20140827-IR-045140327NRA Information Bulletin #59 Income Tax August 2014 (Replaces Information Bulletin #59, Dated December 2006) Effective Dates: Upon Publication; January 1, 2015
DEPARTMENT OF STATE REVENUE
Information Bulletin #59 Income Tax August 2014 (Replaces Information Bulletin #59, Dated December 2006)Effective Dates: Upon Publication; January 1, 2015
SUBJECT: Summary of Tax Credits Available to Taxpayers Who File Income Tax Returns
DISCLAIMER: Information bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules, and court decisions. Any information that is inconsistent with the law, regulations, or court decisions is not binding on either the department or the taxpayer. Therefore, information provided in this bulletin should serve only as a foundation for further investigation and study of the current law and procedures related to its subject matter.
SUMMARY OF CHANGESAdds description of credits that have been enacted since 2006 and eliminates credits that have expired or been repealed.
INTRODUCTIONNumerous Indiana tax credits are available for individual, fiduciary, partnership, and corporate taxpayers. This bulletin classifies all the various credits into a combined summary. It includes the credits that may be claimed when the annual income tax return or other applicable tax form is filed. In the case of partnerships, limited liability partnerships, S corporations, and limited liability companies, some credits are allocated to pass through to the partners, shareholders, or members of the entity.
You can obtain detailed information on selected credits by searching on the department's webpage at http://www.in.gov/dor/3650.htm.
I. TYPES OF CREDITSCredits are divided into two types:
• Nonrefundable credits that may be applied against certain tax liabilities.• Refundable credits, which are available for a refund once all tax liabilities are offset.
Type 1 - Nonrefundable Credits and CarryoversSome of the nonrefundable credits may be used only to reduce specific current-year tax liabilities. The unused portion of the credit cannot be refunded or applied against other outstanding tax liabilities. However, other nonrefundable credits have provisions stipulating that if the credit exceeds the total of the current amount of tax due, the unused portion may be carried forward to the taxpayer's future tax liabilities for the same tax type.
Type 2 - Refundable CreditsRefundable credits have a limited period of time in which they may be claimed to be eligible for refund. Also, at the taxpayer's election, all or a portion of a current year's eligible refund can carry over toward the next year's income tax liability. However, the department may reduce or apply an eligible refund toward the taxpayer's other unpaid tax liabilities according toIC 6-8.1-9-2 and for a debtor's offset of refunds underIC 6-8.1-9.5 .
II. CREDITS AVAILABLE TO TAXPAYERSThe following chart titled Tax Liability Credits on page 4 lists all of the available nonrefundable and refundable credits. Each credit is classified into one of the following five categories.
Type 1 Credits1-A. Nonrefundable credits for certain charitable contributions made within Indiana1-B. Nonrefundable credits for qualified investments made within Indiana1-C. Nonrefundable credits for income and business activities of Indiana taxpayers
Type 2 Credits2-D. Refundable credits for personal and business activities of Indiana taxpayers2-E. Refundable credits for estimated and withholding taxes paid to Indiana
Each credit has been assigned a three-digit code or label identifier to be used when claiming credits on the Indiana tax return. The chart includes these codes and a listing of required enclosures for claiming the credit on a tax return.
For filing requirements, eligibility, amount of credit, effective dates, carryback/carryforward application, and other detailed information, see the specific income tax information bulletin issued by the Department of Revenue or contact the agency administering the tax credit for instructions. Claims for credits should be supported by filing all applicable schedules and forms or by a separate calculation and certification from the appropriate agency of the amounts eligible for credit.
Restrictions and LimitationsThe credits are to be applied against the claimant's tax due in the following order:• Credits classified as nonrefundable credits are to be applied first.• Those credits with carryover allowances are to be applied second.• Refundable credits are to be applied last.
The type of tax to which the credit may be applied is also listed. If the credit can be applied against more than one tax type, the additional tax types are listed in the order to be applied.
Additional RestrictionA taxpayer, pass-through entity, shareholder, partner, or member of a pass-through entity cannot be granted more than one tax credit for the same project. This restriction applies to the following credits:• Community Revitalization Enhancement District Tax Credit (808)• Enterprise Zone Investment Credit (813)• Hoosier Alternative Fuel Vehicle Manufacturer Tax Credit (845)• Hoosier Business Investment Tax Credit (820)• Industrial Recovery Tax Credit (824)• Venture Capital Investment Tax Credit (835)
Amount of Credit AvailableThe amount of credit available to be granted may be limited by the statute creating the credit. The following describes those limitations:• Unlimited - There is no limit other than the provisions governing the calculation of an allowable credit up to the amount of tax available to be offset.• Limited - The sum of all approved credits is limited to either the annual amount of the grant money available or the total of all credits that are allowed by the tax credit program.
