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Category: Indiana

Other Indiana Credits

About Airport Development Zone Credits:
Certain areas within Indiana have been designated as airport development zones (ADZ). These zones are established to encourage investment and job growth in distressed urban areas.

The following are eligible to claim the airport development zone employment expense credit and/or the airport development zone loan interest credit:

  • Sole proprietors who operate and/or invest in a business located in a zone, and/or
  • Businesses organized as partnerships, S corporations and fiduciaries (who may pass through airport development zone credits to their partners or shareholders).

1) Airport Development Zone Employment Expense Credit
This credit is based on qualified investments made within Indiana. It is the lesser of 10 percent of qualifying wages, or $1,500 per qualified employee, up to the amount of tax liability on income derived from the airport development zone. For more information about this credit, please see Income Tax Bulletin #66.

2) Airport Development Zone Investment Cost Credit
This credit is based on qualified investments made within Indiana. It can be up to a maximum of 30 percent of the investment, depending on the number of employees, the type of business and the amount of investment in an airport development zone. For more information about this credit, please see Income Tax Bulletin #66.

3) Airport Development Zone Loan Interest Credit
This credit can be for up to five (5) percent of the interest received from all qualified loans made during a tax year for use in an Indiana airport development zone. For more information about this credit, please see Income Tax Bulletin #66 and Schedule LIC.

Alternative Fuel Vehicle Manufacturer Credit

A credit is available for qualified investments made within Indiana that foster job creation, reduce dependency on foreign oil and reduce pollution. A person that proposes a project to manufacture or assemble alternative fuel vehicles may apply to the Indiana Economic Development Corporation before the qualified investment is made. A certificate of verification from the IEDC must be included when claiming the credit. For additional information contact the IEDC at (317) 232-8827 or visit their website. You can also refer to Income Tax Bulletin #103.


Blended Biodiesel Credit

Credits are available for taxpayers who produce biodiesel and/or blended biodiesel at an Indiana facility, and for dealers who sell blended biodiesel at retail. Pass-through entities are eligible for this credit. An approved Form BD-100 must be enclosed to verify the claimed credit.

For more information, contact the Indiana Economic Development Corporation, Biodiesel Credit Certification by calling (317) 232-8827 or visiting their website. You can also refer to Income Tax Information Bulletin #91.

Coal Combustion Product Credit

A manufacturer who uses coal combustion products (byproduct resulting from the combustion of coal in an Indiana facility) for the manufacturing of recycled components may be eligible for this credit. Pass-through entities are eligible for this credit. An approved Form CCP-100 must be enclosed to verify the claimed credit.

For more information, contact the Indiana Department of Revenue, Coal Combustion Credit by calling (317) 232-2339.

Coal Gasification Technology Investment Credit

A credit may be available for a qualified investment in an integrated coal gasification power plant or a fluidized bed combustion technology. This credit is available to pass-through entities, such as members of partnerships and S corporations.

You must file an application for certification with the Indiana Economic Development Corporation (IEDC). For more information, contact the IEDC by visiting their website. Also, refer to Income Tax Information Bulletin #99.

Community Revitalization Enhancement District Credit

See the Schedule 6 line 3 instructions for details about this credit. This credit is available to offset both your state and local tax liabilities, and any unused remainder is available to be carried forward. Pass-through entities are eligible for this credit. If you did not use all of the available community revitalization enhancement district credit on Schedule 6, line 3, the remaining credit should be claimed on this line.

Employer Health Benefit Plan Credit

A credit is available to certain employers who begin offering health insurance to their employees. An employer who did not provide health insurance to his employees prior to Jan. 1, 2009, and makes health insurance available to his employees may be eligible for a credit. The credit can be as much as $2,500.

This credit will not be awarded after 2011. Any tax credit previously awarded but not claimed may not be carried over to a taxable year beginning during the period January 1, 2012, through December 31, 2013, and must be carried forward to a taxable year that begins after December 31, 2013, and before January 1, 2016. This credit is available to pass-through entities, such as members of partnerships and S corporations.

For more information about this credit, please refer to Income Tax Information Bulletin #101.

About Enterprise Zone Credits:
Certain areas within Indiana have been designated as enterprise zones. Enterprise zones are established to encourage investment and job growth in distressed urban areas. Current enterprise zones are located in portions of the following cities/locations.

The following are eligible to claim the enterprise zone employment expense credit and/or the enterprise zone loan interest credit:

  • Sole proprietors who operate and/or invest in a business located in a zone.
  • Partnerships.
  • S corporations.
  • Fiduciaries.
  • Pass-through entities.

1) Enterprise Zone Employment Expense Credit

This credit is based on qualified investments made within Indiana. It is the lesser of 10 percent of qualifying wages, or $1,500 per qualified employee, up to the amount of tax liability on income derived from the enterprise zone. For more information, please refer to the Income Tax Information Bulletin #66.

