Schedule IN-CR

This article provides a detailed, step-by-step guide on how to complete Schedule IN-CR, a required form used to recapture previously claimed Indiana offset tax credits that are no longer valid. It explains what the form is, how to file it, and offers clear, line-by-line instructions to ensure accuracy and compliance.

Schedule IN-CR, also called the Credit Recapture Form, is issued by the Indiana Department of Revenue and is used to repay or “recapture” certain tax credits that were previously claimed but are no longer valid due to specific circumstances. Taxpayers who have claimed offset (non-refundable) credits such as the ABLE 529A Account Credit, Indiana529 Education Savings Plan Credit, or Residential Historic Rehabilitation Credit, among others, must use this form if they need to repay part or all of the previously claimed credits.

The reasons for recapture vary but often involve non-qualified withdrawals, changes in ownership, improper use of funds, or failure to meet specific requirements tied to the original credit. The form ensures that taxpayers properly account for any credits they owe back to the state and is filed alongside Form IT-40 or IT-40PNR.

The calculation for recapture depends on the type of credit, the amount originally claimed, and any relevant penalties. It’s important to complete this form correctly to avoid further penalties or delays in processing your tax return.

How to File Schedule IN-CR

  1. Obtain the Form: Download the most recent version of Schedule IN-CR from the Indiana Department of Revenue website.
  2. Collect Required Documentation: Gather all records related to the credits being recaptured, including account numbers, certification numbers, and amounts.
  3. Complete the Form: Follow the step-by-step instructions outlined below to fill out each section of the form accurately.
  4. Attach to Your Tax Return: Enclose Schedule IN-CR with your Form IT-40 (Full-Year Resident) or Form IT-40PNR (Part-Year or Nonresident).
  5. Retain a Copy: Keep a copy of the completed form and all supporting documentation for your records.
How to Complete Schedule IN-CR

How to Complete Schedule IN-CR

Below is a comprehensive breakdown of each section and line on the form. Carefully follow these instructions to ensure accuracy.

Header Section

  • Name(s) Shown on Form IT-40/Form IT-40PNR: Enter the name(s) exactly as they appear on your tax return.
  • Your Social Security Number: Provide your Social Security Number (SSN).

Columns A Through E

This section is used to calculate the amount of offset credit that needs to be recaptured. You may include up to eight credits on this form. If you have more than eight credits to report, attach additional sheets.

Column A: Enter Offset Credit Name

  • Identify the specific credit being recaptured. Indiana recognizes five credits that may require recapture:
    • ABLE 529A Account Credit
    • Employer Child Care Expenditure Credit
    • Indiana529 Education Savings Plan Credit
    • Physician Practice Ownership Tax Credit
    • Residential Historic Rehabilitation Credit

Column B: Place “X” in Box if K-12 Credit

  • If the recapture involves a K-12 contribution to the Indiana529 Education Savings Plan, check the box in this column. Leave this column blank for all other credits.

Column C: Account Number, Certification Number, etc.

  • Include all relevant account or certification numbers for the credit being recaptured. For example:
    • ABLE 529A Account Credit: Enter the account number.
    • Indiana529 Education Savings Plan Credit: Enter the account number.
    • Physician Practice Ownership Tax Credit: Include the license number.
    • Residential Historic Rehabilitation Credit: Enter the certification number.

Column D: Offset Credit 3-Digit Code

Use the 3-digit code associated with the offset credit being recaptured. The codes are:

  • 872: ABLE 529A Account Credit
  • 876: Employer Child Care Expenditure Credit
  • 837: Indiana529 Education Savings Plan Credit
  • 880: Physician Practice Ownership Tax Credit
  • 831: Residential Historic Rehabilitation Credit

Column E: Amount of Offset Credit to Be Recaptured

Calculate the amount of credit recapture based on the type of credit:

  • ABLE 529A Account Credit: Multiply non-qualified withdrawals by 20% (0.20).
  • Indiana529 Education Savings Plan Credit: Multiply non-qualified withdrawals by 20% (0.20).
  • Employer Child Care Expenditure Credit: Enter the total amount of credits previously claimed.
  • Physician Practice Ownership Tax Credit: Enter the total amount of credits previously claimed.
  • Residential Historic Rehabilitation Credit: Enter the total amount of credits previously claimed.

Example: If a taxpayer made $1,000 in non-qualified withdrawals from an Indiana529 Education Savings Plan, they would calculate $1,000 × 20% = $200 and enter $200 in Column E.

Line 9: Total Amount Recaptured

  • Add all amounts in Column E (Lines 1 through 8).
  • Enter the total on Line 9.
  • Transfer this amount to Form IT-40 Schedule 4, Line 3, or Form IT-40PNR Schedule E, Line 3.

Filing Requirements

  1. Electronic Filing: If filing electronically, retain a copy of Schedule IN-CR for your records. The Indiana DOR may request it at a later date.
  2. Paper Filing: If filing by paper, enclose Schedule IN-CR with your Form IT-40 or IT-40PNR.

Examples of Credit Recapture Situations

  1. ABLE 529A Account Credit: A taxpayer withdraws $5,000 from an ABLE account for non-qualified expenses. They multiply $5,000 × 20% = $1,000 and report $1,000 as the amount to be recaptured.
  2. Indiana529 Education Savings Plan Credit: A taxpayer makes $800 in non-qualified withdrawals. They multiply $800 × 20% = $160 and report $160 as the recapture amount.
  3. Residential Historic Rehabilitation Credit: A taxpayer sells a rehabilitated property within five years of receiving the credit. They must repay the full amount of the credit, which is entered in Column E.
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