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Qualified Employee Deduction

This benefit applies to individual taxpayers who live and work in the Zone.

For the purposes of this deduction, a “qualified employee” is defined the same as it is for the Employee Expense Credit.

Qualified Employees:

  • have their principal place of residence in the UEZ in which they are employed;
  • perform services, at least 90% of which are directly related to business in the UEZ;
  • spend at least 50% of their time working at the UEZ business.

On their Indiana State Income Tax return, Qualified Employees may deduct ½ of their Enterprise Zone income, or $7,500, whichever is less.
The employee’s employer must complete (sign) Schedule IT-40QEC. The employee should attach this form to their State Tax return.

Resident Form:

Schedule IT-40QEC  (Qualified Employee Deduction)

EZ-2 (Investment Deduction)