Indiana Current Year Corporate Adjusted Gross Income Tax Booklet with Forms and Schedules

Current Year Corporate Adjusted Gross Income Tax Booklet with Forms and Schedules
IT-20 Corporate Income Tax Booklet
INDIANA

2 0 2 3

IT-20 CORPORATE
Income Tax Booklet

Page 2

IT-20 Corporate Booklet 2023

SP 259
(R24 / 12-23)

INDIANA IT-20 CORPORATE
Income Tax Booklet Year 2023 & Fiscal Years Ending in 2024
Contents

What’s New for 2023...............................................................................................................................................................4
General Information...............................................................................................................................................................4
Introduction to Corporate Taxation.....................................................................................................................................4
General Filing Requirements.................................................................................................................................................4
Business Entities (in General)................................................................................................................................................5
General Filing Requirements for Form IT-20.....................................................................................................................6
Mailing Options.....................................................................................................................................................................12
Instructions for Completing Form IT-20...........................................................................................................................12
Certification of Signatures and Authorization Section....................................................................................................23
Mailing Options.....................................................................................................................................................................23
Specific Instructions for Completing IT-20, Schedule E .................................................................................................23
Specific Instructions for Completing Schedule IT-20PIC...............................................................................................25
Specific Instructions for Completing Form IT-20, Schedule F.......................................................................................25
Specific Instructions for Completing Schedule IT-2220..................................................................................................26
Instructions for Schedule IT-20NOL..................................................................................................................................27
About Other Tax Liability Credits.......................................................................................................................................29
Special Reminders.................................................................................................................................................................34
Additional Information........................................................................................................................................................34

IT-20 Corporate Booklet 2023

Page 3

INTIME e-Services Portal Available

INTIME, DOR’s e-services portal, available at intime.dor.in.gov,
provides the following functionalities for IT-20 customers:
•	 Make payments using a bank account or credit card
•	 View and respond to correspondence from DOR
•	 Request and print return transcripts on-demand
•	 Electronic delivery of correspondence
•	 Online customer service support through secure messaging

Increased Online Support for Tax Preparers

In addition to the functionality listed above, INTIME provides
increased access and functionality for tax preparers. INTIME
provides the following functionality for tax preparers:
•	 Gain access to view and manage multiple customers under
one login
•	 Ability to file returns, make payments, and view file and pay
history for clients
•	 Request electronic power of attorney (ePOA) authorization to
view customer accounts
•	 View and respond to correspondence for clients
We strongly encourage all taxpayers to make payments and file
returns electronically whenever possible. INTIME also allows
customers to make estimated payments electronically with just a
few clicks.

What’s New for 2023
References to the Internal Revenue Code

The definition of adjusted gross income (AGI) is updated to
correspond to the federal definition of adjusted gross income
contained in the Internal Revenue Code (IRC). Any reference to
the IRC and subsequent regulations means the Internal Revenue
Code of 1986, as amended and in effect on January 1, 2023. For a
complete summary of new legislation regarding taxation, please see
the Synopsis of 2023 Legislation Affecting the Indiana Department of
Revenue at www.in.gov/dor/files/2023-legislative-synopsis.pdf.

•	
•	

A new deduction (640) is available to allow the deduction
of grants and forgiven indebtedness related to broadband
grants. See page 17 for more information.
A new deduction (641) is available to permit a current-year
deduction for specified research and experimental expenses
otherwise required to be amortized for federal tax purposes.
See page 17 for more information.

General Information
Electronic Filing for Certain Corporations

For all taxable years ending after December 31, 2022, a corporation
with more than $1,000,000 in gross income for federal purposes
is required to file its IT-20 electronically. In addition, if the
corporation files an amended return, the corporation must file the
amended return electronically if its federal gross income is greater
than $1,000,000.

Annual Public Hearing

In accordance with the Indiana Taxpayer Bill of Rights, the Indiana
Department of Revenue (DOR) will conduct an annual public
hearing in Indianapolis in June of 2024. Event details will be listed
at www.in.gov/dor/news-media-and-publications/dor-publicevents/annual-public-hearings. Please come and share feedback
or comments about how DOR can better administer Indiana tax
laws. If not able to attend, please submit feedback or comments in
writing to: Indiana Department of Revenue, Commissioner’s Office
MS #101, 100 N. Senate Avenue, Indianapolis, IN 46204.

Introduction to Corporate Taxation

Add-Backs

Indiana has two kinds of corporate income tax:
1.	 A corporation doing business in Indiana is subject to the
Adjusted Gross Income (AGI) tax. Any corporation earning
income from Indiana sources is also subject to the AGI tax.
2.	 Any entity transacting the business of a financial institution in
Indiana is subject to a Financial Institutions franchise tax (FIT).
Taxpayers subject to the FIT are exempt from the AGI tax.

•	

Indiana recognizes a variety of business organizations. How the
business is organized determines the type of tax return(s) it must
file. It is important to know the tax-related requirements before
establishing operations in Indiana.

•	

A new add-back (153) has been added for certain
modifications related to net operating losses permitted as
a result of excess inclusion income. See page 16 for more
information.
A new add-back (154) is available for specified research and
experimental expenses required to be amortized for federal
income tax purposes. See page 16 for more information.

General Filing Requirements

Credits
•	

A new credit (874) is available for qualified investments at a
mine reclamation site. See page 32 for more information

Deductions
•	

A new deduction (639) is available to allow the deduction
for the portion of small employer health insurance premiums
that is disallowed for federal purposes as a result of claiming
the credit under IRC section 45R. See page 17 for more
information.

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IT-20 Corporate Booklet 2023

All types of corporations, business corporations, professional
corporations, C corporations, and S corporations have essentially
the same filing requirements despite having different tax
responsibilities. Any corporation doing business and having gross
income in Indiana must file a corporate income tax return. This
must be done regardless of the presence of taxable income (unless
exempt under IRC section 501).

Taxable Period

Indiana tax law requires all corporations to adopt the corporation’s
federal tax year for reporting income to Indiana. A federal entity
election or default classification is recognized for state AGI tax.

Doing Business in Indiana

For Indiana AGI tax purposes, the term doing business generally
means the operation of any business enterprise or activity in
Indiana, including but not limited to the following:
•	 Maintenance of an office, a warehouse, a construction site, or
another place of business in Indiana;
•	 Maintenance of an inventory of merchandise or material for
sale, distribution, or manufacture;
•	 Sale or distribution of merchandise to customers in Indiana
directly from company-owned or -operated vehicles when
the title of merchandise is transferred from the seller or
distributor to the customer at the time of sale or distribution;
•	 Rendering of a service to customers in Indiana;
•	 Ownership, rental, or operation of business or property (real
or personal) in Indiana;
•	 Acceptance of orders in Indiana with no right of approval or
rejection in another state;
•	 Interstate transportation; or
•	 Maintenance of a public utility.

