Indiana's Economic Development for a Growing Economy (EDGE) Program Overview

Indiana has a robust number of economic incentive programs in its toolkit to encourage business development throughout the state. Understanding and leveraging such economic incentives is key to making informed investment decisions for companies looking to expand or relocate in Indiana. One of the state’s marquee programs, Economic Development for a Growing Economy (EDGE), stands out as a lucrative tool designed to attract and retain businesses. This initiative offers tailored, performance-based incentives that can significantly reduce the tax burden on qualifying companies.

Key features of the Indiana EDGE program

The EDGE program, administered through the Indiana Economic Development Corp. (IEDC), is structured to benefit companies committed to creating new jobs and making substantial capital investments in Indiana. The program primarily offers refundable tax credits directly correlated with a company’s committed number of jobs and payrolls created. This ensures that the incentives are directly aligned with the economic benefits generated by a company’s new employment. The refundable corporate income tax credit is calculated based on a negotiated percentage of future increased tax withholdings generated from incremental jobs over generally 10 years.

Strategic benefits for companies

One of the distinguishing features of the EDGE program is its focus on both large and small enterprises, making it accessible to a diverse range of industries from manufacturing to tech startups. By reducing operational costs through tax savings, the program not only enhances a company’s bottom line but also encourages further investment throughout the state. In addition, the Legislature in 2022 showed its willingness to further enhance this benefit by extending the term for up to 20 years to attract large economic development projects. This has proved particularly useful in attracting megaprojects in the electric vehicle battery and solar manufacturing sectors.

Announced Indiana EDGE 2020-2024 awards

To illustrate the benefits of the Indiana EDGE program, the following graph summarizes the total annual EDGE awards based on estimated qualified investments and projected new job creation from 2020 to 2024.

Source: https://secure.in.gov/apps/iedc/transparencyportal/searchtaxgrantloancontracts
*2024 data as of 4/30/2024

EDGE awards vary significantly by project, but utilizing the data above, the average EDGE award is approximately $12,000 per job, resulting in a 4.5% return on investment. The notable peak in award value in 2021 was tied to significant projects such as Grand Design RV, Brinley RV, Elanco US Inc. and Catalent Indiana LLC. Some of the more notable announced EDGE awards in 2024 are related to solar manufacturing projects such as Canadian Solar and SunRight Solar as well as Sazerac of Indiana LLC and Nhanced Semiconductors Inc. Since the EDGE credit is calculated based on incremental employee tax withholdings, it will be interesting to see the impact of future award values as the individual state income tax rates continue to decline in Indiana.

Conclusion

If your business is considering utilizing the EDGE program, the application process involves a detailed submission that outlines the projected job creation and capital investment. Applicants must present a clear and compelling case for how their operations will contribute to the economic landscape of Indiana. The IEDC works closely with businesses to ensure that the benefits are maximized. In addition, annual reporting requirements to claim tax certifications are included with a company’s state income tax return.

Please reach out to one of Site Selection Group’s economic incentive experts if you would like to learn more about this lucrative program or need assistance navigating the process, including what additional benefits may exist in Indiana such as the Skills Enhancement Fund, Redevelopment Tax Credit, Hoosier Business Investment tax credits or property tax abatements.