Indiana's R&D credit is 15% of your research increase.

Rate	15% (first $1M of increase), 10% above
Refundable	No
Carryforward	10 years
Form	Schedule IT-20REC

The credit is the federal research credit, narrowed to Indiana and built on the increase in your research spending. The mechanics:

• Rate. 15 percent of the increase in Indiana qualified research expenses over the base amount, applied to the first $1,000,000 of that increase, and 10 percent of the increase above $1,000,000.
• It is incremental. The credit counts only research spending above a base amount computed under the federal Section 41 method. The base cannot be less than 50 percent of the current year's Indiana research expenses, so the increase the credit is figured on is at most half of your current Indiana QRE.
• An alternative method. Indiana also allows an alternative incremental computation at 10 percent for taxpayers who elect it, which can fit companies whose base amount is hard to establish under the standard method.
• Indiana-only. The research has to be conducted in Indiana. Expenses for research done elsewhere do not count, even where the federal definition would include them.
• Same expense definition as federal. Qualified research expenses follow IRC Section 41: wages for qualified services, supplies, and contract research. The work that supports your federal claim supports the Indiana claim, limited to the Indiana-performed portion.
• Nonrefundable, with carryforward. The credit offsets Indiana income tax. It is not refundable and there is no carryback, but unused credit carries forward for up to 10 taxable years.

The credit is claimed on Schedule IT-20REC, filed with the Indiana income tax return.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder is what supports your federal Form 6765 and, starting tax year 2026, the mandatory Form 6765 Section G appendix. Because Indiana uses the same Section 41 expense definition, that same evidence supports the Indiana credit for the portion of the work conducted in Indiana.

The Indiana state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• An Indiana-attributable QRE breakdown: wages, supplies, and contractor expenses tied to research conducted in Indiana, using the same business-component partition as the federal binder.
• Schedule IT-20REC input values: Indiana qualified research expenses, the base amount with the 50 percent floor applied, the increase, and the credit computed at the 15 and 10 percent tiers around the $1 million threshold.
• A method note: whether the standard incremental method or the 10 percent alternative method produces the larger credit for your facts.
• Filing notes for your CPA: that the credit goes on Schedule IT-20REC and which return it attaches to.

We do not file Schedule IT-20REC or sign the Indiana return. That stays with your CPA, the same way federal Form 6765 does. R&D Binder produces the workpaper; your CPA files.

If you operate in more than one state, additional state workpapers are $995 each. Most states with an R&D credit track the federal QRE definition closely, so the marginal cost per state is low once the federal binder is complete.

A worked example. An Indianapolis SaaS company with 12 engineers, $2.4M in qualifying wages (the federal QRE pool), and 9 engineers conducting their research in Indiana.

• Federal Section 41 credit. Computed on the full $2.4M federal QRE pool through Form 6765, claimed by the CPA. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• Indiana credit. Computed on the Indiana-conducted portion of QREs. Allocate roughly $1.8M to Indiana ($2.4M times the 9/12 engineer ratio, refined by each employee's actual research location). The base cannot be less than 50 percent of that, so the increase the credit runs on is at most $900,000. At 15 percent, that is up to $135,000, all inside the first $1 million tier.
• Nonrefundable, carried forward. The credit offsets Indiana income tax. A profitable company uses it against that tax; a pre-profit company carries the unused amount forward up to 10 years. There is no cash refund and no carryback.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus the Indiana state workpaper add-on ($995). Total $5,990.

The base amount and the engineer allocation are specific to each company; the numbers above are illustrative. The CPA files both returns. R&D Binder never appears on the federal or Indiana return.

If the Indiana Department of Revenue examines a return on which the research expense credit was claimed, the substantiation expected is the same kind the IRS expects under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, and QRE allocation by employee, contractor, and supplies, plus support that the research was conducted in Indiana. The binder R&D Binder produces is built to that standard from the federal side, and the Indiana workpaper inherits the same business-component structure and adds the in-state allocation.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for an Indiana Department of Revenue examination is a separate scope at $250 per hour, scoped per incident. We do not represent before the Department; that remains your CPA's responsibility or your tax controversy attorney's.

• Indiana Code 6-3.1-4 (Research Expense Credits), including the 15 percent and 10 percent rate tiers around the $1,000,000 threshold, the Section 41 base amount with its 50 percent floor, the Indiana-conducted requirement, and section 6-3.1-4-3, which sets the 10-taxable-year carryforward and bars any carryback or refund of unused credit. Indiana General Assembly.
• Indiana Department of Revenue, Research Expense Credit handbook, and the Research Expense Credit handout, for the rate tiers, the base computation, the alternative method, and the nonrefundable treatment.
• Indiana Schedule IT-20REC, Indiana Research Expense Tax Credit, the form on which the credit is computed and claimed with the Indiana return.
• IRS Form 6765 (federal Credit for Increasing Research Activities) and Internal Revenue Code Section 41, the federal definition Indiana incorporates.

This page is general informational content, not tax advice for any specific taxpayer. The Indiana credit is administered by the Indiana Department of Revenue. Rates, the base computation, the carryforward, and procedural requirements reflect Indiana Code 6-3.1-4 and Department of Revenue guidance as of June 2026. Confirm current figures and deadlines with your CPA or the Department before filing.

• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• California R&D credit
• Idaho R&D credit
• Illinois R&D credit
• Massachusetts R&D credit