Key for Tax TypesIdentifier Tax Type Indiana Code AGIT Adjusted Gross Income Tax * IC 6-3-1 through 6-3-7CAGIT County Adjusted Gross Income Tax IC 6-3.5-1.1 CEDIT County Economic Development Income Tax IC 6-3.5-7 COIT County Option Income Tax IC 6-3.5-6 FIT Financial Institutions Tax* IC 6-5.5 INSUR Insurance Premium Tax * IC 27-1-18-2 SALES State Gross Retail and Use Tax - Sales tax due on nonexempt purchases IC 6-2.5 URT Utility Receipts Tax * IC 6-2.3 USUT Utility Services Use Tax IC 6-2.3-5.5 Note: Insurance premium tax, inheritance tax, and property tax are not listed taxes underIC 6-8.1-1-1 .* May include other Indiana state taxes and fees collected on the annual return.
Tax Liability Credits Chart
Nonrefundable CreditsType 1-A Credit for certain charitable contributions within Indiana Identifier Tax Liability Credits Tax Offset Required Enclosure Unlimited (No dollar limit to the total amount of credits granted.) New Adoption Credit AGIT Effective Jan. 1, 2015 859 Charitable Contributions to Higher AGIT Schedule CC-40 CC Education Institutions (College 807 Credit) 834 Twenty-First Century Scholars Program Support Fund AGIT Schedule TCSP-40 Limited (Approved credits are limited to the amount of grant money available.) 823 Individual Development Account Credit AGIT, FIT Approved Form IDA-20; IN K-1 pass-through 828 Neighborhood Assistance Credit AGIT, FIT Approved Form NC-20; IN K-1 pass-through 849 School Scholarship Tax Credit AGIT, INSUR, FIT Schedule IN-OCC Type 1-B Credit for qualified investments (expenditures) made within Indiana Identifier Tax Liability Credits Tax Offset Required Enclosure Unlimited (No dollar limit to the total amount of credits granted.) 806 Coal Gasification Technology Investment Credit AGIT, FIT, INSUR, URT Certification by IURC; IN K-1 pass-through 808* Community Revitalization Enhancement District Credit (CRED credit) AGIT, CAGIT, COIT, CEDIT, INSUR, FIT Certification by IEDC; IN K-1 pass-through 812 Enterprise Zone Employment Expense Credit AGIT, INSUR, FIT Schedule EZ 1, 2, 3; IN K-1 pass-through 813* Enterprise Zone Investment Cost Credit (for individuals and LLCs) AGIT Certification by IEDC; IN K-1 pass-through 818 Headquarters Relocation Credit (availability beginning in 2006) AGIT, FIT, INSUR Proof of investment; IN K-1 pass-through 820* Hoosier Business Investment Credit AGIT, INSUR, FIT Certification by IEDC and proof of investment; IN K-1 pass-through; Schedule IN-OCC 822 Indiana Research Expense Credit AGIT Schedule IT-20REC; IN K-1 pass-through 824* Industrial Recovery Credit AGIT, INSUR, FIT Certification by IEDC and credit assignment Limited (Approved credits are limited to the amount of grant money available.) 819 Historic Building Rehabilitation Credit AGIT Certification by Office of Community and Rural Affairs; IN K-1 pass-through 835* Venture Capital Investment Credit SALES, AGIT, INSUR, FIT Certification by IEDC, credit assignment, and proof of investment; IN K-1 pass-through 845 Alternative Fuel Vehicle AGIT, INSUR, FIT Certification by IEDC Manufacturer Tax Credit New Natural Gas-powered Vehicles Tax Credit AGIT, INSUR, FIT Schedule NGV-C; Schedule IN-OCC *Additional restriction: Only one credit is allowed for the same project. Type 1-C Credits for income and business activities of Indiana taxpayers Identifier Tax Liability Credits Tax Offset Required Enclosure Unlimited (No dollar limit to the total amount of credits granted.) CCR County Credit for the Elderly or Permanently CAGIT, COIT, Complete worksheet in 809 Disabled CEDIT IT-40/IT-40PNR Booklet (for individuals only) OOL Credit for Local Taxes Paid Outside Indiana CAGIT, COIT Complete worksheet in 810 (for individuals only) IT-40/IT-40PNR Booklet OOS Credit for Taxes Paid to Other States AGIT Signed copy of return 811 (for individuals only) from other state 814 Enterprise Zone Loan Interest Credit AGIT, INSUR, FIT Schedule LIC; IN K-1 pass-through 837 Indiana College Choice 529 Savings Plan Credit (for individuals filing single or married couples filing a joint return) AGIT Proof of contribution to Indiana College Choice 529 Plan account 821 Indiana Comprehensive Health Insurance INSUR, AGIT Complete IT-20 Association Credit Schedule H when (for insurance companies only) claiming credit on Form IT-20 817 Indiana Insurance Guaranty INSUR, AGIT Complete Schedule H Association Credit when claiming credit (for insurance companies only) on Form IT-20 816 Nonresident Taxpayer Credit FIT Schedule FIT-NRTC (for financial institutions only) ST Use Tax Credit SALES Complete Sales/Use Tax Worksheet in tax instruction booklets or file Form ST-115 Limited (Approved credits are limited to the amount of grant money available.) 831 Residential Historic Rehabilitation Credit AGIT Certification by Office (for individuals only) of Community and Rural Affairs
