Form It-20np - Nonprofit Organization Unrelated Business Income Tax Booklet

Credits and Payment Computation

reduced rate of tax. (Note: Beginning on July 1, 2012, the corporate

tax rate will decrease by 0.5% each year, until July 1, 2015, when it

Line 18. Enter the total amount of estimated quarterly income tax

will be 6.5%.)

payments made for the calendar year 2011 or for a ﬁscal tax year

beginning in 2011 and ending in 2011. Itemize each payment in

Effective Jan. 1, 2005, qualiﬁed taxable income derived from a

the spaces provided.

designated Indiana Military Base Enhancement Area (MBEA)

is subject to tax at the rate of 5 percent. If line 14 is a loss ﬁgure,

Line 19. Enter the total amount paid with valid extension.

enter zero.

Line 20. Enter the amount of prior-year overpayment credit.

If you qualify as an MBEA taxpayer under IC 6-3-2-1.5, complete

and enclose a copy of Schedule M, Alternate Adjusted Gross

Line 21. Claim any other allowable tax liability credit by entering

Income Tax Calculation and check question box K (Schedule

the name, credit ID code number, and amount. The total of

M) on the front of Form IT-20NP. This form is available in the

nonrefundable tax liability credit is limited to the amount of

current-year Indiana Corporate Income Tax Booklet, which can

income tax on line 15, unless otherwise noted. If your claim

be found online at

exceeds the amount of your tax liability, you must adjust by

recalculating the credit to the amount you may apply. See

Enter the total computed adjusted gross income tax based on your

the listing of Other Tax Liability Credits beginning on page

Indiana taxable unrelated business income reported on line 14.

17. Refer to Income Tax Information Bulletin #59 at

for more information about Indiana

Summary of Calculations

tax credits available to taxpayers.

Line 16. IC 6-2.5-3-2 imposes a use tax at the rate of 7 percent on

Also, this line may include a refundable Economic Development

the use, storage, and consumption of tangible personal property

for a Growing Economy (EDGE) job retention credit. EDGE

in Indiana when sales tax was not paid at the point of purchase

credit information is listed on page 19. Note: Effective Jan. 1, 2010

and no exemption from tax exists. Nonproﬁt organizations qualify

(retroactive), a business is no longer required to have at least 35

for exemption from use tax under the following conditions: (1)

employees to qualify for an EDGE credit for job retention.

The nonproﬁt organization is exempt from the gross retail sales

tax under IC 6-2.5-5-22 through 26; (2) The property or service

A detailed explanation or supporting schedule must be enclosed

is used to further its nonproﬁt purpose; or (3) The organization is

with the return for any credits claimed on line 21. If you have state

not operated predominantly for social purposes.

credit for withholding on Form WH-18, claim Indiana credit by

enclosing copy C with the return and using credit ID code 841 on

Purchases of tangible personal property to be used by

this line.

organizations operated predominately for social purposes are

Line 22. Add the total credits (lines 18-21). Note that certain

subject to use tax. If more than 50 percent of the expenditures

credits may not exceed the amount of tax liability on lines 15

are for or related to social activities such as food and beverage

and 16.

services, golf courses, swimming pools, dances, parties, and

other similar social activities, the organization is considered to

Line 23. Balance of net tax due. If line 17 is greater than line 22,

be predominately operated for social purposes. In no instance

enter the difference.

will purchases for the private beneﬁt of any member of the

organization or any other individual, such as meals or lodging, be

Line 24. Enter the amount of calculated penalty for the

eligible for exemption.

underpayment of income taxes from Schedule IT-2220. Enclose

a completed Schedule IT-2220, which is available from the

If you are a registered merchant for Indiana, you must report

Department upon request. Corporations required to make

nonexempt purchases on Form ST-103, Indiana Sales/Use Tax

quarterly estimated payments are permitted to use the annualized

Return. If you are not required to ﬁle Form ST-103, or have failed

income installment method calculated in the manner provided by

to properly include all taxable purchases on the ST-103 return,

IRC Section 6655(e) as applied to the corporation’s adjusted gross

complete the Sales/Use Tax Worksheet on page 2 of the return and

income tax liability. If using this method, please check the box on

report the tax due on this line. Caution: Do not report the totals

this line and enclose a copy of your calculations when filing your

from the ST-103 on this worksheet or on Form IT-20NP. You can

tax return. The Department will review each request on a case-by-

get additional information regarding sales/use tax for nonproﬁt

case basis.

organizations by requesting Sales Tax Information Bulletin #10 at

or by calling (317) 232-0129.

Note: If a taxpayer’s annual liability exceeds $2,500, filing

quarterly estimated payments to remit 25 percent of the estimated

Line 17. Enter the total use tax and unrelated business income tax

annual tax liability is required.

from lines 15 and 16.

Line 23. Enter any interest due. Contact the Department for the

current rate of interest charged by calling (317) 232-0129, or visit

our website at and get Departmental

Notice #3.

Form It-20np - Nonprofit Organization Unrelated Business Income Tax Booklet - 2011 Page 10

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