Ind. Code ch. 6-3.1-35

in effect

Ind. Code § 6-3.1-35-1 Applicability; applications

Sec. 1. The state tax credit provided by this chapter applies only to taxable years beginning on or after January 1, 2024. However, beginning July 1, 2023: (1) eligible applicants may submit applications to the authority for state tax credits for qualified projects; and (2) the authority may evaluate applications and issue eligibility statements; under section 7 of this chapter. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-2 Definitions

Sec. 2. The following definitions apply throughout this chapter: (1) "Authority" refers to the Indiana housing and community development authority created by IC 5-20-1-3. (2) "Eligibility statement" refers to the statement issued by the authority to an eligible applicant under section 7 of this chapter. (3) "Eligible applicant" means a taxpayer who is: (A) an owner of a qualified project; or (B) a shareholder, member, or partner of an owner of a qualified project that is designated by the owner in the manner prescribed by the authority. (4) "Federal tax credit" means a federal low income housing credit under Section 42 of the Internal Revenue Code that is a thirty percent (30%) present value credit. The term does not include a seventy percent (70%) present value credit under Section 42 of the Internal Revenue Code for certain new buildings. (5) "Holder of a state tax credit" for a taxable year in a qualified project's state tax credit period means: (A) the eligible applicant for the qualified project; (B) a shareholder, member, or partner of the owner of the qualified project; or (C) a successor, assignee, or transferee of the eligible applicant under section 6 of this chapter; that has a right to claim all or part of the tax credit for the taxable year. (6) "Qualified basis" of a qualified project has the meaning set forth in Section 42 of the Internal Revenue Code. (7) "Qualified project" means a qualified low income building (as defined in Section 42(c) of the Internal Revenue Code): (A) that is located in Indiana; (B) for which a federal affordable housing tax credit was awarded using a thirty percent (30%) present value of the qualified basis of the building; and (C) that is financed by tax exempt bonds that are subject to the private activity bond volume cap (under Section 42(h)(4) of the Internal Revenue Code). (8) "State tax credit" means the tax credit provided by this chapter. (9) "State tax credit period" for a qualified project means the period of five (5) taxable years beginning with the taxable year a building in the project is placed into service. (10) "State tax liability" means a taxpayer's total tax liability incurred under: (A) IC 6-3-1 through IC 6-3-7 (the adjusted gross income tax); (B) IC 6-5.5 (the financial institutions tax); (C) IC 27-1-18-2 (the insurance premiums tax); and (D) IC 27-1-20-12 (the insurance premiums retaliatory tax); as computed after the application of the credits that under IC 6-3.1-1-2 are to be applied before the credit provided by this chapter. (11) "Tax credit application" means an application submitted by an eligible applicant to the authority under section 7 of this chapter. (12) "Taxpayer" means an individual, a corporation, an S corporation, a partnership, a limited partnership, a limited liability partnership, a limited liability company, or a joint venture. As added by P.L.137-2022, SEC.52. Amended by P.L.194-2023, SEC.22.

Ind. Code § 6-3.1-35-3 Amount of credit; computation

Sec. 3. (a) Except as otherwise provided in this chapter, for each taxable year in the state tax credit period of a qualified project, the holder of a state tax credit awarded under this chapter for the qualified project is entitled to a credit against the holder's state tax liability for the taxable year in an amount equal to: (1) the percentage of the state tax credit for the taxable year that the holder retains at the end of the last day of the taxable year, as determined under subsection (c); multiplied by (2) the amount of the state tax credit for the qualified project for the taxable year, as determined under subsections (d) and (e). (b) At the time an eligibility statement is issued to an eligible applicant, the eligible applicant is considered to have acquired one hundred percent (100%) of the state tax credit for each taxable year in the state tax credit period of the qualified project. (c) The percentage of a state tax credit for a taxable year that a holder retains at the end of the last day of a taxable year under subsection (a)(1) is equal to: (1) the sum of the percentages of the state tax credit for the taxable year that the holder acquires before the end of the last day of the taxable year; minus (2) the sum of the percentages of the state tax credit for the taxable year that the holder transfers before the end of the last day of the taxable year. (d) The amount of a state tax credit for a taxable year in the state tax credit period of a qualified project under subsection (a)(2) is equal to: (1) a factor equal to: (A) one (1); divided by (B) the number of taxable years in the state tax credit period for the qualified project; multiplied by (2) the lesser of: (A) the amount of the total federal credit allowed for the qualified project over the credit period as defined by Section 42(f) of the Internal Revenue Code (based on Internal Revenue Service Form 8609, Line 1(b) (annual amount multiplied by ten (10) years)), if available, for the qualified project; or (B) the maximum aggregate amount of state tax credits awarded for the qualified project, as stated in the eligibility statement issued under section 7 of this chapter. (e) The department shall determine the amounts of the state tax credits specified under subsection (d) for each taxable year in the state tax credit period of each qualified project as those amounts are able to be computed and promptly publish the amounts on the department's website to assist holders in claiming the state tax credit provided by this chapter. As added by P.L.137-2022, SEC.52. Amended by P.L.194-2023, SEC.23.