2) Enterprise Zone Investment Cost Credit

This credit is based on qualified investments made within Indiana. It can be up to a maximum of 30 percent of the investment, depending on the number of employees, the type of business and the amount of investment in an enterprise zone. For more information, please refer to the Income Tax Information Bulletin #66.

3) Enterprise Zone Loan Interest Credit

This credit can be for up to five (5) percent of the interest received from all qualified loans made during a tax year for use in an Indiana enterprise zone. For more information, please refer to the Income Tax Information Bulletin #66.

Ethanol Production Credit

An Indiana facility with a capacity to produce 40 million gallons of grain ethanol per year may be eligible for this credit. Proof of information for the credit calculation, plus a copy of the Certificate of Qualified Facility issued by the Indiana Recycling and Energy Development Board, must be enclosed to verify this credit. This credit is available to pass-through entities, such as members of partnerships and S corporations. For more information, please refer to the Income Tax Information Bulletin #93.

Headquarters Relocation Credit

A business with annual worldwide revenue of $100 million, and at least 75 employees, that relocates its corporate headquarters to Indiana may be eligible for a credit. The credit may be as much as 50 percent of the cost incurred in relocating the headquarters. For more information, please refer to the Income Tax Information Bulletin #97.

Historic Building Rehabilitation Credit

An historic building rehabilitation credit is available for the rehabilitation or preservation of an historic building that is listed on the Indiana Register of Historic Sites and Structures, is at least 50 years old and is income-producing. Those eligible to claim this credit include an individual, corporation, S corporation, partnership, limited liability company, limited liability partnership, nonprofit organization and/or joint venture. To qualify for the credit, you must obtain certification from the Division of Historic Preservation and Archaeology, Indiana Department of Natural Resources. For more information, you may call the Department of Natural Resources at (317) 232-1646 or visit their website. You can also see Income Tax Information Bulletin #87.

Note: The total amount of historic building rehabilitation credits allowed for all taxpayers in a year is limited to $450,000.

Hoosier Business Investment Credit

This credit is for qualified investments, which include the purchase of new telecommunications, production, manufacturing, fabrication, processing, refining or finishing equipment. Pass-through entities are eligible for this credit.

This credit is administered by the Indiana Economic Development Corporation (IEDC). Please visit their website or call (317) 234-4046. Also, see Income Tax Information Bulletin #95 for additional information.

Indiana’s Research Expense Credit

Indiana has a research expense credit that is similar to the federal credit for research and experimental expenses paid in carrying on your trade or business in Indiana. S corporations and partnerships may pass through the credit to their shareholders and partners. Enclose your schedule IN K-1 to support your claim.

A completed Form IT-20REC must be kept with your records as the Department can require you to provide this information. To get Form IT-20REC, please click here.

Individual Development Account Credit

A credit is available for contributions made to a community development corporation participating in an Individual Development Account (IDA) program. The IDA program is designed to assist qualifying low-income residents to accumulate savings and build personal finance skills. The organization must have an approved program number from the Indiana Housing and Community Development Authority before a contribution qualifies for pre-approval. S corporations and partnerships may take this credit and pass through the unused portion to their shareholders and partners.

To request additional information about the definitions, procedures and qualifications for obtaining this credit, contact the Indiana Housing and Community Development Authority at (317) 232-7777.

Note: The total amount of individual development account credits allowed for all taxpayers in a year is limited to $200,000. Keep the approval certification from IEDC or letter of assignment with your records as the Department can require you to provide this information.

Industrial Recovery Credit

This credit is based on a taxpayer’s qualified investment in a vacant industrial facility located in a designated industrial recovery site. If the Indiana Economic Development Corporation approves the application and the plan for rehabilitation, you are entitled to a credit based on the “qualified investment.” The minimum age for a facility to be eligible for this credit has been reduced from 20 years to 15 years.

For additional information regarding the procedures for obtaining this credit, contact the Indiana Economic Development Corporation by calling (317) 232-8827 or by visiting their website.

Maternity Home Credit

A credit is allowed for maternity homeowners who provide a temporary residence to at least one unrelated pregnant woman, for at least 60 consecutive days during her pregnancy. The maternity home owner must file an application annually with the State Department of Health to be eligible to claim this credit. A copy of the approved maternity home application must be enclosed with your tax return before the credit can be taken. Contact the Maternal and Child Health Division at 317-233-1253 for more information.

This credit will not be awarded after 2011. Any tax credit previously awarded but not claimed may not be carried over to a taxable year beginning during the period January 1, 2012, through December 31, 2013, and must be carried forward to a taxable year that begins after December 31, 2013, and before January 1, 2016.

