Federal Programs Available to Indiana Small Businesses
1. Indiana Research Expense Tax Credit (15%, Non-Refundable, 10-yr Carry-Forward)
Indiana's Research Expense Tax Credit is 15% of the excess of your qualified research expenses (QREs) over a base amount, computed using the federal Section 41 definition. There is no annual cap — if you spend $2M on qualified R&D in Indiana, you generate a $300K credit (assuming you exceed your base). The credit is non-refundable: it can only offset Indiana income tax liability, not generate a cash refund. Excess credits carry forward for up to 10 years, which means pre-revenue companies can accumulate credits and use them when they begin generating taxable income.
What counts as qualifying research in Indiana follows federal rules: developing new or improved products, processes, software, or techniques; activities where the outcome is uncertain; experimentation using the scientific method; and activities where the research is technological in nature. Contract research paid to Indiana universities (Purdue, IU, Notre Dame, Ball State, Indiana State) may qualify at 65% of the contract amount.
2. Federal Section 41 R&D Credit — QSB Payroll-Tax Offset (Up to $500K/Year)
Qualified Small Businesses — defined as companies with under $5M gross receipts and under 5 years old — can elect to apply up to $500,000 of their federal R&D credit against employer payroll taxes (Form 941) rather than income taxes. This is real cash: if you have $200K in qualified R&D spending and generate a $26K federal credit, you offset $26K against the payroll taxes you owe next quarter. No waiting until you're profitable.
For Indiana businesses, this pairs naturally with the state credit: claim the federal offset immediately (cash now), accumulate Indiana credits for carry-forward (cash later). The federal R&D credit uses 20% of incremental QREs in the simplified method — actual rates depend on your base period. The $500K annual cap was raised from $250K by the Inflation Reduction Act, effective for tax years beginning after December 31, 2022.
| Requirement | Federal QSB | Indiana Credit |
|---|---|---|
| Company age | Under 5 years old | No age requirement |
| Gross receipts | Under $5M | No revenue cap |
| Refundable? | Yes (payroll offset) | No (carry-forward 10 yr) |
| Annual cap | $500K | No cap |
| Rate | ~20% of incremental QREs | 15% of incremental QREs |
3. SBIR Phase I — NIH (Up to $323,000 — IU, IUPUI, and Indiana Life Sciences)
Indiana University's School of Medicine in Indianapolis (IUPUI) and the IU Health Research Complex are significant NIH SBIR ecosystems, drawing awards from the National Cancer Institute (NCI), National Institute on Drug Abuse (NIDA), National Institute of Mental Health (NIMH), National Heart, Lung, and Blood Institute (NHLBI), and National Institute of General Medical Sciences (NIGMS). The Regenstrief Institute in Indianapolis is a national leader in health informatics and generates both NIH grants and SBIR spinouts. Eli Lilly's presence in Indianapolis has historically seeded a deep life-sciences talent pool with company-formation experience.
NIH SBIR Phase I awards up to $323,000 (direct + indirect) for a 6-month feasibility study. Phase II follows at up to $3M for 2-year development. Indiana companies do not compete against each other in the same pool — NIH SBIR is national, and an Indianapolis biotech competes against all US applicants. The acceptance rate for Phase I is approximately 15-20% across NIH institutes.
4. SBIR Phase I — NSF (Up to $305,000 — Purdue Spinouts, Top-5 Nationally)
Purdue University in West Lafayette is consistently ranked in the top 5 nationally for NSF SBIR commercialization outcomes. The Purdue Research Foundation (PRF) and Purdue Foundry provide pre-SBIR bridge funding (Trask Innovation Fund, up to $50K), SBIR proposal review, commercialization coaching, and connections to DoD prime contractors. NSF SBIR Phase I awards up to $305,000 (70% of the total $275K direct + indirect) for 6-month feasibility studies — Phase II continues at up to $1M over 24 months.
