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Indiana
R&D Tax Credits

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This post was last updated on Apr 12, 2024.

Indiana R&D Tax Credit

Discover the benefits of Indiana state credits and see how your business could qualify.

credit on first $1M in qualifying expenses

additional credit on qualifying expenses over $1M

10-year

carry forward for credit usage

Estimate the value of your IN R&D tax credits!

Indiana R&D Tax Credit Eligibility Summary:

Is the R&D Tax Credit Available?:

Yes

Eligible Entities:

C-Corporations, S-Corporations, LLCs, Partnerships

Deadline for Tax Filing:

Due with Indiana Tax Return

Data Required to Compute Credit:

Claim Period Qualified R&D Expenses (QREs)

What Information is needed?:

QREs for Prior 3 Years

Indiana R&D Tax Credit Guidelines:

Under Indiana Code § 6-3.1-4-1, the state of Indiana offers a research credit that is calculated under similar requirements as IRC § 41. The Indiana credit is worth 15% of the qualified expenditures over a base amount of $1 million.
Starting in 2009, Indiana now allows taxpayers to compute the credit using an alternative method or a regular method. The credit may be applied toward any taxes on Gross, Adjusted Gross, and Supplemental Net Income Tax.
For pass-through entities, in the event of unused credit, the remaining credit will pass through to each partner or shareholder based on the percentage distribution of income. Unlike federal credits, Indiana R&D credits may not pass through to trusts or estates.
When filing, Indiana necessitates evidence showcasing that the research took place within its borders. The state mandates disclosure of the specific location(s) within Indiana where R&D activities transpired, the whereabouts of personnel engaged in said services, the sites within Indiana where supplies and raw materials were utilized during the R&D procedures, and any other pertinent factors pertaining to R&D operations in Indiana.
A 100% sales tax exemption exists for qualified R&D equipment and property purchases. Taxpayers can claim a refund for sales tax paid on retail transactions if not purchased tax-exempt initially.
R&D equipment and property is defined as tangible personal property acquired for experimental or laboratory R&D purposes, including developing new products or improving existing ones.

Indiana R&D Tax Credit Case Study

A Indiana-based company recovered thousands in R&D tax credits to refuel growth.

$

115,000

Total state R&D tax credits earned

62 %

Amount of wages qualified for tax credits

$

657,000

Total R&D tax credit earned

Key Indiana R&D Tax Credits R&D Tax Rules Changes

2019' - 22

22' and after

2019' - 22

22' and after

Resources

There are many other considerations and exemptions, including what documentation the IRS requires for the R&D tax credits. Stay updated to navigate the new tax laws with confidence.

Check Indiana R&D Tax Credit Law

See How Section 174 Impacts You

Check Frequently Asked Questions

Get Pre-Qualified with R&D Credit Calculator

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Book a call with a Tax Credit Specialist

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Connect with us to find out how R&D Tax Credits can boost your organization’s performance.

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