Note: The amount of all maternity home tax credits allowed for all taxpayers in a year is limited to $500,000.

Military Base Investment Cost Credit

This credit is available for certain taxpayers who provide for a qualified investment in a business located in a military base, a military base reuse area, an economic development area, a military base recovery site or a military base enhancement area. The amount of the credit depends on the type of business, the number of jobs created and the amount of the investment. The maximum amount of the credit may not exceed 30 percent of the investment. For more information about this credit, contact the Indiana Economic Development Corporation by calling (317) 232-8827 or visiting their website.

You must keep documentation of the qualified investment and certification of the percentage credit allowed by the Indiana Economic Development Corporation as the Department can require you to provide this information.

Military Base Recovery Credit

A taxpayer who is an owner or developer of a military base recovery site may be eligible for a credit if investing in the rehabilitation of real property located in a military base recovery site according to a plan approved by the Indiana Economic Development Corporation (IEDC). For more information about this credit, contact the Indiana Economic Development Corporation by calling (317) 232-8827 or by visiting their website.

Neighborhood Assistance Credit

If you made a contribution or engaged in activities to upgrade areas in Indiana, you may be able to claim a credit for this assistance. Contact the Indiana Housing & Community Development Authority, Neighborhood Assistance Program, 30 S. Meridian, Suite 1000, Indianapolis, IN 46204, telephone number (317) 232-7777, for more information.

Note: Do not report fees paid to your neighborhood association on this line. They are not eligible for this credit.

Note: The amount of all neighborhood assistance tax credits allowed for all taxpayers in a year is limited to $2,500,000.

Prison Investment Credit

A credit is allowed for amounts invested in Indiana prisons to create jobs for prisoners. The amount is limited to 50 percent of the investment in a qualified project approved by the Department of Corrections (DOC), plus 25 percent of the wages paid to inmates. Pass-through entities are eligible for the credit.

Residential Historic Rehabilitation Credit

A credit is available for the repair and rehabilitation of historic residential property that is at least 50 years old and will be used as your primary residence.

For more information about this credit, please refer to the Income Tax Information Bulletin #87. You can also visit the Department of Natural Resources, Historic Preservation and Archaeology Division website.

Note: The total amount of residential historic rehabilitation credits allowed for all taxpayers in a year is limited to $250,000.

Riverboat Building Credit

A tax credit has been established for any individual or company that builds or refurbishes a riverboat licensed to conduct legal gambling in Indiana. This credit is equal to 15 percent of the qualified investment and can be carried forward to subsequent tax years. The Indiana Economic Development Corporation (IEDC) must approve the costs of the qualified investment BEFORE the costs are incurred. You can get additional information by visiting the Indiana Economic Development Corporation, Development Finance Divisions website.

Note: The total amount of riverboat building credits allowed for all taxpayers in a year is limited to $1,000,000.

Twenty-first Century Scholars Program Credit

A credit is allowed for contributions made to the Twenty-First Century Scholars Program Support Fund. The credit is equal to 50 percent of the contributions made during the tax year up to a maximum limit of $100 for a single return and $200 for a joint return. To claim this credit, you must complete and enclose Schedule TCSP-40. Note: This credit is not the same as the College Credit.

Venture Capital Investment Credit

A taxpayer that provides qualified investment capital to a qualified Indiana business may be eligible for this credit. Certification for this credit must be obtained from the Indiana Economic Development Corporation Development Finance Office. You can call (317) 232-8827 or visit their website.

For calendar years beginning after December 31, 2010, the maximum amount of credits available has been increased from $500,000 t0 $1,000,000. Also, a taxpayer is not entitled to a credit for providing qualified investment capital to a qualified Indiana business after December 31, 2014.

Voluntary Remediation Credit

This credit is available to offset both your state and local tax liabilities. Pass-through entities are eligible for this credit. Note: The total amount of voluntary remediation credits allowed for all taxpayers in a year is limited to $2,000,000.

School Scholarship Credit

A credit is available for donations to certain scholarship-granting organizations (SGOs). The amount of credit is equal to 50 percent of the amount of contribution. While there are no limits to how much a donor can contribute to a qualified SGO, the entire tax credit program cannot award more than $7.5 million in credits per state fiscal year (July 1 - June 30).

To qualify for this credit, you must make a contribution to a scholarship granting organization that is certified by the Department of Education. Visit the Indiana Department of Education's website. Note: The amount of all school scholarship tax credits allowed for all taxpayers in a year is limited to $5,000,000.

New Employer Credit

A credit may be available if a business employs at least 10 new qualified employees and, after December 31, 2009, the business:

  • Relocates or locates its operations in Indiana;
  • Incorporates in Indiana; or
  • Expands it operations in Indiana.

For more information about this credit, please refer to the Income Tax Information Bulletin #106.