NSF SBIR does not restrict to any single sector: Purdue spinouts have won awards in advanced manufacturing, semiconductor devices (Birck Nanotechnology Center), agricultural technology (Indiana Corn/Soy Research Foundation overlap), cybersecurity, and agricultural robotics. Notre Dame in South Bend competes actively for NSF SBIR in materials science, energy storage, and nanotechnology. Ball State in Muncie and Indiana State in Terre Haute support smaller spinout pipelines.
| Indiana University Ecosystem | Primary NSF Focus Areas |
|---|---|
| Purdue (West Lafayette) | Advanced manufacturing, semiconductors, agtech, cybersecurity, robotics |
| Notre Dame (South Bend) | Materials science, energy storage, nanotechnology, biomedical devices |
| IUPUI (Indianapolis) | Health informatics, biomedical engineering, sustainability |
| Indiana University (Bloomington) | Cognitive science, genomics, pharmaceutical, chemistry |
| Ball State (Muncie) | Emerging media, environmental science, educational technology |
5. SBIR Phase I — DoD (Up to $275,000 — Indiana Defense Manufacturing Corridor)
Indiana's defense manufacturing presence creates SBIR opportunities that differ from the coastal defense tech model. Indiana defense companies tend to win DoD SBIR in manufacturing process innovation, materials testing, propulsion systems, and vehicle survivability — areas where the state's deep manufacturing base provides technical credibility. Key DoD SBIR recipients include Crane, Indiana (Naval Surface Warfare Center Crane Division — the DoD's primary site for electronic warfare, special operations equipment, and microelectronics); Peru, Indiana (Naval Air Station Joint Reserve Base Grissom); and Fort Wayne (Army Reserve and National Guard logistics). Cummins in Columbus, Indiana — one of the world's largest diesel and alternative power manufacturers — generates significant DoD SBIR interest in propulsion and energy management.
Indiana's 21st Century Research and Technology Fund (below) can bridge the gap between DoD SBIR Phase I and Phase II. Defense SBIR Phase I awards $275,000 for up to 6 months; Phase II follows at up to $1.5–2M for 24 months.
6. IRA Section 45X — Advanced Manufacturing Production Credit (EV Batteries, Per-Unit, No Cap)
Section 45X of the Inflation Reduction Act is arguably the most transformative federal program for Indiana's manufacturing economy. It provides per-unit production credits for eligible components manufactured in the US — and Indiana is the second-largest state nationally for announced EV battery investment, trailing only Michigan. Credits include:
- Battery cells: $35 per kWh of capacity (no annual cap, permanent)
- Battery modules: $10 per kWh of capacity
- Electrode active materials: 10% of production costs
- Critical minerals: 10% of production costs (for minerals on the IRS-designated list)
- Inverters and power electronics: $0.11–$0.65/W depending on type
- Wind turbine components: Various per-unit rates (NOTE: wind credit terminates December 31, 2027)
Major Indiana 45X facilities include: StarPlus Energy (Samsung SDI / Stellantis JV) in Kokomo — one of the largest announced US battery plants; LG Energy Solution / Honda JV in Liberty (Union County); Stellantis assembly in Kokomo (Kokomo Transmission) and Tipton plants; Toyota in Princeton (Gibson County — SUV production electrification); Subaru in Lafayette (Tippecanoe County); and numerous Tier 1 and Tier 2 suppliers across the I-65 and I-69 corridors producing battery modules, thermal management components, and power electronics.
7. IRA Section 48E — Clean Energy Investment Tax Credit (30% + SW Indiana Energy Community Bonus)
Section 48E provides a 30% base investment tax credit for qualifying clean energy property — solar, wind, battery storage, fuel cells, microgrid controllers, and qualified biogas property. For Indiana businesses in designated energy community census tracts, an additional +10 percentage point bonus applies, bringing the effective rate to 40%.
