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Pass-through Tax Credits

Each shareholder is allowed a pro rata share of the

Neighborhood Assistance Tax Credit - Enter the allowable

income tax credits available to the S corporation. Each

income tax credit from pre-approved Form NC-20. For further

shareholder’s share of an available credit is reported on IT-

information, refer to Income Tax Information Bulletin #22. Attach

20S Schedule IN K-1, line 13, and must be supported by

Form NC-20 if claiming this credit.

attaching the properly completed tax credit schedule or form

to the corporation’s return. The shareholders may claim their

Prison Investment Tax Credit - An income tax credit is allowed

allowable portion of Indiana credits on their respective annual

under IC 6-3.1-6 for amounts invested in Indiana prisons to create

income tax returns: Form IT-40, IT-40PNR or IT-41.

jobs for prisoners. The amount is limited to fifty (50) percent of

Note: Enterprise zone credits may not be applied

the investment in a qualified project approved by the Department

against the S corporation's withholding, composite or

of Corrections, plus twenty-five (25) percent of the wages paid

use tax liabilities on Form IT-20S.

to inmates. Effective January 1, 2002, pass-through entities

are eligible for the credit.

Coal Combustion Product Tax Credit - IC 6-3.1-25.2

provides for a coal combustion product credit against adjusted

Voluntary Remediation Tax Credit - IC 6-3.1-23 provides a

gross income tax. A coal combustion product is the

credit for qualified investments involving the remediation of a

byproduct resulting from the combustion of coal in a facility

brownfield. Effective: January 1, 2005, the credit is limited to

located in Indiana. A manufacturer that obtains and uses

the lesser of a taxpayer’s state tax liability for all listed taxes,

coal combustion products for the manufacturing of recycled

$200,000, or one hundred (100) percent of the qualified

components and is a new business is eligible for the credit.

investment up to $100,000 and fifty (50) percent of the qualified

An existing business that manufactures recycled

investment that exceeds $100,000. The Department of

components, and increases the acquisitions of coal

Environmental Management shall share administrative duties

combustion products by ten (10) percent over the average

with the Indiana Development Finance Authority, which shall

amount obtained in the previous three (3) years is also eligible

certify the project.

for the credit.

The total amount of credits that may be granted in each

The credit is equal to $2 per ton of coal combustion

state fiscal year is limited to $2 million and must be claimed in

products used by the manufacturer and applies to the

a taxable year that begins before December 31, 2007, excluding

additional amount of coal combustion products used by the

carry-forwards. Carryover of prior unused credit may be carried

manufacturer as approved by the Center for Coal Technology

back only one (1) year or carry forward up to five (5) years.

Research. Attach Form CCP-100 to the return.

Form VRTC-10/20 is used to file an application for approval

and to claim this credit following certification of the project.

Historic Rehabilitation Tax Credit - A S corporation is

entitled to an income tax credit, provided under IC 6-3.1-16-

For information regarding the definitions, procedures,

7.5(b), on qualified expenditures made for rehabilitation of

and qualifications for the following credits, contact: Indiana

historic property. If the corporation has no state income tax

Economic Development Corporation, One North Capitol,

liability, the shareholders are entitled to claim, as a pass-

Suite 700, Indianapolis, Indiana, 46204, or call (317) 232-

through, their share of credit. The Division of Historic

8900; Web address:

Preservation and Archeology administers this program and

may be contacted at 402 W. Washington St., Room W274,

Blended Biodiesel Tax Credits - IC 6-3.1-27 provides a state

Indianapolis, Indiana 46204, or call (317) 232-1646.

tax credit for a taxpayer that produces biodiesel at a facility

located in Indiana and is approved by Indiana Economic

Indiana Research Expense Tax Credit - Effective

Development Corporation (IEDC). The credit is equal to $1 per

beginning July 1, 2005, Indiana qualified research expense

gallon of biodiesel produced in Indiana and used to produce

credit is equal to ten (10) percent of the of the corporation’s

blended biodiesel.

increased Indiana qualified research expense. Schedule IT-

A second credit is provided for a producer of blended

20REC must be attached.

biodiesel at a facility located in Indiana certified by the IEDC.

Individual Development Account Tax Credit - A tax credit

The credit is equal to $.02 per gallon of blended biodiesel

is available equal to fifty (50) percent of the contribution, if

produced in Indiana. The total credits for all taxpayers in all

not less than $100 and not more than $50,000, which is

taxable years may not exceed $3 million.

made to a Community Development Corporation participating

The unused amount of credits may be carried forward up

in an Individual Development Account program.

to six (6) taxable years. See Income Tax Information Bulletin

The amount of total credits allowed per fiscal year is

# 91 for further information. A copy of approved Form BD-100

limited to $200,000 per state fiscal year. Applications for the

must be attached to the return.

credit are filed through the Community Development

Corporation using Form IDA-10/20. The organization must

have an approved program number from the Housing Finance

Authority, 30 S. Meridian St., Suite 1000, Indianapolis, IN

46204.

Form It-20s - S Corporation Income Tax Booklet - Indiana Department Of Revenue - 2005 Page 15

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