Form Ida-10 - Individual Development Account Tax Credit Application (Page 2 of 2) in pdf

Instructions for Filing Form IDA-10/20

Individual Development Account Tax Credit Application

(code number 823)

Line 2: Enter the amount of your contribution multiplied by 50% (.50). This

Form IDA-10/20 must be filed by a taxpayer (including any S corporation,

is the amount eligible for IDA tax credit, subject to the maximum credit limit

partnership, limited liability company or individual) who makes a contribution

and your income tax liability after applying other nonrefundable credits for

and wishes to claim credit for the contribution to a Community Development

the tax year of the contribution.

Corporation (CDC) participating in an Individual Development Account (IDA)

program. The credit can be applied against a taxpayer’s Indiana adjusted

Line 3: Enter the lesser of line 2 or $25,000. This tentative approved credit

gross income tax liability, or the financial institution tax. 50% of the amount

contributed is eligible for the tax offset credit. Form IDA-10/20 is distributed

is available to offset only the annual state income tax or franchise tax

liability. There is no carry over of unused credit to other taxable years. It is

by the Indiana Housing Finance Authority.

the responsibility of the contributor/taxpayer to claim the approved credit

for the tax year in which the donation was made.

The IDA program enables the nonprofit CDC to finance additional individual

development accounts. The program is designed to assist qualifying low-

The credit application must be signed to be considered valid. If left unsigned,

income residents to accumulate savings and build personal finance skills.

the application will be returned for signature. Proof of payment (copy of

Account-holders may use their savings to pay for higher education or

check, receipt from the nonprofit community development organization, etc.)

vocational school; to learn a trade by attending an accredited or licensed

must be attached to this application.

training program; to start or buy a business and/or to buy a home.

The tax credit provided under Indiana Code 6-3.1-18 may be applied against

Instructions for Recipient Organizations

the specified taxes owed for taxable years beginning after December 31,

1997. Applications are filed through the CDC. The organization must have

The Community Development Corporation must fill in the recipient organization

an approved program number from the Indiana Department of Commerce

information sections of Form IDA-10/20. List the CDC’s Indiana taxpayer

before a contribution qualifies for pre-approval. The State of Indiana is

identification number (TID) and program number. An officer or delegate of

limited to granting a total of $200,000 in Individual Development Account Tax

the CDC must verify receipt of each contribution by signing the certification

Credits each fiscal year.

section of the form.

Completing Form IDA-10/20

It is the recipient organization’s responsibility to file IDA-10/20 forms with

the Indiana Department of Commerce. File completed IDA-10/20 forms with

Complete the identification sections at the top and bottom of the form using

the quarterly report form on assigned due dates. Send to the Indiana

the legal name of the contributor and the same tax identification number

Housing Finance Authority, Individual Development Account

used for federal purposes. Check the type of tax return to be filed by the

Program, 30 S. Meridian, Suite 1000, Indianapolis, Indiana 46204.

contributor (be sure to indicate the current tax year ending date).

Each form filed with the Department of Commerce’s approval is submitted to

Credit Computation and Verification

the Indiana Department of Revenue for a final determination. The Department

will accept a properly completed contributor application and certification as

proof of cash contributions.

Line 1: Enter the amount of contribution in cash made to the Community

Development Corporation having a qualified tax credit program. The

When the tax credit application is approved, Form IDA-20 will be mailed to

computation is based on contributed amounts from $100 up to $50,000; and

contributor/taxpayer. The IDA-20 must be attached to the income tax return

is limited to the lesser of: fifty percent (50%) of the amount contributed, the

when credit is claimed.

state income tax due, or twenty-five thousand dollars ($25,000).

Instructions for Form IDA-20

Be sure the information is the same as shown on Form IDA-10. The IDA-20 should be left attached to the IDA-10 when filed by the contributor.

Upon receipt, the shaded section of the IDA- 20 will be completed by the Indiana Department of Revenue. The approved credit is available to

offset only the annual state income tax liability. County income taxes may not be reduced. For purposes of this limitation, state income tax due

is first reduced by any other nonrefundable credit according to I.C. 6-3.1-1-2, such as credit for taxes paid to other states and the college

contribution credit, before the IDA credit is applied. There is no provision to carry back, carry forward or refund any unused portion of the credit.

The Department will return the IDA certificate to the contributor marked with one of the following indications:

Approved -- Your credit request has been approved for the amount indicated on the IDA-20.

Attach the approved Form IDA-20 to the Indiana tax return to support the claim. If a pass-through entity made a contribution and

does not have a state income tax liability, it must report the pro-rata share of the approved IDA-20 credit on information Schedule

IN K-1. (Members of pass-through entities must attach a copy of Schedule IN K-1 to claim their allotted share of this credit.) Any excess

credit on their return may not be refunded or carried over.

Disapproved -- Your tax credit request is not allowed. If the tax credit application is disapproved, a letter will accompany Form IDA- 20

to explain the reason for denial.

For all inquiries about the Individual Development Account tax credit program call: The Indiana Housing Finance Authority at

317-232-7777 or 1-800-872-0371 outside Indianapolis.

Form Ida-10 - Individual Development Account Tax Credit Application Page 2

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