Indiana's energy communities are concentrated in the state's historic coal-power corridor along the southwestern counties: Sullivan County (Sullivan Mine and Merom Generating Station area), Knox County (Edwardsport IGCC plant), Vigo County (Terre Haute / Duke Energy Cayuga plant), Gibson County (Princeton Generating Station — American Electric Power), Pike County (Petersburg Generating Station — AES Indiana), and Warrick County (Alcoa/Newburgh). Projects sited on qualifying brownfield sites in these counties may earn an additional +10pp brownfield adder, potentially reaching 50% for qualifying installations.
For Indiana businesses not in SW Indiana: the base 30% ITC still applies statewide for solar, storage, and wind installations on commercial property. A $1M solar rooftop installation at an Indianapolis warehouse earns a $300K federal tax credit — permanent, no annual sunset (unlike the legacy Section 48 that expired December 31, 2024).
8. Indiana 21st Century Research and Technology Fund (Up to $1M)
The Indiana 21st Century Research and Technology Fund is the state's primary mechanism for funding pre-commercial applied research at Indiana companies. Awards range from $100,000 to $1,000,000 per project, targeting companies engaged in research in life sciences, information technology, advanced manufacturing, agriculture, and energy. Projects must have commercialization potential and a plan for creating jobs in Indiana.
The Fund is administered through the Indiana Economic Development Corporation and typically requires a private match — the ratio depends on company stage and project type. It functions as a hybrid of a grant and a performance agreement: funds are disbursed against milestones, and the agreement may require repayment if commercialization benchmarks are not met. It is frequently used as a Phase II bridge or "Phase 1.5" gap filler between federal SBIR awards.
Indiana companies that have used the 21st Century Fund successfully include Endocyte (West Lafayette — now a Novartis subsidiary), Oncobiologics (acquired from Purdue research), and numerous agriculture-tech companies emerging from Purdue's College of Agriculture. Eligible applicants must be Indiana-incorporated companies with operations in the state.
9. IEDC Economic Development for a Growing Economy (EDGE) Tax Credits
EDGE credits are refundable Indiana state payroll tax credits awarded to companies committing to create significant net-new jobs in Indiana. Unlike most Indiana credits, EDGE credits are refundable — they can generate a check from the state if your Indiana tax liability is lower than your credit. Credits are calculated as a percentage of the new withholding taxes paid by new Indiana employees, typically 40-100% of that withholding for up to 10 years.
EDGE is negotiated case-by-case with IEDC and is not an open application program. To be considered, companies typically need to be committing to at least 10-50 new jobs (thresholds vary by county and economic distress level). High-quality jobs — in technology, life sciences, advanced manufacturing — at above-average wages receive more favorable credit terms. IEDC has approved EDGE agreements for companies ranging from mid-sized manufacturers in Fort Wayne and Evansville to technology firms in Indianapolis and Carmel.
10. IEDC Skills Enhancement Fund (Reimbursable Training Grants, Up to 50%)
The Skills Enhancement Fund (SEF) reimburses Indiana businesses for up to 50% of eligible employee training costs — including technical skills, software certifications, safety training, and lean manufacturing courses. Training must be delivered by an Indiana accredited educational institution, a state-approved training provider, or a qualified internal trainer. The program is demand-driven: applications are accepted year-round and reviewed continuously.
Eligible training costs include instructor fees, curriculum development, training materials, and assessment tools. Travel and lodging are excluded. Companies must be for-profit, operating in Indiana, and in good standing with IEDC. There is no minimum employee count, making SEF one of the more accessible IEDC programs for sub-50-employee manufacturers and technology companies. Maximum reimbursement per application is not publicly fixed — IEDC reviews on a case-by-case basis.
11. Indiana Venture Capital Investment Tax Credit (20% / 25% Rural)
Indiana's Venture Capital Investment Tax Credit rewards investors who put capital into Indiana-certified emerging technology companies. Investors earn a 20% Indiana income tax credit on their investment amount — rising to 25% for investments in companies located in rural counties (defined as non-urban counties under Census Bureau standards). The credit is non-refundable but carries forward 9 years.