Deriving Income from Indiana Sources

If a corporation has business income both within and outside
Indiana, the entity must apportion its income using the singlefactor receipts formula under IC 6-3-2-2. Business income is all
income that is apportionable to Indiana under the constitution of
the United States. Nonbusiness income is all income other than
business income. Nonbusiness income is specifically allocated
under IC 6-3-2-2(g) through (k).

Business Entities (in General)
Which Indiana Income Tax Form(s) to File?

The type of form filed varies depending on how the corporation is
organized and the type of income it earns. An organization filing
a federal return and doing business in Indiana must also file the
comparable Indiana return. The name of the corporation (which
must include the word Corporation, Company, Incorporated,
Limited, or an abbreviation thereof) must be included on all
returns. When filing Indiana corporate forms, use the federal
employer identification number (FEIN) to identify the return.
The IRS assigns this number to business entities at www.irs.gov/
businesses/small-businesses-self-employed.
Our homepage provides access to forms, information bulletins
and directives, tax publications, email, and various filing options.
Visit www.in.gov/dor.
Unless otherwise specified, state tax returns are due on the 15th
day of the 5th month following the close of the corporation’s
taxable year. Indiana recognizes federal extensions of time to file.

Types of Corporate Entities and Returns to File

Nonprofit entities can be organized formally or informally.
Contact the Internal Revenue Service for the federal requirements
to obtain nonprofit (commonly known as 501(c)(3)) status. The
IRS publishes an information booklet titled Tax Exempt Status for
Your Organization, Publication 557. Contact:
Internal Revenue Service: (800) 829-1040
Publications: (800) 829-3676
www.irs.gov
To register for nonprofit status with the state, submit a Nonprofit
Organization Application for Sales Tax Exemption (NP-20A,
which may be accessed here: www.in.gov/dor/tax-forms/
nonprofit-tax-forms). Contact:
Indiana Department of Revenue
Tax Administration
P.O. Box 6197
Indianapolis, IN 46207-6197
317-232-0129

For-Profit Corporations (Domestic and Foreign)

A corporation can be formed for profit or nonprofit purposes.
Forming a corporation creates a specific legal entity. An
organization incorporated in this state (a domestic corporation)
must have Articles of Incorporation 4159 on file with the
Corporations Division of the Indiana Secretary of State.
An organization incorporated in another state or with a foreign
government must have an Application for Certificate of Authority
38784 on file with the Indiana Secretary of State. This allows a
foreign (outside Indiana) corporation to do business in Indiana.
For Indiana tax purposes, a corporation’s tax filing includes other
less formal organizations and unincorporated entities, such as
general partnerships and nonprofit associations. To determine
which return to file, use the following list. File the specified state
form(s) to report the income, gains, losses, deductions, and credits.
Note A. A limited liability company (LLC) may be classified for
federal income tax purposes as a partnership, a corporation, or an
entity disregarded as an entity separate from its owner by applying
the rules in federal regulation section 26 CFR 301.7701-3. An
LLC has members rather than shareholders. If an entity with more
than one member was formed as an LLC, it generally is treated
as a partnership for federal income tax purposes. It therefore files
Federal Form 1065 and Indiana Form IT-65.
Single-member LLC reporting defaults to disregarding the LLC as
an entity separate from its sole member. The income and expenses
of the LLC are included in the return filed by the member.
Either a single-member LLC or a multi-member LLC may elect
to report its income and deductions as a corporate entity instead.
The LLC can file a Form 1120 or Form 1120-A only if it has filed
federal Form 8832, Entity Classification Election, to be treated as
a corporation. If this election is made for federal tax purposes, the
LLC will file Form 1120 and Indiana’s return, Form IT-20.
An LLC can be formed under state law by filing Articles of
Organization with the Secretary of State. An LLC based outside
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IT-20 Corporate Booklet 2023

of Indiana must file an Application for Certificate of Authority of
a Foreign Limited Liability Company to do business in Indiana,
similar to what foreign corporations file. If the LLC qualifies
under IRS guidelines to be treated as an association taxable as a
corporation, it must file Form IT-20.
Note B. A limited liability partnership (LLP) can be classified
for federal income tax purposes as a partnership, a corporation,
or an entity disregarded as an entity separate from its owner by
applying the rules in federal regulation section 26 CFR 301.77013. The income of an LLP is taxed in the same way as a general
partnership’s income is taxed.
An LLP can be formed under state law by filing Articles of
Registration of a Limited Liability Partnership with the Secretary
of State. An LLP based outside of Indiana must file a Certificate of
Authority or Notice of Foreign Limited Liability Partnership to do
business in Indiana, similar to what foreign corporations file.
Note C. A limited partnership (LP) must have at least one general
partner and one limited partner. The income is generally taxed
in the same manner as a general partnership’s income. An LP can
be classified for federal income tax purposes as a partnership, a
corporation, or an entity disregarded as an entity separate from
its owner by applying the rules in federal regulation section 26
CFR 301.7701-3. The LP can be formed under state law by filing a
Certificate of Limited Partnership with the Secretary of State. An
LP based outside of Indiana must file a Certificate of Authority or
Application of Registration to do business in Indiana, similar to
what foreign corporations file.

General Filing Requirements for
Form IT-20
What to Enclose with a State Corporate Return

To complete a state income tax return, enclose copies of pages 1
through 5 of the completed U.S. Corporation Income Tax Return
(Form 1120) or the comparable federal return being filed. The
federal Schedule M-3 and any confirmation of an extension of
time to file the return must also be included.

Electronic Filing Requirements

If a corporation has more than $1,000,000 in gross income for
the taxable year, the corporation generally is required to file the
return (or, if applicable, an amended return) through Modernized
e-File (MeF) using certified software. Failure to comply could
result in a penalty of 10% of the tax due. Certain exceptions to the
electronic filing requirement apply; see Income Tax Information
Bulletin #12 available at www.in.gov/dor/files/reference/ib12.pdf
for more information on exceptions.

