What is the Enterprise Zone Employee Deduction?

Certain areas within Indiana have been designated as enterprise zones. Enterprise zones are established to encourage investment and job growth in distressed urban areas.

If you lived in an enterprise zone and worked for a qualified employer within that zone you may be able to take this deduction. Your employer will provide you with Form IT-40QEC if you are eligible to claim this deduction.

The amount of the deduction is one-half of the earned income shown on that form or $7,500, whichever is less. If you and your spouse both have received Form IT-40QEC, you may each take this deduction for a combined maximum of $15,000 (no more than $7,500 per qualifying person). You must enclose Form IT-40QEC with the Form IT-40 to support any claimed deduction.

Enterprise zones have been established in areas of certain cities/locations. Use this website to look up contact information for a particular enterprise zone: www.aiez.org/directory.html.

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