For the company, this credit increases your attractiveness to Indiana-based angel investors and family offices who can reduce their effective tax cost of investment. A $500K investment from an Indiana angel in your Indianapolis biotech generates a $100K Indiana credit for the investor — a meaningful incentive that's often cited in fundraising conversations. Companies must apply to IEDC for VCITC certification before soliciting investments under the program.
12. SBA Programs — 7(a) Loans, 504 Loans, Microloans
The SBA does not offer direct grant programs for general small businesses — SBA grants are limited to specific competitions (Innovation Challenge, HUBZone, etc.) and SBIR. What SBA does offer Indiana small businesses: (1) 7(a) loans up to $5M for working capital, equipment, real estate — partial government guarantee reduces lender risk; (2) 504 loans up to $5.5M for fixed assets at below-market fixed rates through Certified Development Companies — Indiana has multiple active CDCs including Old Capital CDC in Indianapolis and Indiana Statewide CDC; (3) Microloans up to $50,000 through SBA-approved intermediaries — Indiana Small Business Development Corporation (ISBDC) and other CDFIs administer microloan programs for startups and underserved entrepreneurs.
SBA 7(a) approval typically requires at least 2 years in business, positive cash flow, and personal guarantee from owners with 20%+ equity. The Indiana District SBA office in Indianapolis can direct you to preferred lenders who process Indiana applications quickly.
13. Indiana Small Business Development Centers (ISBDC) — SBIR Assistance + Free Advising
Indiana's network of Small Business Development Centers — organized under the ISBDC statewide network — provides free SBIR/STTR application assistance, business plan development, financial analysis, and connections to IEDC programs. ISBDC offices are located at Purdue (West Lafayette), IU (Bloomington), IUPUI (Indianapolis), Notre Dame (South Bend), Indiana State (Terre Haute), Indiana University East (Richmond), and regional offices in Fort Wayne, Muncie, Evansville, and Columbus.
ISBDC advisors work one-on-one with founders at no cost, funded by a combination of federal SBA dollars and state matching funds. For SBIR applicants, ISBDC can review your commercialization plan (a key scoring factor), connect you with a university IP attorney, and help you identify which federal agencies are most likely to fund your technology. ISBDC services are free and available to any Indiana-based business.
14. Purdue Research Foundation — Trask Innovation Fund and Commercialization Grants
Purdue Research Foundation manages Purdue's technology transfer and commercialization ecosystem, including the Trask Innovation Fund which provides non-dilutive grants of up to $50,000 to Purdue faculty and spinout companies for proof-of-concept validation, prototype development, and market feasibility studies. The fund is designed as a pre-SBIR bridge: demonstrate commercial feasibility with Trask funding, then submit a stronger SBIR application with preliminary data.
PRF's Purdue Foundry in West Lafayette also provides co-working space, business development mentorship, connections to Indiana venture capital (including Elevate Ventures, the IEDC-backed venture fund), and introductions to regional angel networks. Foundry companies receive priority consideration for Trask funding and ISBDC advising services. Eligibility requires Purdue IP involvement or a faculty co-founder; pure spinouts without Purdue IP can apply for Foundry membership on a case-by-case basis.
15. Indiana Brownfield Program — EPA-Leveraged Site Remediation Grants
The Indiana Finance Authority administers the Indiana Brownfield Program, which provides assessment and cleanup grants for contaminated industrial and commercial sites, often at former manufacturing facilities. Federal EPA Brownfield grants (up to $500K for assessment, $1.5M for cleanup) are layered with state matching funds. For Indiana manufacturers looking to redevelop former steel, chemical, or automotive sites — particularly in Gary (Lake County), Muncie (Delaware County), Anderson (Madison County), and South Bend — brownfield programs can unlock sites unavailable through normal real estate channels.