Adjusted Gross Income Tax

The Indiana AGIT is generally calculated using federal taxable income
from federal Form 1120 or a comparable return and making Indiana
modifications as required by IC 6-3-1-3.5(b). If there is income from
sources both within and outside Indiana, use the apportionment and
allocation formula on Form IT-20 Schedule E to determine the AGI
that’s attributed to Indiana. The corporate AGI tax rate is 4.9%.
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IT-20 Corporate Booklet 2023

Extensions for Filing Return

DOR accepts the federal extension of time application (Form
7004) or the federal electronic extension. If already approved for
a federal extension of time application (Form 7004) or the federal
electronic extension, it is not necessary to contact DOR before
filing the annual return. Returns postmarked within one month
after the last date indicated on the federal extension are considered
timely filed. If a corporation does not need a federal extension of
time but needs one for filing a state return, an extension request
and prepayment of 90% can be submitted via INTIME, DOR’s
e-services portal at intime.dor.in.gov, or by submitting a letter
requesting an extension prior to the annual return’s due date.
To request an Indiana extension of time to file by letter, contact:
Indiana Department of Revenue
Corporate Income Tax
Tax Administration
P.O. Box 7206
Indianapolis, IN 46207-7206
An extension of time granted under IC 6-8.1-6-1 waives the
late payment penalty for the extension period on the balance of
tax due, if at least 90% of the tax due is paid by the original due
date and the remaining balance, plus interest, is paid in full by
the extended due date. Use DOR’s e-services portal, INTIME, at
intime.dor.in.gov and Form IT-6 to make an extension payment
for the taxable year. See Income Tax Information Bulletin #15 at
www.in.gov/dor/files/reference/ib15.pdf for more details. Any tax
paid after the original due date must include interest.
Interest on the balance of tax due must be included with the
return when it is filed. Interest is computed from the original due
date until the date of payment. Each October DOR establishes the
interest rate for the next calendar year. See Departmental Notice
#3 available at www.in.gov/dor/files/dn03.pdf for interest rates.
If a valid extension of time or a federal extension to file is
approved, please check the box for line V on the front of the
return. If applicable, enclose a copy of the federal extension of
time with the state return.

Accounting Methods and Taxable Year

Use the same method of accounting for the AGIT that was used
for federal income tax purposes. The taxable year for the AGIT
must also be the same as the accounting period used for federal
income tax purposes. If the standard apportionment provisions
do not fairly reflect Indiana income, DOR must be petitioned
for permission to use an alternative method. For an overview
of corporate taxation, see Income Tax Information Bulletin #12
available at www.in.gov/dor/files/reference/ib12.pdf.

Consolidated Reporting

Under the Adjusted Gross Income Tax Act, affiliated corporations
have the privilege of electing to file a consolidated return. This is
provided in IRC Section 1502 for those affiliates as defined in IRC
Section 1504. The Indiana consolidated return must include any
member of the affiliated group under IRC Section 1504 having
income or loss attributable to Indiana during the year.

Type of Entity

Federal Form
Filed or
Requirement

Federal 1120

Indiana
Form

IT-20

Due Date

Miscellaneous Information

15th day of the 5th
month following close
of the taxable year

FIT-20

15th day of the 5th
month following close
of the taxable year

If 80% or more of the taxpayer’s gross income
comes from extending credit, servicing loans,
or a credit card operation, the FIT applies (see
45 IAC 17-2-4). See General Tax Information
Bulletin 200 at www.in.gov/dor/files/reference/
gb200.pdf.

IT-20

15th day, 10th month
following close of taxable
year

Check the appropriate box to question J on
Page 1 to indicate if it is necessary to file a
1120-C

IT-20

15th day of the 5th
month following close
of the taxable year

IT-20

15th day of the 5th
month following close
of the taxable year

Federal 1120-FSC IT-20

15th day of the 5th
month following close
of the taxable year

Homeowner’s
Association

Federal 1120-H

IT-20

15th day of the 5th
month following close
of the taxable year

Interest Charge
Domestic
International Sales
Corporation

Federal
1120-IC-DISC

IT-20

15th day, 10th month
following close of
taxable year

General or Regular
Corporation
Financial
Institution Tax
Cooperative
Association

Federal 1120-C

Corporation Engaged
in Farming
Federal 1120
Foreign Corporation
Foreign Sales
Corporation

Federal 1120 or
1120-F

Limited Liability
Company

Federal 1065 or
1065B

Federal 1120

Limited Liability
Partnership

Federal 1065 or
1065-B

Federal 1120

Not considered nonprofit organization for
Indiana tax purposes.

IT-20

15th day of the 5th
month following close
of the taxable year

A domestic insurance company organized
under the laws of the state of Indiana that
elects to file the corporation income tax return
instead of the insurance premium tax return
must file Form IT-20 and mark the appropriate
check box to question J on page 1 of the return.
It will be exempt from the insurance premium
tax if it elects to pay the AGIT.

IT-65

15th day of the 4th
month following close
of the taxable year

See page 5

IT-20

15th day of the 5th
month following close
of the taxable year

IT-65

15th day of the 4th
month following close
of the taxable year

IT-20

15th day of the 5th
month following close
of the taxable year

Life Insurance
Company
Federal 1120-L

If no U.S. address then the due date is the 15th
day of the 7th month following the close of the
taxable year.

See page 6

IT-20 Corporate Booklet 2023

Page 7

Type of Entity

Limited Partnership

Federal Form
Filed or
Requirement

IT-65

IT-20

15th day of the 5th
month following close
of the taxable year

Federal 1120-ND IT-20

15th day of the 5th
month following close
of the taxable year

Political Organization Federal 1120POL

IT-20

Federal 1120-PC

Federal 1065 or
1065B

Federal 1120

IT-65

15th day of the 4th
month following close
of the taxable year

IT-20

15th day of the 5th
month following close
of the taxable year

IT-20

IT-20

15th day of the 5th
month following close
of the taxable year

A corporation, a trust, or an association that
meets certain conditions under IRC Section
856 can elect to be treated as a real estate
investment trust (REIT) for the tax year. It does
this by figuring its taxable income as a REIT
on federal Form 1120-REIT. An entity filing
as a REIT files Form IT-20 or Form FIT-20 to
report business activity income in Indiana.

15th day of the 4th
month following close
of the taxable year

A corporation, a partnership, a trust, or an
entity that meets certain conditions under IRC
Section 860D can elect to be treated as a real
estate investment conduit (REMIC) for the tax
year. It does this by figuring its taxable income
as an REMIC on federal Form 1066.

15th day of the 5th
month following close
of the taxable year

A regulated financial corporation, subsidiary
of a holding company, or regulated financial
corporation can elect to be treated as a
regulated investment company (RIC). It
does this by filing Form 1120-RIC. For state
purposes, the RIC must use Form IT-20
or Form FIT-20 to report federal taxable
income, deductions, gains, and losses from the
operation of an RIC in Indiana.

Regulated Investment
Company

Federal 1120-RIC IT-20
Page 8

If nonprofit is filing an 1120-POL, report such
income on IT-20NP, not the IT-20.

A publicly traded partnership (PTP) that
is treated as a partnership and not as a
corporation for federal income tax purposes
must file on Form IT-65. A PTP that is treated
as a corporation for federal income tax
purposes under IRC Section 7704 must file on
Form IT-20.

IT-20

Real Estate Mortgage
Investment Conduit
Federal 1066

See page 6

15th day of the 5th
month following close
of the taxable year

Real Estate
Investment Trust
Federal 1120REIT

15th day of the 5th
month following close
of the taxable year

Miscellaneous Information

A domestic insurance company organized
under the laws of the state of Indiana that
elects to file the corporation income tax return
instead of the insurance premium tax return
must file Form IT-20 and mark the appropriate
check box to question J on page 1 of the return.
It will be exempt from the insurance premium
tax if it elects to pay the AGIT.

