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Hawkeye Ribbon Cutting

Loan Interest Credit

Financial institutions that make loans to businesses or residents in the Zone may be eligible for a credit on tax paid on interest income earned from these loans.

The credit is equal to 5% of the interest income received on all qualified loans made during the year.

A loan is a qualified loan if:

  • the loan proceeds are for purposes directly related to a business located in the Zone;
  • the loan proceeds are for improvements increasing the assessed value of real property located in the Zone;
  • the loan proceeds are used toward the rehabilitation, repair, or improvement of a residence within the Zone.

Interest income includes interest, service charges, time-price differentials and all other charges for the use of money.

To take advantage of this incentive, Lenders must be in good standing with the IEDC.

They must submit Schedule LIC with their Indiana State Tax return.

They must submit the EZB-R to the IEDC and JUEA by June 1st, accompanied by the appropriate fees, or submit an EZB-E if an extension of time is required., etc.

The Loan Interest Credit may be claimed annually.

*Qualified Loans include both business and residential loans!*