The combination of brownfield remediation grants + Section 48E ITC for clean energy installations on remediated sites + Section 45X for manufacturing production has created compelling stacking opportunities in SW Indiana's former coal plant counties and in Northwest Indiana's former industrial corridor along Lake Michigan.
Which Programs Fit Your Business Type
Indianapolis Tech Startup (Pre-Revenue, Under 5 Years Old)
Your primary stack: federal Section 41 R&D credit payroll-tax offset (up to $500K/yr — claim against Form 941 quarterly), Indiana R&D credit (accumulate for carry-forward), and NSF or NIH SBIR if you have qualifying research. Indianapolis has a growing tech ecosystem anchored by Salesforce (Tech Hub on Monument Circle), Infosys Innovation Hub, and venture capital from Elevate Ventures and Allos Ventures. IEDC's EDGE credit becomes relevant when you hire your 10th–20th employee. Purdue Foundry and ISBDC Indianapolis are free resources that can substantially improve your SBIR acceptance rate. For pre-SBIR validation, explore IUESI (IU Emerging Startups Initiative) if you have IU IP.
Purdue or Notre Dame Spinout (University IP, West Lafayette or South Bend)
Your advantage is institutional: Purdue Research Foundation's Trask Innovation Fund (up to $50K pre-SBIR), PRF technology transfer attorneys (IP position secured), Purdue Foundry co-working and mentorship, and direct connections to NSF SBIR program managers who know Purdue's track record. Your first goal should be Trask funding to generate proof-of-concept data, then submit to NSF SBIR Phase I ($305K) with Purdue Foundry's proposal support. For Notre Dame spinouts in South Bend: Notre Dame Research (NDR) provides similar pre-SBIR support through the IDEA Center; target NSF SBIR or DoD SBIR (especially AFWERX for dual-use materials science). Indiana 21st Century Fund ($100K–$1M) becomes relevant once you have a commercialization plan and need bridge capital between SBIR phases.
Automotive and EV Component Manufacturer (Kokomo, Lafayette, Princeton, Tipton)
Section 45X is your most immediately actionable program if you produce battery cells ($35/kWh), battery modules ($10/kWh), electrode active materials (10% of production costs), or other eligible components. The Samsung SDI / Stellantis StarPlus Energy plant in Kokomo, the Honda / LG Energy Solution plant in Liberty, and Toyota in Princeton create a dense Tier 1 and Tier 2 supplier ecosystem in Howard, Tippecanoe, and Gibson counties. Stack Section 45X with Indiana R&D credits for any process improvement R&D, and explore IEDC EDGE credits for new headcount. For Tier 1 suppliers committing to significant capital investment, IEDC negotiates individual incentive packages — request a business development meeting. The Kokomo area has also received federal EDA grants under the Build Back Better Regional Challenge and the Good Jobs Challenge; check IEDC and Kokomo's economic development office for open windows.
Bloomington Life Sciences and Pharmaceutical Company
IU Bloomington's chemistry, molecular biology, and neuroscience programs generate NIH SBIR-eligible research in drug discovery, diagnostic tools, and pharmaceutical process chemistry. IU Health's presence in Indianapolis provides clinical trial infrastructure for Bloomington-area startups requiring human subjects research. Eli Lilly's Indianapolis headquarters creates corporate venture and licensing opportunities that complement SBIR funding — Lilly's LEAP program and internal ventures arm regularly engage Indiana startups. NIH SBIR Phase I ($323K) through NIAID, NCI, NIGMS, or NCATS is the primary federal entry point. Regenstrief Institute partnerships unlock NIH funding for health informatics and digital therapeutics. For life sciences companies in Monroe County: Monroe County EDIT (Economic Development Office) offers local incentives, and ISBDC Bloomington provides NIH grant navigation support.