Property & Casualty
Insurance Company

Publicly Traded
Partnership

Due Date
15th day of the 4th
month following close
of the taxable year

Federal 1065 or
1065B

Federal 1120
Nuclear
Decommissioning
Funds

Indiana
Form

IT-20 Corporate Booklet 2023

Type of Entity

Federal Form
Filed or
Requirement

Indiana
Form

Due Date

S Corporation

Federal 1120S
Settlement Fund

Federal 1120-SF

IT-20S

15th day of the 4th
month following close
of the taxable year

IT-20

15th day of the 5th
month following close
of the taxable year

A corporation incorporated in the United
States can elect S corporation treatment. The
corporation must submit IRS Form 2553 to
the IRS for recognition of its status. This is a
separate legal and taxable entity. It can have
no more than 100 owners. An S corporation
is exempt from federal income tax except on
certain capital gains and passive income. Any
income taxed at the corporate level is subject to
the Indiana corporate AGIT.

IT-20NP

15th day of the 5th
month following close
of the taxable year

A nonprofit organization or corporation
must file Form NP-20R and, if reporting
unrelated business income, IT-20NP. After
nonprofit status is granted, the organization
must file Form NP-20R every five years (see
IC 6-2.5-5-25(d) for special rules applicable
for 2024-2027)) to maintain state recognition
of its sales tax exemption. If the organization
has unrelated business income over $1,000
during the tax year, it must also file Form IT20NP. For information about nonprofit filing
requirements, see Income Tax Information
Bulletin #17, available at www.in.gov/dor/files/
reference/ib17.pdf. DOR recognizes the exempt
status determined by the IRS. An organization
registered as a nonprofit is subject to the AGIT
unless the income is specifically exempt from
taxation under the Adjusted Gross Income Tax
Act (IC 6-3-2-2.8 and 6-3-2-3.1). The nonprofit
organization is subject to both federal and state
tax on income derived from an unrelated trade
or business, as defined in IRC Section 513.

Federal 990 or
990T

NP-20R

May 15 every five years
after the formation

For nonprofits that filed an NP-20 in 2023, see
IC 6-2.5-5-25(d) for the due date of the first
NP-20R filing.

Federal 1065

IT-65

15th day of the 4th
month following close

Nonprofit
Organization

Federal 990 or
990T

Religious or Apostolic

Miscellaneous Information

IT-20 Corporate Booklet 2023

Page 9

To file a consolidated return for AGIT purposes, the parent
corporation must own at least 80% of each subsidiary’s voting
stock and own at least 80% of the total value of the stock, either
directly or through a chain of includible corporations. The
affiliated group may not include any corporation that does not
have taxable income or loss from Indiana sources.
To elect to file a consolidated return for Indiana purposes, the
return must be filed by the due date or the extended due date.
An election to file a consolidated return cannot be done on a
retroactive basis. Notify DOR by completing Schedule 8-D,
Schedule of Indiana Affiliated Group Members. Indicate the
affiliated corporations included in the consolidated return.
After an affiliated group elects to file consolidated for Indiana
purposes, it must continue to do so through all subsequent
years of filing. In addition, a worksheet must accompany the
annual return supporting each of the participating affiliates’
information that reconciles to the reported consolidated AGI or
loss. Schedule 8-D is available at www.in.gov/dor/tax-forms/2023corporatepartnership-income-tax-forms.
If a consolidated group has a change in membership (i.e., a
new corporation joins or a corporation leaves), the pre-change
consolidated status of the group will continue absent a request to
change filing status. If a company is acquired by or merges with
another corporation, the consolidated status of the acquiring
corporation controls absent a request to change filing status.
If the group wants to revoke the election in a subsequent tax year,
it must make a request to DOR demonstrating good cause for
the request and receive written permission from DOR prior to
filing the separate returns. The group must make its request to
discontinue filing consolidated at least 90 days before the return’s
due date, or the request will be denied.

Unitary (Combined) Filing Status

A taxpayer must petition DOR for permission to file a combined
income tax return for a unitary group. The petition must be filed
no later than 30 days after the end of the tax year for which the
entity is seeking permission.
Permission will be granted if combined reporting will more fairly
reflect the unitary group’s Indiana source income. However,
combined reporting is limited to the “water’s-edge” of the United
States unless specifically requested and approved otherwise. The
petition may be submitted through the DOR website at www.
in.gov/dor/legal-resources/requesting-policy-guidance or it may
be mailed to:
Indiana Department of Revenue
Tax Policy Division
100 N. Senate Avenue, N 248 MS 102
Indianapolis, IN 46204
Caution. After permission has been granted to file on a combined
basis, the taxpayer must continue to file returns on this basis
until DOR grants permission to use an alternative method. The
taxpayer filing the combined return must petition DOR within
30 days after the end of the tax year for permission to stop filing a
combined return.
Page 10

IT-20 Corporate Booklet 2023

Form IT-20RECAP, Reconciliation of Federal Taxable Income,
must be completed detailing the following:
1.	 The federal taxable income;
2.	 The intercompany eliminations; and
3.	 The members’ adjusted gross income tax.
A list of the corporations that are members of the unitary group
filing for the reporting unitary filer must be enclosed with the
return, noting each entity’s federal employer identification number.
The computation of apportionment factor for the combined group’s
members detailing the apportionment information for each entity
must also be included. Entities that have a sales factor numerator
greater than zero are taxable members. Each taxable member will
be assigned a share of business income according to its relative share
(its percentage share without considering any nontaxable member’s
share) of the unitary group’s Indiana (adjusted) sales factors.
Additional information concerning unitary requirements is available
from the Tax Policy Division at [email protected] or Tax Policy
Directive #6 at www.in.gov/dor/files/reference/poldir06.pdf.

Quarterly Estimated Payments

A corporation with estimated adjusted gross income tax (AGIT)
liability exceeding $2,500 for a taxable year must make quarterly
estimated tax payments. The quarterly estimated tax payments
must be submitted through INTIME, DOR’s e-services portal
at intime.dor.in.gov, by electronic funds transfer (EFT), or by
submitting an appropriate Indiana voucher along with Form IT-6,
depending on the amount due.
The quarterly due dates for estimated payments are the 20th day
of the 4th, 6th, 9th, and 12th months of the taxpayer’s tax period,
regardless of whether filing on a calendar year, fiscal year, or short
year basis. Taxpayers should use the reporting taxpayer’s federal
identification number (FEIN) when remitting payments on behalf
of a group in a consolidated or combined return.
Visit INTIME, DOR’s e-services portal, at intime.dor.in.gov to
make an estimated tax payment or view payment history.
Claim credit for all estimated payments on lines 34 through 36
of Form IT-20. Refunds reflected on the annual corporate return
from overpayments of estimated payments may be applied to the
next taxable year’s estimated liability or refunded directly to the
taxpayer. Apply the overpayments to the next year’s estimated
liability by entering the refund amount to be credited to the next
year’s estimated payments on line 48 of Form IT-20. An election
to apply an overpayment to the following year is irrevocable. If
the overpayment is reduced due to an error on the return or an
adjustment by DOR, the amount to be refunded will be corrected
before any changes are made to the estimated account for next
year. A refund may be offset and applied to other liabilities under
IC 6-8.1-9-2(a) and 6-8.1-9.5 before it is credited to the following
year’s estimated tax account.
The quarterly estimated payment must be equal to the lesser of:
•	 25% of the AGIT liability for the taxable year; or
•	 The annualized income installment calculated in the
manner provided by IRC Section 6655(e) as applied to the
corporation’s liability for AGIT.

