 31. Additional information concerning the credit may be found in the instructions to Schedule TSE and in Income Tax Division, Information Bulletin #59.

Instructions - Section 1 is completed by the employer, whose name should be listed the same as it will be shown on the employer's income tax return. Section 2 is to completed by the school corporation employing the teacher during the regular school term. The completed application should be submitted to the State Board of Education at the address shown on the application form.

License areas eligible for summer tax credit program:

  • math
  • gifted and talented education
  • science, with preference given to earth/space science, physical science and physics
  • vocational education, except aerospace education, agricultural business, occupational home economics, and marketing education
  • special education
  • instructional supervision

You can find the Teacher Summer Employment Tax Credit form here