Fort Wayne and Northeast Indiana Manufacturer
Fort Wayne is Indiana's second-largest city and the center of a dense manufacturing corridor in Allen, DeKalb, Whitley, and Noble counties producing electrical components, medical devices, and defense systems. Companies like Do it Best Corp., Steel Dynamics, and NISCO have anchored a supplier ecosystem that creates SBIR opportunities (particularly DoD SBIR for defense-adjacent suppliers) and Section 45X relevance for companies producing power electronics, inverters, or battery-related components. IEDC EDGE credits for job creation are frequently used in Fort Wayne's competitive landscape for manufacturing talent. The Northeast Indiana Regional Partnership (NIRP) coordinates local economic development incentives that layer with state programs. Indiana Tech (Fort Wayne) and Trine University (Angola) provide workforce development programs eligible for Skills Enhancement Fund reimbursement.
Women-Owned, Veteran-Owned, and Minority-Owned Indiana Businesses
Federal SBIR has no set-aside by ownership status, but DoD SBIR has an SBIR/STTR Inclusion Program that provides additional support to underrepresented founders, including pre-application mentoring and Phase I application reviews. IEDC's Inclusive Entrepreneurship Fund provides capital access support for minority entrepreneurs. SBA's 8(a) Business Development Program (for socially and economically disadvantaged business owners) provides access to set-aside federal contracts — a revenue stream separate from grants that can significantly reduce dependency on grants. Indiana CDFIs including Community Development Fund of Indiana, LISC Indianapolis, and Horizons Unbound provide microloans and technical assistance to underserved entrepreneurs in Indianapolis, Gary, Fort Wayne, and Evansville.
Indiana Regional Funding Landscape
Indianapolis / Central Indiana
State capital and primary economic hub. Home to IEDC headquarters, Elevate Ventures, Purdue Polytechnic Indianapolis, IUPUI health science campus, and Regenstrief Institute. EDGE credits, SBIR NIH (IUPUI life sciences), venture capital, and SBA programs are most accessible here. Broad Ripple, Mass Ave, and the 16 Tech innovation district in northwest Indianapolis concentrate the tech startup community. Major employers include Salesforce, Eli Lilly, Cummins, Dow AgroSciences (BASF), and Anthem/Elevance Health — all generating spinout activity and supplier development opportunities.
Kokomo / North-Central Indiana (Howard, Tipton, Miami Counties)
Indiana's EV battery manufacturing epicenter. StarPlus Energy (Samsung SDI / Stellantis) in Kokomo represents one of the largest single EV battery investments in the US. Section 45X credits are highly relevant for Tier 1 and Tier 2 suppliers in this corridor. Kokomo's economic development office has been active in coordinating IEDC packages for manufacturing suppliers. Kokomo also qualifies for some Opportunity Zone census tracts in the city core, relevant for real estate and equipment investment. Indiana University Kokomo provides workforce development and ISBDC advising.
Lafayette / West Lafayette (Tippecanoe County)
Purdue University dominates West Lafayette's funding landscape. PRF Trask Innovation Fund, Purdue Foundry, NSF SBIR via Purdue, and the 21st Century Fund are all anchored here. Subaru of Indiana Automotive in Lafayette is the anchor employer creating a Japanese automotive Tier 1/2 supplier ecosystem. Tippecanoe County also houses a growing food-science spinout cluster from Purdue's College of Agriculture — USDA SBIR and specialty crop grants are relevant for Purdue agtech spinouts. Elevate Ventures has an active portfolio in Tippecanoe County.
South Bend / Michiana (St. Joseph County)
Notre Dame's IDEA Center and the Notre Dame Research enterprise drive SBIR and technology commercialization activity in St. Joseph County. South Bend has undergone significant downtown revitalization (Electric Works redevelopment in neighboring Fort Wayne offers comparison) and has active TIF districts and brownfield programs for manufacturers repurposing former Studebaker and Bendix sites. Michiana area companies with DoD and NSF SBIR interests benefit from Notre Dame's national defense and materials science research reputation. Elevate Ventures and ISBDC South Bend serve the regional startup community.