Penalty for Underpayment of Estimated Tax

Those required to pay estimated tax are subject to a 10%
underpayment penalty if estimated quarterly payments are not
filed or are not paid in full. The required estimate should exceed:
•	 The annualized income installment calculated in the manner
provided by IRC Section 6655(e) as applied to the liability; or
•	 25% of the final tax liability for the prior taxable year.
If either of these conditions are met, no underpayment of
estimated tax penalty will be assessed for the estimated period.
If taxes were underpaid for any quarter, use Schedule IT-2220 to
show an exception to the penalty. If none of the exceptions are
met, include payment of the computed penalty with the return.
The underpayment penalty is the difference between the amount
paid for each quarter and 25% of the final income tax for the
current tax year. Special rules may apply to short taxable year or
first time filers. See the instructions for completing Schedule IT2220, Penalty for the Underpayment of Corporate Income Tax.

Electronic Funds Transfer Requirements

If the required corporate quarterly estimated payment determined
by DOR exceeds $5,000, the corporation is required to submit the
payment by electronic funds transfer. DOR prefers this be completed
through the e-services portal, INTIME. Failure to submit a required
quarterly payment electronically will result in a penalty of 10%
being assessed at the time the annual income tax return is filed.
The penalty is computed on each payment required to be made
electronically that is instead submitted by another means.
If DOR notifies a corporation that it must remit by EFT, the
corporation must begin remitting tax payments via EFT by the
date/tax period specified by DOR.
DOR also assesses a penalty of $35 on any payment on which it
cannot obtain payment.

Amended Returns

What form should be filed to amend a return? For tax years
beginning prior to January 1, 2019, a taxpayer should file Form
IT-20X to amend a previously filed corporate income tax return.
This form is available at www.in.gov/dor/tax-forms/indiana-stateprior-year-tax-forms/2019-corporatepartnership-income-taxforms. Taxpayers should follow the instructions included with
Form IT-20X. A taxpayer should file Form IT-20X along with
the completed form IT-20 and schedules as amended to amend a
previously filed corporate income tax return.
For tax years beginning on or after January 1, 2019, a taxpayer
should file Form IT-20 for the tax year being amended. For
periods beginning on or after January 1, 2019, a taxpayer should
not use Form IT-20X to file an amended return.
Completing the amended return. To amend a previously filed
Indiana corporate income tax return, Form IT-20 must be completed
with one of the boxes checked at the top of Form IT-20. Check the
first box if the return is being amended for any reason other than
a federal audit. Check the second box if amending the return due
to a federal audit. Complete Form IT-20 with the amended figures.
Taxpayers should refer to the instructions for the corporation income

tax return, and related schedules, of the tax year being amended.
Please enclose a concise explanation of the change(s) along with
corrected schedules and any other documentation. Payment of any
balance due must accompany the amended return.
Indiana Code (IC) 6-3-4-6 requires taxpayers to notify DOR of
any changes (federal adjustment, RAR, etc.) made to a federal
income tax return within 180 days of such change. Federal waivers
should be enclosed, if applicable. Please attach a copy of the
federal RAR and/or federal audit report to the amended return.
IC 6-8.1-9-1 entitles a taxpayer to claim a refund because of a
reduction in tax due to a federal modification. A taxpayer can file
a claim for refund within 180 days from the date of notice of the
final modification by the IRS. Therefore, an overpayment due to a
change of a federal income tax liability must be claimed within the
latest of: the three-year period from the due date of the return, the
date of payment, or within six months of the taxpayer’s notification
of the final modification by the IRS. If the taxpayer and DOR agree
to an extension of the statute of limitations for an assessment, the
period for filing a claim for refund is also extended.
Credits and payments. If a change is made to any of the payments
and/or credits reported on the original return, please attach any
schedules, statements or cancelled checks that support such change.
A tax payment made with the original return or tax refund received
from filing the original return (entered as a negative amount)
should be included on Line 37 Other payments, credits plus any
amounts included on this line when the original return was filed.
Note that an overpayment carried to the following year’s estimated
tax account on the originally filed return should be treated as a
refund and entered on Line 37. Once the overpayment is carried
forward, it cannot be reversed. A statement should be attached with
an explanation of the amount included on Line 37.
Remittance due or refund. If the amount of tax due (Line 33) is
greater than the payments and credits (Line 40), enter the balance
of tax due on Line 41. If the amended return is submitted after the
due date of the original return, including valid extensions, a 10%
penalty is due on the balance of tax due or $5, whichever is greater.
Note. A $10 per day penalty (maximum $250) may apply to zero
tax liability returns delinquently filed.
If a tax payment is made after the original return due date, the
payment must include interest. Interest is calculated from the
original return due date until the date the payment is made. For
current interest rates see Departmental Notice #3 available at
www.in.gov/dor/files/dn03.pdf.
If the amount of tax due (Line 33) is less than the payments
and credits (Line 40), enter the overpayment on Line 46. If the
overpayment is to be refunded, enter the overpayment amount on
Line 47. If the overpayment is to be carried forward to the next
following year’s estimated tax account, enter the amount on Line
48. Interest may or may not be due on the overpayment. Please
refer to General Tax Information Bulletin 101, available at www.
in.gov/dor/files/reference/gb101.pdf. The statute of limitations for
refund claims is 3 years from the due date of the original return
or 3 years from the date of the overpayment occurred, whichever
IT-20 Corporate Booklet 2023

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is later. Extensions of time extend the due date of the return.
Quarterly payments are considered to be made on the due date of
the return filed for a taxable period.
Note. An extension of time to file does not extend the time to
pay any tax due. Tax due must be paid by the original due date.
Interest and penalty are calculated on late payments from the due
date of the payment.
Note. If the corporation is undergoing a bankruptcy proceeding, mail
the amended return to: Indiana Department of Revenue, Bankruptcy
Section MS 108, 100 N. Senate Ave., Indianapolis, IN 46204-2253.

