Ind. Code § 20-51.4-4-1 Establishment of accounts; ESA agreement; terms
Sec. 1. (a) After June 30, 2022, a parent of an eligible student or an emancipated eligible student may establish an Indiana education scholarship account for the eligible student by entering into a written agreement with the department on a form prepared by the department. The department shall establish a date by which an application to establish an ESA account for the upcoming school year must be submitted. However, for a school year beginning after July 1, 2022, applications must be submitted for an eligible student not later than September 1 for the immediately following school year. The ESA account of an eligible student shall be made in the name of the eligible student. The department shall make the agreement available on the website of the department. To be eligible, a parent of an eligible student or an emancipated eligible student wishing to participate in the ESA program must agree that:
(1) subject to subsection (i), a grant deposited in the eligible student's ESA account under section 2 of this chapter and any interest that may accrue in the ESA account will be used only for the eligible student's ESA qualified expenses;
(2) if the eligible student participates in the CSA program, a grant deposited in the eligible student's ESA account under IC 20-51.4-4.5-3 and any interest that may accrue in the ESA account will be used only for the eligible student's ESA qualified expenses;
(3) money in the ESA account when the ESA account is terminated reverts to the state general fund;
(4) the parent of the eligible student or the emancipated eligible student will use part of the money in the ESA account:
(A) for the eligible student's study in the subject of reading, grammar, mathematics, social studies, or science; or
(B) for use in accordance with the eligible student's:
(i) individualized education program;
(ii) service plan developed under 511 IAC 7-34;
(iii) choice special education plan developed under 511 IAC 7-49; or
(iv) plan developed under Section 504 of the federal Rehabilitation Act of 1973, 29 U.S.C. 794;
(5) the eligible student will not be enrolled in a school that receives tuition support under IC 20-43; and
(6) the eligible student will take the statewide summative assessment, as applicable based on the eligible student's grade level, as provided under IC 20-32-5.1, or the assessment specified in the eligible student's:
(A) individualized education program developed under IC 20-35;
(B) service plan developed under 511 IAC 7-34;
(C) choice special education plan developed under 511 IAC 7-49; or
(D) plan developed under Section 504 of the federal Rehabilitation Act of 1973, 29 U.S.C. 794.
(b) A parent of an eligible student may enter into a separate agreement under subsection (a) for each child of the parent. However, not more than one (1) ESA account may be established for each eligible student.
(c) The ESA account must be established under subsection (a) by a parent of an eligible student or an emancipated eligible student for a school year on or before a date established by the department which must be at least thirty (30) days before the fall count day of ADM established under IC 20-43-4-3. A parent of an eligible student or an emancipated eligible student may not enter into an agreement under this section or maintain an ESA account under this chapter if the eligible student receives a choice scholarship under IC 20-51-4 for the same school year. An eligible student may not receive a grant under section 2 of this chapter if the eligible student is currently included in a school corporation's ADM count under IC 20-43-4.
(d) Except as provided in subsections (e) and (f), an agreement made under this section is valid for one (1) school year while the eligible student is in kindergarten through grade 12 and may be renewed annually. Upon graduation, or receipt of a certificate of completion under the eligible student's individualized education program, the eligible student's ESA account is terminated.
(e) An agreement entered into under this section terminates automatically for an eligible student if:
(1) the eligible student no longer resides in Indiana while the eligible student is eligible to receive grants under section 2 of this chapter; or
(2) the ESA account is not renewed within three hundred ninety-five (395) days after the date the ESA account was either established or last renewed.
If an ESA account is terminated under this section, money in the eligible student's ESA account, including any interest accrued, reverts to the state general fund.
(f) An agreement made under this section for an eligible student while the eligible student is in kindergarten through grade 12 may be terminated before the end of the school year if the parent of the eligible student or the emancipated eligible student notifies the department in a manner specified by the department.
(g) A distribution made to an ESA account under section 2 of this chapter is considered tax exempt as long as the distribution is used for an ESA qualified expense. The amount is subtracted from the definition of adjusted federal gross income under IC 6-3-1-3.5 to the extent the distribution used for the ESA qualified expense is included in the taxpayer's adjusted federal gross income under the Internal Revenue Code.
(h) The department shall establish a student test number as described in IC 20-19-3-9.4 for each eligible student.
(i) A student described in IC 20-51.4-2-4(3)(B) may not use the money deposited into the eligible student's ESA account for ESA qualified expenses described in IC 20-51.4-2-9(a)(3), IC 20-51.4-2-9(a)(6), IC 20-51.4-2-9(a)(7), or IC 20-51.4-2-9(a)(9).
As added by P.L.165-2021, SEC.180. Amended by P.L.9-2022, SEC.38; P.L.132-2022, SEC.4; P.L.201-2023, SEC.220; P.L.202-2023, SEC.49; P.L.9-2024, SEC.410; P.L.127-2024, SEC.5; P.L.150-2024, SEC.69; P.L.1-2025, SEC.198; P.L.213-2025, SEC.211.