Refundable CreditsType 2-D Credits for personal and business activities of Indiana taxpayers Identifier Tax Liability Credits Tax Offset Required Enclosure Unlimited (No dollar limit to the total amount of credits granted.) EIC Earned Income Credit AGIT Schedule IN-EIC (for individuals only) LAKE Income Tax Credit for Property Taxes Paid on Homesteads in Lake County (for individuals only) AGIT Complete worksheet in IT-40/IT-40PNR Booklet UTCE Unified Tax Credit for the Elderly AGIT Follow instructions on (for individuals only) IT-40/IT-40PNR return [Restriction - Tax credit allowed only if claim is timely filed within six months from the end of the tax year or by the extended due date for filing the annual IT-40 return.] unless qualified to file claim on Form SC-40 Limited (Approved credits are limited to the amount of grant money available.) EDGE Economic Development for a Growing Economy - Job Retention Credit AGIT, INSUR , FIT Schedule IN-EDGE-R Type 2-E Credit for estimated and withholding taxes paid to Indiana Identifier Tax Liability Credits Tax Offset Required Enclosure Unlimited (Credit is allowed for the total amount of tax withheld or paid.) EST Credit for Estimated Tax Paid AGIT, FIT, Follow instructions on (Refundable if claimed within three years of the due date, including extensions.) URT annual income tax return to claim amount of estimated taxes paid for the taxable year WTH Credit for State and County Income Taxes AGIT Form(s) W-2, W2-G, Withheld WH-18, 1099, and (Refundable if claimed within three years of the due date, including extensions, except for withholding on wages which must be claimed within two years.) 1099R showing Indiana tax withheld (for more information, see Commissioner's Directive #13)
HOW TO CLAIM CREDITTo claim credits, you must follow application or claim procedures specified by each tax credit program. Complete the appropriate forms and provide all required supporting documentation. See www.in.gov/dor/3650.htm for additional information issued by the Department of Revenue, or contact the agency administering the credit to verify eligibility requirements and filing instructions.
The following is a list of tax credits and contact information for the administering agency of each credit. For credits directly administered by other agencies, contact the state agency listed that administers the tax credit in cooperation with the Department of Revenue.Administering Agency Tax Credit Indiana Department of Revenue • Charitable Contributions to Higher Education Institutions Taxpayer Services Division • County Credit for the Elderly or Permanently Disabled 100 N. Senate Ave. • Credit for Estimated Tax Paid Indianapolis IN 46204 • Credit for Local Taxes Paid Outside Indiana (317) 232-2240 • Credit for Taxes Paid to Other States www.in.gov/dor • Credit for Taxes Withheld • Earned Income Credit • Indiana Research Expense Credit • Income Tax Credit for Property Taxes Paid on Homesteads in Lake County • Natural Gas Powered Vehicle Credit • Nonresident Taxpayer Credit • Unified Tax Credit for the Elderly • Use Tax Credit Indiana Economic Development • Alternative Fuel Vehicle Manufacturer Credit Corporation • Coal Gasification Technology Investment One North Capitol, Suite 700 • Community Revitalization Enhancement District Credit Indianapolis, IN 46204 (CRED) (317) 232-8800 • Economic Development for a Growing Economy (Job www.in.gov/iedc Retention Credit) • Enterprise Zone Employment Expense Credit • Enterprise Zone Investment Cost Credit • Enterprise Zone Loan Interest Credit (LIC) • Headquarters Relocation Credit • Hoosier Business Investment Credit • Indiana Research Expense Credit (with regard to aerospace industry) • Industrial Recovery Credit • Venture Capital Investment Credit Indiana Educational Savings Authority • Indiana College Choice 529 Savings Plan One North Capitol, Suite 444 Credit Indianapolis, IN 46204 (317) 232-5259 www.in.gov/iesa www.collegechoiceplan.com Indiana Comprehensive Health Insurance • Indiana Comprehensive Health Insurance Association Association Credit 4550 Victory Lane P.O. Box 33730 Indianapolis, IN 46203 (317) 614-2018 Indiana Life and Health Insurance • Indiana Insurance Guaranty Association Credit Guaranty Association 251 E. Ohio St. Suite 1070 Indianapolis, IN 46204 www.inlifega.org/ Indiana Housing and Community • Neighborhood Assistance Development Authority Credit Neighborhood Assistance Program 30 S. Meridian St., Suite 1000 Indianapolis, IN 46204 (317) 232-7777 (800) 872-0371 (outside Indianapolis) Office of Community and Rural Affairs • Historic Building Rehabilitation Credit One North Capitol, Suite 600 • Residential Historic Rehabilitation Credit Indianapolis, IN 46204 (317) 233-3762 www.in.gov/ocra Twenty-First Century Scholars Donations • Twenty-First Century Scholars Program State Student Assistance Commission Support Fund 150 W. Market St., Suite 500 Indianapolis, IN 46204 (317) 233-2100 _________________________________Michael J. AlleyCommissioner
Posted: 08/27/2014 by Legislative Services Agency
DIN: 20140827-IR-045140327NRAComposed: Nov 01,2016 1:52:41AM EDTA PDF version of this document.