Mailing Options
If you owe tax, please mail the amended return to:
Indiana Department of Revenue
P.O. Box 7087
Indianapolis, IN 46207-7087
If you do not owe any tax, please mail the amended return to:
Indiana Department of Revenue
P.O. Box 7231
Indianapolis, IN 46207-7231

List the two-digit county code number if filing a return for a
corporate address located in Indiana. See Departmental Notice
#1, located at www.in.gov/dor/files/reference/dn01.pdf, for a list
of 2-digit county code numbers. Enter “00” (two zeroes) in the
county box D if the corporate address lies outside of Indiana.
Enter the principal business activity code, from the North
American Industry Classification System (NAICS), in the
designated block of the return. Use the six-digit activity code
reported on the federal corporation income tax return.

Question J and Other Fill-in Lines

All corporations filing an Indiana corporation income tax return
must complete the top portion of the form, including questions J
through W. Check or complete all boxes that apply to the return.
J.	

Check the “final return” box only if the corporation is
dissolved, liquidated, or has withdrawn from the state.
Also, the Form BC-100 must be filed to close out any sales
and withholding accounts. Visit www.in.gov/dor/tax-forms/
business-tax-forms to complete this form online.

K.	 Enter the date of incorporation for the company in field one
and enter the state of incorporation in field two.
L.	 Enter the corporation’s state of commercial domicile.

Instructions for Completing Form IT-20

M.	 Enter the year the initial Indiana return was filed.

Filing Period and Identification

N.	 Enter the corporation’s address where records are kept.

File a 2023 Form IT-20 return for a taxable year ending Dec. 31,
2023; a short tax year beginning in 2023; or a fiscal year beginning
in 2023 and ending in 2024. For a short or fiscal tax year, fill in the
beginning month and day and the ending date of the taxable year
at the top of the form.
A correct Form IT-20 must be submitted. Please use the
corporation’s full legal name and present mailing address.
For foreign addresses, please note the following:
•	 Enter the name of the city, town, or village in the box labeled
City;
•	 Enter the name of the state or province in the box labeled
State; and
•	 Enter the postal code in the box labeled ZIP Code; and
•	 Enter the 2-digit country code.
Check the appropriate box at the top of Form IT-20 if filing an
amended return.
For a name change, check the box at the top of the return. Enclose
copies of Amended Articles of Incorporation or an Amended
Certificate of Authority filed with the Indiana Secretary of State
with the return.
The federal employer identification number shown in the box in the
return’s upper-right corner must be accurate and identical to that
used on the federal corporation income tax return. Consolidated
filers must use the federal employer identification number of the
corporation designated as the reporting corporation.
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IT-20 Corporate Booklet 2023

O.	 If the corporation made estimated tax payments under a
different federal employer identification number (FEIN), check
this box. Attach a scheduling listing all the other identification
numbers that have been used when making payments.
P.	 Check this box if filing federal Form 1120 as a consolidated
return.
Q.	 Check this box if filing on a unitary basis, to indicate that
material changes in circumstances have occurred since the
last petition has been filed. If this box is checked, enclose a
statement indicating those changes.
R.	 Check this box if 80% or more of the gross income for the tax
year is derived from making, acquiring, selling, or servicing
loans or extensions of credit. If this box is checked, do not
file Form IT-20. Instead, Form FIT-20, the Indiana financial
institution tax return, must be filed.
S.	 Check yes to indicate if filing an Indiana consolidated
return. If so, complete and enclose Schedule 8-D, Schedule of
Indiana Affiliated Group Members.
T.	 Check this box if filing a combined return on a unitary
basis. If so, enclose the unitary apportionment addendum.
U.	 Check this box if the corporation deducted for any intangible
expenses or directly related interest expenses paid to affiliates.

Complete and enclose Schedule IT-20PIC. Also, enclose
federal Form 851, Affiliations Schedule, with the return.
V.	 Check this box if the corporation has a valid extension of
time or an electronic federal extension of time to file the
return. If applicable, enclose a copy of federal Form 7004
with the return.
W.	 Check this box if reporting income from disregarded entities.
If this box is checked, please enclose a list of the disregarded
entities with the return.

Computation of Adjusted Gross Income Tax

Unitary filers should use the combined group’s totals and relative
formula percentage for entries on all lines except 18 and 20.
Compute the Indiana portion of a net operating loss deduction,
if any, on line 20. Base it on the relative formula percentage as
applied for the loss year.
Important:
•	 Please round all entries to the nearest whole dollar amount.
•	 Please do not use a comma in dollar amounts of four digits or
more. For example, instead of entering “3,455” enter “3455.”

Income

Line 1 - Federal Taxable Income
Enter the federal taxable income (as defined under IRC Sections
63, 801, or 832) before any federal net operating loss (NOL)
deduction and/or special deductions from Form 1120 (pro forma
U.S. Corporation Income Tax Return) for the taxable period.
Some organizations can enter federal taxable income after the
$100 specific deduction. Political organizations and homeowner
associations are allowed a $100 specific deduction.
Line 2 - Federal Deduction of Qualifying Dividends
Include the federal deductions for foreign derived intangible
income and global low taxed intangible income. Use the amount
reportable to Indiana if filing as a consolidated group. See line 12
for Indiana’s treatment of any remaining foreign source dividends.
Line 3 - Subtotal Federal Taxable Income Before NOL
Subtract line 2 from line 1.

Modifications to Adjusted Gross Income,
Lines 4 - 11

Enter any add-backs and deductions on lines 4 through 10.
Enter the name of the add-back/deduction, its 3-digit code,
and its amount. Use minus signs to denote negative amounts.
Also include the proportionate share of Indiana modifications
attributable from a unitary partnership, prior to apportionment.
Attach additional sheets if necessary.
Adding Back Depreciation Expenses
Several of the discontinued add-backs were created by timing
differences between federal and Indiana allowable expenses. The
following is an example of how to report a difference.
Example. ABC Company has qualified restaurant equipment. For
federal tax purposes, they use the accelerated 15-year recovery
period for an asset placed in service in 2009. Since 2009, ABC

Company has been adding back the depreciation expense taken
for federal purposes that exceeded the amount allowable for
Indiana purposes. The accumulated depreciation on such an asset
through 2012 is, therefore, different for federal and state purposes.
This difference will remain until the asset is fully depreciated or
until the time of its disposition.
In this example, the asset was acquired in January 2009 at a
purchase price of $120,000. This normally would have a 25-year
recovery period, but IRC Sec. 168 allows for a 15-year recovery
period. Tax year 2012 is the last year ABC Company will have
reported a qualified restaurant equipment add-back until the end
of the 15-year recovery period.
If this asset was sold before being fully depreciated (using
straight-line depreciation), the catch-up modification would be
reflected in the year of the sale. However, if this property is held
through 2023 (the 15th year of depreciation), ABC Company will
report a negative $12,800 catch-up add-back on the corporation’s
2023 state tax return.