Ind. Code § 6-3.1-35-4 Credit carryover

Sec. 4. (a) If a holder's state tax credit exceeds the holder's state tax liability for the taxable year, the excess may be carried forward for up to nine (9) consecutive taxable years immediately following the first taxable year of the holder's state tax credit period and may be used to reduce the holder's state tax liability during those taxable years. Only the unused part of a state tax credit may be carried forward and used in a subsequent taxable year. (b) The holder of a state tax credit is not entitled to a carryback or refund of any unused credit. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-5 Allocation of the credit by pass through entities that do not have state tax liability

Sec. 5. (a) If a pass through entity is entitled to a state tax credit but does not have state tax liability against which the state tax credit may be applied, the pass through entity may allocate or otherwise transfer the state tax credit among the shareholders, members, or partners of the pass through entity in any manner agreed to by the shareholders, members, or partners, regardless of how the federal tax credit for the qualified project is allocated or transferred or whether the allocation or transfer of the state tax credit under the agreement has substantial economic effect under Section 704(b) of the Internal Revenue Code. A pass through entity or its designee shall certify to the department the amount of the state tax credit that is allocated or transferred to each shareholder, member, or partner of the pass through entity for the taxable year, if any, in the manner prescribed by the department. (b) The credit provided under subsection (a) is in addition to a state tax credit to which a shareholder, member, or partner of a pass through entity is otherwise entitled under this chapter. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-6 Credit assignment

Sec. 6. (a) A holder of a state tax credit may transfer, sell, or assign all or part of a state tax credit for a taxable year in the state tax credit period of the associated qualified project if the holder of the state tax credit complies with this section. (b) A holder shall furnish the following to the transferee, purchaser, or assignee: (1) A copy of the eligibility statement for the qualified project. (2) A declaration, on a form prescribed by the department, that states: (A) the percentage of the state tax credit for the taxable year that was held by the transferor before the transfer; (B) the percentage of the state tax credit for the taxable year that will be held by the transferor after the transfer; (C) the percentage of the state tax credit for the taxable year that will be held by the transferee after the transfer; and (D) any other information required by the department. The percentage specified in clause (A) must equal the sum of the percentages specified in clauses (B) and (C). (3) Copies of other documents in the possession of the transferor that relate to the transferor's right to claim the state tax credit provided by this chapter, if any. (c) A transferor of all or part of a state tax credit for a taxable year under this section shall report the transaction to the department in the manner prescribed by the department. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-7 Requirements to be awarded a credit; maximum amount of credits

Sec. 7. (a) An eligible applicant who wishes to obtain the state tax credit provided by this chapter for a qualified project must submit an application to the authority after June 30, 2023, and before January 1, 2033, in the manner prescribed by the authority. (b) An application submitted under subsection (a) must include: (1) the name and address of the qualified project; (2) the name and address of the owner of the qualified project; and (3) any other information required by the authority. (c) Subject to section 8 of this chapter, the authority may approve a tax credit application if: (1) the applicant is an eligible applicant; (2) the project identified in the application is a qualified project; and (3) the tax credit application meets any other requirements for receipt of state tax credits established by the authority. (d) If the authority approves a tax credit application for a qualified project, for each taxable year in the tax credit period the authority may approve a maximum amount of state tax credits. The maximum aggregate amount of state tax credits awarded by the authority for the state tax credit period of a qualified project is an amount that is the product of: (1) a percentage determined by the authority, which must be less than or equal to one hundred percent (100%); multiplied by (2) the anticipated aggregate federal tax credits over the credit period as defined by Section 42(f) of the Internal Revenue Code and specified in a letter issued by the authority for the qualified project under Section 42(m) of the Internal Revenue Code (annual amount multiplied by ten (10) years). (e) If the authority approves a tax credit application for a qualified project, the authority shall issue an eligibility statement to the eligible applicant. The eligibility statement must specify at least the following: (1) A unique identification code for the eligibility statement, determined by the authority. (2) The name of the qualified project. (3) For each taxable year in the state tax credit period of the qualified project, the maximum amount of state tax credit that the authority is awarding to the eligible applicant for the qualified project. (f) The authority shall transmit a copy of each eligibility statement issued under subsection (e) to the department. As added by P.L.137-2022, SEC.52. Amended by P.L.194-2023, SEC.24; P.L.114-2026, SEC.5.

Ind. Code § 6-3.1-35-8 Annual aggregate credit limit

Sec. 8. (a) For each state fiscal year beginning after June 30, 2023, and before July 1, 2033, the aggregate amount of state tax credits awarded by the authority under this chapter may not exceed thirty million dollars ($30,000,000). For purposes of calculating the aggregate state tax credit limit for a state fiscal year, the amounts awarded by the authority are considered to be awarded in the year the award is made to the state tax credit recipient by the authority, notwithstanding the fact that the awarded state tax credit is to be claimed over the state tax credit period. (b) To the extent that the tax credit applications requesting state tax credits exceed the amount of available state tax credits in a year, or the authority reasonably anticipates that the requests will exceed the state fiscal year limitation established in subsection (a), the authority may allocate the state tax credits in a manner that furthers the mission and purpose of the authority and otherwise promotes the establishment of qualified projects. As added by P.L.137-2022, SEC.52. Amended by P.L.114-2026, SEC.6.

Ind. Code § 6-3.1-35-9 Procedures to claim a credit

Sec. 9. To receive the state tax credit provided by this chapter, a holder of a state tax credit must claim the credit on the holder's annual state tax return in the manner prescribed by the department. The holder of the state tax credit shall submit to the department all information that the department determines is necessary for the calculation of the state tax credit. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-10 Rules

Sec. 10. The department or the authority, or both, may adopt rules to implement this chapter. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-11 Evaluation of the effectiveness of the credit

Sec. 11. This chapter is subject to review under IC 2-5-3.2-1 to evaluate the effectiveness of the state tax credit one (1) year prior to its expiration under section 12 of this chapter. As added by P.L.137-2022, SEC.52.

Ind. Code § 6-3.1-35-12 Expiration of chapter

Sec. 12. This chapter expires July 1, 2033. As added by P.L.137-2022, SEC.52. Amended by P.L.114-2026, SEC.7.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://iga.in.gov/laws/2026/ic/titles/6Fetched: 10/17/2026