Southwest Indiana (Sullivan, Knox, Vigo, Gibson, Pike, Warrick Counties)
The legacy coal-power corridor of southwestern Indiana qualifies for energy community IRA bonuses — ITC rates reach 40% (plus potential brownfield adder). Duke Energy, AES Indiana (formerly Indianapolis Power & Light), and American Electric Power are closing coal plants in this corridor, creating brownfield sites eligible for clean energy redevelopment. VCEDA-equivalent programs from state economic development and EPA brownfield grants layer with 48E ITC for project developers. Evansville (Vanderburgh County) is the regional urban center with active IEDC engagement, an SBA district office, and ISBDC advising. Indiana University Southeast (New Albany) and University of Southern Indiana (Evansville) provide workforce development eligible for SEF reimbursement.
Northeast Indiana Manufacturing Corridor (Allen, DeKalb, Whitley, Noble Counties)
Fort Wayne anchors Indiana's northeast manufacturing complex — one of the highest concentrations of manufacturing employment in the US by share of workforce. DoD SBIR for defense-adjacent manufacturers, Section 45X for power electronics and inverter producers, and IEDC EDGE credits for job creation are the primary programs. The Northeast Indiana Regional Partnership (NIRP) coordinates local and regional economic development with IEDC. Parkview Health (Fort Wayne) is a growing NIH SBIR participant in health informatics and biomedical devices. Steel Dynamics and associated suppliers present Section 45X opportunities for advanced steel component manufacturing for EV platforms.
Indiana Funding Decision Tree
Answer these questions to identify your most likely funding path:
-
Do you conduct R&D (qualifying research activities under IRC §41)?
- Yes, and under 5 years old / under $5M revenue → Federal Section 41 payroll-tax offset (immediate cash quarterly) + accumulate Indiana 15% credit
- Yes, but profitable / over 5 years → Indiana R&D credit (reduces state tax liability, 10-yr carry-forward) + federal R&D credit against income taxes
- No → Skip to Question 2
-
Do you have university-affiliated technology or a Purdue/IU/Notre Dame faculty co-founder?
- Purdue affiliation → Purdue Research Foundation Trask Fund ($50K) → NSF SBIR Phase I ($305K) or NIH SBIR ($323K) depending on domain
- IU/IUPUI affiliation → NIH SBIR Phase I through NIAID, NCI, NIGMS, or NCATS
- Notre Dame affiliation → NSF SBIR (materials) or DoD SBIR (defense applications)
- No university affiliation → SBIR still available; ISBDC can help prepare competitive applications
-
Do you manufacture battery cells, modules, electrode materials, or EV components in Indiana?
- Yes, at production scale → Section 45X production credits (per-unit, permanent, transferable) + Section 48E ITC for facility energy systems
- Prototype/pilot stage → Stack R&D credits for process development; 45X activates at commercial production
- No → Skip to Question 4
-
Are you installing a clean energy system (solar, storage, wind) on Indiana property?
- In SW Indiana energy community counties (Sullivan, Knox, Vigo, Gibson, Pike, Warrick) → Section 48E ITC at 40% (base 30% + energy community +10pp)
- Elsewhere in Indiana → Section 48E ITC at 30% base
- No → Skip to Question 5
-
Are you creating net-new jobs in Indiana (at least 10-25 employees)?
- Yes, technology or life sciences jobs at above-average wages → Contact IEDC to initiate an EDGE credit negotiation
- Yes, but manufacturing or mixed → EDGE still worth initiating; IEDC will assess based on wage levels and location
- No significant hiring planned → Explore Skills Enhancement Fund for training reimbursement (open to smaller businesses)
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Frequently Asked Questions — Indiana Small Business Grants
Are there grants for small businesses in Indiana?