The following add-backs and deductions should
be entered on lines 4 through 10.
Conformity Add-Back

Before this publication was finalized Indiana had not conformed
to any changes to the Internal Revenue Code (IRC) that may
have become law after January 1, 2023. Therefore, the IRC used
to figure Indiana income may not wind up being the same as the
IRC used to figure federal income.
This add-back is specific to these annual current year conformity
issues. If uncertainty exists as to whether or not Indiana will adopt
some or all of the federal legislation passed after March 31, 2022,
that acts to modify federal AGI, you may add-back those items
as an “other” add-back. In the event those items are adopted, an
amended return should be filed to recoup the add-back(s).
Conformity Add-Back – Positive Entry (3-digit code: 120)
This add-back is only for current year conformity issues and
for modifications enacted by Indiana after publication of these
instructions. Conformity issues for preceding tax years must be
addressed on the add-back line specific to the item in question.
If the state legislature does not conform to federal code changes
enacted after January 1, 2023, you may have to amend your return
at a later date to reflect any differences between Indiana and
federal law. You may wish to periodically check for updates at
www.in.gov/dor.
Conformity Add-Back – Negative Entry (3-digit code: 147)
This add-back generally is based on conformity issues arising
from a previous year. However, in rare cases this can arise from
conformity issues arising in the current year where the IRC treats
an item as taxable or nondeductible that was previously exempt
or deductible. This can also arise when a new Indiana-specific
modification is enacted retroactively. For more information, see
Income Tax Information Bulletin 119 at www.in.gov/dor/files/
ib119.pdf.

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Tax Add-Back (3-digit code: 100)
Add back all state taxes based on or measured by income, levied
by any state, which were deducted on the federal tax return.
Wagering taxes fall within this category to be added back.
However, the amount to be added back is being phased out.
See the following instructions.
•	

Wagering taxes. The portion of wagering taxes required to
be added back as a tax based on or measured by income is
being reduced (phased out). For wagering taxes, such as the
riverboat wagering tax (IC 4-33-13), supplemental wagering
tax (IC 4-33-12), state slot machine wagering tax (IC 4-35-8),
sports wagering tax (IC 4-38-10), and similar taxes imposed
by other states based on wagering receipts, only a portion of
the taxes are required to be added back. The percentage of
taxes required to be added back is determined by the first date
of the taxpayer’s taxable year, and is determined as follows:
2020 – 75%; 2021 – 62.5%; 2022 – 50%; 2023 – 37.5% 2024
–25.0%; 2025 – 12.5%; 2026 and later – no add back required.
For example, Casino X, Inc., deducts $10,000,000 in riverboat
wagering taxes in 2023. Instead of Casino X adding back the
full $10,000,000, Casino X will add back $3,750,000.

Note. Income, losses and/or expenses from other schedules and
forms may flow through to federal Schedules C, E and F. K-1 may
be included on federal Schedule E, while expenses from federal
Form 8829 may be included on federal Schedule C. Make sure
to check these schedules and forms for any deduction that needs
to be added back. For example, partnership income from federal
Schedule K-1 may be included on federal Schedule E, while
expenses from federal Form 8829 may be included on federal
Schedule C. Make sure to check these schedules and forms for any
deduction that needs to be added back.
Net Bonus Depreciation Allowance (3-digit code: 104)
Add or subtract an amount attributable to bonus depreciation.
Do this if it’s in excess of any regular depreciation allowed if
the corporation did not elect under IRC Section 168(k) to have
it applied to property in the year the property was placed into
service. If property is owned, it is possible to have been allowed
to take additional first-year special depreciation for qualified
property in the current taxable year or an earlier taxable year. If
this is the case, add or subtract an amount that makes the AGI
equal the amount computed as if no bonus depreciation had
been permitted. (The first-year special depreciation for qualified
property includes 100% bonus depreciation.) If property subject
to a modification under this add-back is sold or disposed of
during the taxable year, use this add-back to report the previously
disallowed depreciation. Enclose a statement to explain the
adjustment being made. Income Tax Information Bulletin #118
at www.in.gov/dor/files/reference/ib118.pdf explains this initial
required modification on the allowance of depreciation for state
tax purposes.
Special rules may apply if the bonus depreciation is taken against
property acquired in a like-kind exchange. See Income Tax
Information Bulletin #118 at www.in.gov/dor/files/reference/
ib118.pdf for additional information.
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IT-20 Corporate Booklet 2023

Excess IRC Section 179 Deduction (3-digit code: 105)
Add or subtract the amount necessary to make the adjusted gross
income of the taxpayer that placed any IRC Section 179 property
in service in the current taxable year or in an earlier taxable year
equal to the amount of adjusted gross income that would have
been computed as if the federal limit for expensing under IRC
section 179 was $25,000 as opposed to $1,000,000 (adjusted for
inflation).
Indiana has adopted an expensing cap of $25,000. The federal
increase to a $1,000,000 deduction was not allowed for purposes
of calculating Indiana adjusted gross income. However, the
$2,500,000 threshold for phase-out (adjusted for inflation) is
allowed for purposes of calculating Indiana AGI. The depreciation
allowances in the year of purchase and in later years must
be adjusted to reflect the additional first-year depreciation
deduction, including the special depreciation allowance for 100%
bonus depreciation property, until the property is sold or fully
depreciated. If property subject to a modification under this
add-back is sold or disposed of during the taxable year, use this
add-back to report the previously disallowed depreciation.
Note. The net amount determined for the net bonus depreciation
or the IRC Section 179 add-back might be a negative figure
(because of a higher depreciation basis in subsequent years). If
it is, use a minus sign to denote that. (If the taxable income is a
loss, this adjustment increases a loss when added back.) Enclose a
statement to explain the adjustment.
Special rules may apply if the Section 179 expensing is taken
against property acquired in a like-kind exchange. See Income
Tax Information Bulletin #118 at www.in.gov/dor/files/reference/
ib118.pdf for additional information.
Charitable Contributions (3-digit code: 114)
Add back all charitable contributions deducted when computing
federal net taxable income.
Note. Also see the Infrastructure Fund Gift Deduction on page 17.
Dividends Paid to Shareholders of a Captive Real Estate
Investment Trust (3-digit code: 116)
Add back the amount of any deduction for dividends paid to
shareholders of a captive real estate investment trust (REIT). A
captive REIT is defined as a corporation, a trust, or an association:
•	 That is considered a REIT under Section 856 of the IRC;
•	 That is not regularly traded on an established securities
market;
•	 That is not organized in a country that has a tax treaty with
the United States Treasury governing the tax treatment of
these trusts; and
•	 In which more than 50% of the voting power or shares is
owned or controlled by one entity.
Foreign Gross-Up (3-digit code: 119)
Subtract the amount of foreign gross-up determined by
computing the federal foreign tax credit on Form 1118. This
should be reflected on federal Schedule C. List this deduction as a
positive number on Form IT-20.

Note. The federal foreign tax credit is not allowed for Indiana
income tax purposes.
OOS Municipal Obligation Interest Add-Back (3-digit code: 137)
Interest earned from a direct obligation of a state or political
subdivision other than Indiana (out of state, or OOS) is taxable by
Indiana if the obligation is acquired after Dec. 31, 2011. Interest
earned from obligations held or acquired before Jan. 1, 2012, is
not subject to Indiana income tax and should not be reported as
an add-back.

