Indiana Schedule LIC is used to claim the Enterprise Zone Loan Interest Tax Credit, a state credit that provides taxpayers with 5% of interest income received from qualified loans made to businesses or residential properties within designated enterprise zones. The form ensures that lenders or other eligible taxpayers can document loans and claim credits properly against Indiana state tax liabilities. By filing Schedule LIC, taxpayers report qualified loans, interest income, and calculate the credit amount that can offset adjusted gross income tax, insurance premium tax, nonprofit agricultural organization health coverage tax, or financial institutions tax. Properly completing the form protects your eligibility and ensures accurate reporting for both business and nonbusiness loans related to enterprise zone improvements.

What Is Schedule LIC?

Schedule LIC is a state tax form used by Indiana taxpayers to claim credits for interest received on qualified loans made to enterprise zone businesses or for residential improvements within enterprise zones. This form documents each loan, the borrower’s information, the interest earned, and calculates the allowable 5% tax credit. Taxpayers may also carry forward unused credits for up to 10 years. Eligible entities include individuals, businesses, and certain pass-through entities that meet Indiana’s criteria for operating within enterprise zones. Filing Schedule LIC allows the credit to be applied to multiple types of Indiana state taxes in accordance with state law.

How To File Schedule LIC

Completed Schedule LIC should be enclosed with your annual state tax return. If you are a business lender, ensure you attach all supporting borrower listings and additional sheets as needed. After completion, mail or electronically submit the schedule along with your return to the Indiana Department of Revenue at the Returns Processing Center. Include all necessary supporting documentation to avoid processing delays.

How To Complete Schedule LIC: Line-By-Line Instructions

Section A – Taxpayer Information

1. Name of Taxpayer (Lender) – Enter the full legal name of the individual or business claiming the credit.
2. Social Security Number or FEIN – Provide either the taxpayer’s SSN or Federal Employer Identification Number.
3. Street Address – Enter the primary address for the taxpayer.
4. County – Fill in the Indiana county or indicate O.O.S. for out-of-state taxpayers.
5. City or Town, State, and ZIP Code – Complete mailing address.
6. Taxpayer’s Telephone Number – Provide a current contact number.

Section B – Qualified Loan Information

For each qualified loan or provide a combined listing of borrowers:

1. Name of Borrower – Enter each borrower’s full name.
2. Borrower’s SSN or FEIN – Include their Social Security or Federal Identification Number.
3. Street Address – Provide borrower’s address.
4. City, State, ZIP Code – Include the complete mailing address.
5. Use of Loan – Check Business or Personal (for home improvement loans).
6. Date of Loan Origination – Enter the date the loan was made.
7. Location Name of Borrower’s Enterprise Zone – Indicate which enterprise zone the borrower’s property or business is located in.

Attach additional sheets if necessary to list all borrowers.

Section C – Report of Qualified Loans to Businesses by Enterprise Zone Locations

1. Enterprise Zone – List each enterprise zone where loans are located.
2. Number of Loans – Enter total loans made in each zone.
3. Interest Income – Enter interest income received from those loans.
4. Repeat for multiple zones – Fill columns for all zones relevant to your loans.
5. Subtotal – Calculate subtotals for each group of zones to simplify reporting.

Section D – Credit for Qualified Loans for the Taxable Year

1. Line 1 – Grand Total of Loans – Add all qualified loans listed in Section C.
2. Line 2 – Total Interest Income from Business Loans – Enter total interest income from qualified business loans.
3. Line 3 – Interest from Nonbusiness Loans – Include interest from home improvement or other residential loans within enterprise zones.
4. Line 4 – Total Loan Interest Credit – Add lines 2 and 3, multiply by 5% (.05).
5. Line 5 – Tax Type Offset – Indicate which tax you are offsetting (Adjusted Gross Income Tax, Insurance Premium Tax, or Financial Institutions Tax) and enter the net amount being offset.
6. Line 6 – Unused Credit – Subtract line 5 from line 4. If there’s excess, carry it to Section E.

Section E – Enterprise Zone Loan Interest Credit Carryover

1. Initial Tax Year Ending – Enter the tax year when the credit was first claimed.
2. Enterprise Zone Loan Interest Credit Available for Carryforward – Enter the unused credit from Section D, line 6.
3. Credit Carryforward Table – For up to 10 future tax years:
   • Column (1) – Credit Carryforward Year
   • Column (2) – Total Amount of Tax
   • Column (3) – Type of Tax Liability Reduced
   • Column (4) – Amount Applied
   • Column (5) – Remaining Unused Credit

Carryforward credits must be applied in order and may not exceed the remaining unused credit.

Section F – Signature

1. Signature of Taxpayer – Sign to certify the accuracy of the schedule.
2. Title – Enter your position if signing on behalf of a business or organization.
3. Date Signed – Include the date you completed the form.

Tips For Accurate Submission

• Ensure all borrower information matches legal records.
• Verify interest amounts for accuracy.
• Attach additional sheets for multiple borrowers to avoid errors.
• Keep a copy of the completed form and any supporting documents.
• Apply unused credits carefully in Section E to prevent discrepancies.

FAQs

Q: Who can file Schedule LIC?
A: Lenders or taxpayers receiving interest from qualified loans within Indiana enterprise zones.

Q: Can the credit be carried over?
A: Yes, unused credit may be carried forward up to 10 years.

Q: What loans qualify for this credit?
A: Loans made to businesses in enterprise zones or for residential improvements in enterprise zones.

Q: Where do I submit Schedule LIC?
A: Include the completed schedule with your annual Indiana state tax return.

Q: Which taxes can this credit offset?
A: Adjusted Gross Income Tax, Insurance Premium Tax, Nonprofit Agricultural Organization Health Coverage Tax, and Financial Institutions Tax.