Indiana Response to Bonus Depreciation
FROM: COMMERCE CLEARINGHOUSE (CCH), 4/2/02
The Indiana Department of Revenue has announced that the retroactive provisions
of the stimulus act that are reflected in federal adjusted gross income will
not be incorporated into the computation of Indiana adjusted gross income for
tax year 2001 because of the retroactive effective date and the fact that P.L.
107-147 was signed after January 1, 2002. The announcement includes a detailed
listing of the forms and lines that will need to be adjusted to reflect Indiana
adjusted gross income.
FROM: Indiana News Release, March 22, 2002
Adjusted Gross Income Tax: Federal Changes Inapplicable for 2001
Changes made to the Internal Revenue Code by the federal Job Creation and Worker
Assistance Act of 2002 (P.L. 107-147) relating to "bonus" depreciation
and extension of net operating loss (NOL) carrybacks to five years do not apply
for Indiana adjusted gross income tax purposes for tax year 2001 because Indiana
has adopted the IRC as it was amended and in effect on January 1, 2001. These
deductions may apply retroactively for tax year 2001 for federal purposes. As
a result, taxpayers may have to make adjustments and attach a separate statement
to their Indiana tax return if the deductions impacted by the Act were reflected
in the taxpayers' federal adjusted gross income. If deductions impacted by the
Act were not reflected in the federal adjusted gross income, no adjustments
are necessary.
If adjustments are necessary for the 2001 tax year, they should be reported
on the following lines of the following Indiana forms: (1) IT-40, line 2, "Tax
Add-Back"; (2) IT-40PNR-Schedule A, line 23B, "Tax Add-Back";
(3) Schedule IT- 40 PNRA, line 2b, "Add Back"; (4) IT-20, line 30,
"Foreign Source Dividends (Schedule H) and other adjustments"; (5)
IT-20SC, line 2a, "Add Back"; (6) IT- 65, line 2a, "Add Back";
(7) IT-20NP, line 62, "Other Adjustments"; (8) FIT- 20, line 11, "Other
income adjustments"; and (9) IT-41, line 2, "Federal Deductions Allocable
to Tax Exempt Income." In addition, a separate statement must be attached
to the return identifying the changes affected by P.L. 107- 147.
Taxpayers that filed both the federal and Indiana tax returns reflecting the
additional deductions from the Act must amend their Indiana return to "add
back" those deductions.