•	

Intangible expense means the following amounts, to the
extent these amounts are allowed as deductions from taxable
income under IRC Section 63: expenses; losses; and costs
directly for, related to, or in connection with the acquisition,
use, maintenance, management, ownership, sale, exchange, or
any other disposition of intangible property. Also included in
the term are royalties, patent fees, technical fees, copyright fees,
licensing fees, and other substantially similar expenses and costs.

•	

Makes a disclosure means a taxpayer provides the following
information about a transaction of a member of the same
affiliated group or a foreign corporation involving an
intangible expense and any directly related interest expense:
the recipient’s name; the state of the recipient’s commercial
domicile; the amount paid to the recipient; a copy of federal
Form 851 (Affiliation Schedule); and the information needed to
determine the taxpayer’s status under the allowed exceptions.

•	

Recipient means a member of the taxpayer’s affiliated group
who is paid income that corresponds to an intangible expense
or any directly related interest expense.

•	

Unrelated party means a person who is not a member of the
same affiliated group.

•	

Valid business purpose means one or more transactions
that have sufficient economic substance, other than the
avoidance or reduction of taxes that, alone or in combination,
constitute the primary motivation for a business activity or
change the taxpayer’s economic position in a meaningful way.
A meaningful change in the taxpayer’s economic position
includes, but is not limited to:
ο	 An increase in market share
ο	 Its entry into new business markets; or
ο	 Its compliance with a regulatory requirement of federal,
state, or local government.

Note. Interest earned from obligations of Puerto Rico, Guam,
Virgin Islands, American Samoa, or Northern Mariana is not
included in federal gross income and is exempt under federal
law. There is no add-back for interest earned on these obligations.
For more information, see Income Tax Information Bulletin #19
available at www.in.gov/dor/files/reference/ib19.pdf.
Federal Gross Repatriated Dividend Add-Back (3-digit code: 138)
Add back the amount necessary to make the dividend equal to
the gross deemed dividend reportable for federal tax purposes. If
you claimed a deduction under IRC section 965(c) for federal tax
purposes, the add-back will equal federal Form 965, Part II, Line
17. The total amount included in adjusted gross income will equal
the gross amount of dividends reported prior to any deduction
under IRC section 965(c).
Note. This income after the add-back and after any deduction for
Section 78 gross-up related to the deemed dividend is treated as a
foreign source dividend. Filers should use Schedule IT-20FSD to
calculate the proper deduction for Indiana taxes.
If you are filing as a REIT, add back the IRC Section 965(c) deduction
using 3-digit code 139. If you have made an IRC Section 965(m)
election, Indiana follows the federal treatment for that election.
Related Company Intangible Expense Add-Back
(3-digit code: 140)
Add back the net result from Schedule IT-20PIC Part 1, line 12. A
corporation subject to the AGI tax must add to its taxable income
any intangible expenses deducted in determining federal taxable
income. A corporation answering yes to question U on the front
of the return must complete Schedule IT-20PIC. Instructions are
attached to the schedule.
The following definitions apply to corporations for the purpose
of disclosing activities and amounts involving transactions of
intangible property to the extent required under IC 6-3-2-20:
•	

Affiliated group has the meaning set forth in IRC Section
1504, except that the ownership percentage is determined
using 50% instead of 80%.

•	

Foreign corporation means a corporation that:
ο	 Is organized under the laws of a country other than the
United States; and
ο	 Would be a member of the same affiliated group as the
taxpayer if the corporation were organized under the
laws of the United States.

Related Company Interest Expense Add-Back (3-digit code: 141)
Add back the net result from Schedule IT-20PIC Part 2, line 12. A
corporation subject to the AGI tax must add to its taxable income
any directly related interest expenses deducted in determining
federal taxable income. A corporation answering yes to question
U on the front of the return must complete Schedule IT-20PIC.
Instructions are attached to the schedule.
•	

Directly related interest expenses means interest expenses
that are either paid to or accrued/incurred as a liability to a
recipient if:
ο	 The amounts represent income from making loans; and
the recipient originally received the loaned funds from
the payment of expenses by the taxpayer, by a member of
the same affiliated group, or by a foreign corporation.

•	

Interest expense means an interest expense allowable under
IRC Section 163, determined without regard to the limitation
under IRC Section 163(j). If interest expenses paid or incurred
in the current year are disallowed as a result of IRC Section
163(j), the portion of the interest expenses that constitutes
directly related interest expenses are required to be added
back in the current year. If an interest expense is disallowed
IT-20 Corporate Booklet 2023

Page 15

under IRC Section 163(j) in the current year but allowed in a
later year, any portion of that interest expense deducted in the
later year is not required to be added back in the later year.
See the instructions for the Related Company Intangible Expense
for additional definitions apply to corporations for the purpose
of disclosing activities and amounts involving transactions of
intangible property to the extent required under IC 6-3-2-20.
Excess Federal Interest Deduction Modification (3-digit code: 142)
IRC Section 163(j) limits the federal interest deduction for most
business interest to 30% (50% for 2019 and 2020 in certain cases)
of adjusted taxable income plus business interest. However,
Indiana decoupled from this provision. Subtract an amount equal
to the amount as a deduction for excess business interest under
IRC Section 163(j) in the year in which the interest was first paid
or accrued. If you are deducting any business interest carried over
from a previous year, add the amount of this interest deducted.
Federal GILTI Deduction Add-Back (3-digit code: 143)
If you received any global intangible low taxed income, add back
the 50% deduction claimed under IRC Section 250(a)(1)(B)(i).
This amount should be reflected, in whole or in part, on federal
Form 1120, Schedule C, Line 22. Do not report a negative amount
with this code.
GILTI § 78 Deduction Add-Back (3-digit code: 146)
Add back any amount of IRC Section 78 income deducted under IRC
Section 250(a)(1)(B)(ii). This amount should be reflected in part on
federal Form 1120, Schedule C, Line 22. The sum of Code 143 and
Code 146 should not be greater than federal Form 1120, Schedule C,
Line 22. Do not report a negative amount with this code.
Modifications from Excess Inclusion Income (3-digit code: 153)
If you:
•	 Have a net operating loss for federal purposes incurred the
current taxable year that does not appear in your federal
taxable income as a result of reporting excess inclusion
income under IRC section 860E; and
•	 Have modifications to your Indiana adjusted gross income that
are allowable in determining your Indiana net operating loss,
use Code 153 to report the amount of modifications that are
allowable in determining your net operating loss. Report the net
modifications using the inverse of the signage for the underlying
modifications.
Example. Corporation A has a $100,000 of excess inclusion
income. Corporation A also has a $20,000 Indiana bonus
depreciation add-back and a $50,000 net operating loss for federal
purposes. Corporation A will report the $20,000 add-back as
bonus depreciation and a negative $20,000 using Code 153. The
C