- 2 -
|
Instructions for Completing Schedule IN-PAT
Qualified Patents Exemption This exemption applies only to utility patents issued under 35
Public Law 223-2007 SECTIONS 1, 2, and 11 amended Indiana U.S.C. 101 and plant patents issued under 35 U.S.C. 161 for
Code (IC) 6-3-1-3.5 and adds IC 6-3-2-21.7, effective Jan. 1, inventions resulting from development processes conducted in
2008. Income from qualified patents included in federal taxable Indiana. The exemption does not include design patents issued
income is exempt from the adjusted gross income of individuals, under 35 U.S.C. 171.
corporations, and insurance companies for taxable years
beginning after Dec. 31, 2007. Part 2
Enter the name and filing date of the patent. Enter a description of
• A qualified patent is a utility patent or a plant patent the patent. Enter the number of employees the entity had on the
issued after Dec. 31, 2007, for an invention resulting from a patent filing date. To qualify for this exemption, the entity must
development process conducted in Indiana. The term does have fewer than 500 employees.
not include a design patent.
Part 3
• The exemption from income includes licensing fees or other Column 1. Fill in the tax years for which you are taking the
income received for the use of the patent, royalties received qualified patents income exemption. The exemption can be
for the infringement, receipts from the sale of a qualified claimed for up to 10 years.
patent, or income from the taxpayer’s own use of the patent
to produce the claimed invention. Column 2. Enter the amount of income earned from the patent.
Who Should File Schedule IN-PAT? Column 3. Multiply the amount of income earned from the
Any individual Indiana resident, any corporation (including patent by the corresponding percentage. For the first 5 years, 50%
affiliates) that has fewer than 500 employees and is domiciled of the amount of income received from the patent is exempt; the
in Indiana, and any nonprofit organization that is domiciled in percentage declines by 10% each year starting in the sixth year
Indiana should complete Schedule IN-PAT if they are subject that the exemption is claimed.
to the adjusted gross income tax and they have income from a
qualified patent. Schedule IN-PAT should be enclosed with your Column 4. Enter the amount of the exemption you are claiming
Indiana tax return (Form IT-40, Form IT-20, or Form IT-20NP). (Column 2 multiplied by Column 3). Enter this amount on Form
IT-20 (line 10), Form IT-20NP (line 4), Form IT-40 Schedule 2
Carryforward Years (under line 11), or Form IT-40PNR Schedule C (under line 11).
The exemption may not be claimed for more than 10 years. For The total amount of exemptions claimed in a taxable year may not
the first 5 years, 50% of the amount of income received from exceed $5 million.
the patent is exempt; the percentage declines by 10% each year
starting in the sixth year that the exemption is claimed. The total Enclose this schedule with your Indiana tax return.
amount of exemptions a taxpayer can claim in a taxable year may
not exceed $5 million.
For more information, get Income Tax Information Bulletin #104
at www.in.gov/dor/files/reference/ib104.pdf.
Part 1
Enter the name of the individual, corporation, or nonprofit
organization claiming the exemption.
Enter the Social Security number, Federal Employer Identification
Number, or Individual Taxpayer identification number.
Enter the North American Industry Classification System
(NAICS) business code for the patent. You can find a listing of all
the NAICS codes at www.naics.com.
*24100000000*
24100000000
|