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Capital Investment Tax Credit- Effective January 1, 2001, a

If the pass-through entity does not have a state adjusted

pass- through entity is eligible for a capital investment cost

gross income tax liability (Schedule B tax computation) against

tax credit provided by IC 6-3.1-13.5 based on certain qualified

which the enterprise zone credit must be applied, the

capital investments made in Shelby County. The credit, if

shareholders of the pass-through entity are entitled to a pro

certified by the Indiana Economic Development Corporation,

rata share of the computed available credit. Credit is calculated

is equal to fourteen (14) percent of the amount of the approved

on Schedule EZ - Part 2, which is available upon request from

qualified investment and is ratable over a seven (7) year period.

the Department. Attach the completed schedule to Form IT-

Contact: Economic Development Division, (317) 232-5297.

20S. If no part of the credit is applied against the state income

tax liability of the S corporation, report each shareholder's pro

Community Revitalization Enhancement District Credit -

rata share of the credit on line 15 of Schedule IN K-1.

Pass-through entities are eligible for a state and local income

tax liability credit for a qualified investment for redevelopment

Enterprise Zone Investment Cost Credit - An S corporation

or rehabilitation of property within a community revitalization

is entitled to an Enterprise Zone Investment Cost Credit provided

enhancement district. The expenditure must be approved by

under IC 6-3.1-10-4 for a qualified investment made in a

the Indiana Economic Development Corporation before it is

designated zone located in Vico County, Indiana. If the

made. The credit is equal to twenty-five (25) percent of the

corporation has no adjusted gross income tax liability, individual

qualified investment made by the taxpayer during the taxable

shareholders are entitled to claim, as a pass-through, their

year.

share of the credit.

The taxpayer can assign the credit to a lessee who remains

subject to the same requirements. The assignment must be

Enterprise Zone Loan Interest Tax Credit - A pass-through

in writing and any consideration may not exceed the value of

entity is eligible for the Enterprise Zone Loan Interest Tax

the part of the credit assigned. Both parties must report the

Credit. The credit is equal to five (5) percent of the interest

assignment on their state income tax return for the year of

earned from qualified loans during the tax year made to entities

assignment.

that use the proceeds for conducting business activities located

in enterprise zones. The pass-through entity claiming a loan

EDGE Program and Job Retention Credits - IC 6-3.1-13

interest tax credit must pay a registration fee, provide additional

allows the Economic Development for a Growing Economy

assistance to urban enterprise associations required of zone

(EDGE) program to include projects for job retention and job

businesses, and meet requirements adopted by the Enterprise

creation in Indiana. The job retention criteria require that the

Zone Board.

applicant employ at least 200 (75 effective July 1, 2005)

If the pass-through entity does not have a state adjusted

employees. The average compensation must exceed the

gross tax liability (Schedule B tax computation) against which

county average by five (5) percent, and the local communities

the enterprise zone credit must be applied, the shareholders

affected must contribute $1.50 of incentives for every $3 of

of the pass-through entity are entitled to a pro rata share of

tax credit provided. Effective July 1, 2005, the local match is

the computed available credit. Credit is calculated on Schedule

determined by the Indiana Economic Development

LIC, which is available upon request from the Department.

Corporation.

Attach the completed schedule to Form IT-20S. If no part of

The aggregate amount of credits awarded for projects to

the credit is applied against the state income tax liability of

retain existing jobs in Indiana is capped at $5 million per year

the S corporation, then report each shareholder's pro rata share

and is extended through June 30, 2007. An agreement for

of the credit on line 15 of Schedule IN K-1.

awarding job retention credits must be approved by the state

budget agency.

Ethanol Production Tax Credit - IC 6-3.1-28 provides an

A taxpayer must claim the credit with all information that

ethanol production tax credit for a facility located in Indiana,

the Department of Revenue determines necessary for the

with a capacity to produce 40 million gallons of ethanol per

calculation of the credit on the annual state tax return or

year, and the facility increases its capacity by at least 40

return(s) prescribed by the Department.

million gallons per year.

EDGE credit is claimed as a refundable credit on line 18.

A taxpayer is entitled to a credit of $.125 per gallon of

ethanol produced at the Indiana facility. If the amount of the

Enterprise Zone Employment Expense Tax Credit - A pass-

credit exceeds the taxpayer’s state tax liability, the excess

through entity (S corporation doing business in a zone) located

may be carried forward. To receive the credit, the taxpayer

in a zone is eligible for the enterprise zone credit for increased

must submit to the Department documentation for credit

wages in the zone. The credit is equal to the lesser of ten (10)

calculation and copy of Certificate of Qualified Facility issued

percent of the cost of wages paid only to those newly hired

by the Indiana Economic Development Corporation.

(after December 31, 1998) employees who live in a zone during

See Income Tax Information Bulletin # 93 for further

the tax year, or product of $1,500 times the number of new

information. A copy of approved Form EP-100 must be attached

qualified employees who live in a zone.

to the return.

Form It-20s - S Corporation Income Tax Booklet - Indiana Department Of Revenue - 2005 Page 16

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