Most Indiana state programs are performance-based tax credits or incentive agreements, not outright grants. True non-repayable grants for Indiana small businesses come primarily from federal SBIR/STTR programs (Phase I: $275K–$323K) and the Indiana 21st Century Research and Technology Fund (up to $1M, with milestone requirements). SBA programs are loans, not grants. IEDC programs are credits negotiated in exchange for job commitments. If you're looking for a check written to your business without repayment obligations, SBIR and the 21st Century Fund are the most realistic pathways.
What is the Indiana R&D tax credit rate and how does it compare to neighboring states?
Indiana's R&D credit is 15% on incremental qualified research expenses above a base, with no annual cap and a 10-year carry-forward for unused credits. Ohio offers 7% (non-refundable). Michigan offers 4.25% (refundable — better for pre-revenue companies despite lower rate). Illinois has no state R&D credit. Kentucky offers a 5% credit. For profitable R&D-intensive companies, Indiana's 15% non-refundable credit is among the most generous in the Midwest. For pre-revenue startups, Michigan's 4.25% refundable credit generates more immediate cash despite the lower rate. The federal QSB payroll-tax offset ($500K/yr) is available regardless of state and should be your first claim if you qualify.
How does Purdue University help Indiana companies win SBIR grants?
Purdue Research Foundation (PRF) provides end-to-end SBIR support for Purdue faculty spinouts and affiliated companies: pre-proposal review, commercialization plan development (a critical scoring factor), patent prosecution through PRF's IP attorneys, co-working space and mentorship through Purdue Foundry in West Lafayette, and Trask Innovation Fund pre-SBIR grants (up to $50K) for proof-of-concept work. Purdue's Office of Technology Commercialization has a strong track record with NSF and NIH program managers. Non-Purdue companies can access ISBDC West Lafayette (co-located at Purdue) for free SBIR application advising, though they won't have the same direct PRF IP and Foundry resources.
Which Indiana counties qualify for the IRA energy community bonus under Section 48E?
Indiana energy community census tracts are concentrated in the southwestern coal-power corridor: Sullivan County (Sullivan Mine / Merom area), Knox County (Edwardsport), Vigo County (Terre Haute / Cayuga plant), Gibson County (Princeton Generating Station), Pike County (Petersburg plant), and Warrick County (Newburgh / former Alcoa). These tracts earn an additional +10pp on the base 30% ITC under Section 48E, raising the effective rate to 40%. Some tracts in this corridor also qualify as brownfield sites, potentially adding another +10pp for a 50% effective ITC. Northwest Indiana (Lake County former steel sites) has separate brownfield eligibility but fewer coal-focused energy community designations. Check the DOE Energy Communities portal for tract-level lookup.
What do Indiana IEDC EDGE credits actually pay?
EDGE credits are calculated as a percentage — typically 40-100% — of the new Indiana withholding taxes paid by each incremental new hire, paid annually for up to 10 years. For example, if you hire 25 Indiana employees at $70,000 average salary, each employee generates roughly $2,450/year in Indiana withholding taxes. At 80% EDGE credit for 10 years, that's roughly $1,960/employee/year, or $49,000/year across 25 new employees, for a potential $490,000 total credit over 10 years. Credits are refundable — they can generate a check even if your Indiana tax liability is lower than the credit. Actual EDGE terms are negotiated case-by-case with IEDC based on wage levels, location, and strategic importance.
Is the Indiana 21st Century Research and Technology Fund a grant or a loan?
It's structured as a conditional grant: funds are disbursed against milestones, and the agreement includes repayment provisions if commercialization benchmarks are not met. In practice, for projects that succeed commercially, the fund functions as a non-repayable grant. For projects that fail to meet commercialization milestones, the IEDC may seek repayment of some or all funds. The structure is similar to a forgivable loan tied to performance — standard in economic development circles. Budget 2-3 months to prepare a competitive application; IEDC reviews annually and expects a complete commercialization plan, financial projections, IP disclosure, and evidence of market traction.
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