The charges include conspiracy to use a weapon of mass destruction, attempting an act of terrorism, transportation of an explosive.
The indictment alleged that Shahzad was trained in Pakistan by affiliates of Tehrik-i-Taliban. The prosecutors also claimed that he received the money for the attack from Pakistani militants.
If found guilty, Pakistani-American 30-year-old Shahzad could be in prison for life.
Shahzad was apprehended at John F Kennedy airport while trying to escape to Pakistan via Dubai on May 3 and has been cooperating with the federal authorities by providing them with information.
The father of two worked as a financial analyst in Connecticut where he lived with his wife.
If the Times Square bombing was successful, Shahzad also allegedly planned to attack four other targets -- Rockefeller center, a Grand Central Terminal, the World Financial Center and the Connecticut headquarters of defence contractor Sikorsky.
Shahzad also allegedly received money from a man in Pakistan who is believed to be working for Tehrik-i-Taliban, according to prosecutors.
The suspect then used this money to buy the Nissan Pathfinder and a 9-millimetre Kel-Tec rifle, which was found inside his car at the airport on the day of his arrest.
The indictment states that on February 25, Shahzad allegedly received USD 5,000 in cash in Massachusetts from a "co-conspirator," who's identified only as "CC-1."
The first round of money was followed by another USD 7,000 that was picked up in Long Island also allegedly from "CC-1."
Three other Pakistani men were arrested in northeast US, last month, under suspicion of giving Shahzad money but so far they have not been criminally charged in connection with the terror plot because it appears they did not know how the money was to be used.
Pir Khan, a 43-year-old taxi driver from Watertown, Boston was arrested along with his cousin, Aftab Khan, 27.
Both are now facing deportation for violating immigration laws.
A third man, Mohammad Shafiq Rahman, a 33-year-old computer programmer from South Portland, Maine, was also arrested.
The US authorities had suspected the hand of the Pakistani-Taliban in the attack since the beginning of the investigation.
"The facts alleged in this indictment show that the Pakistani Taliban facilitated Faisal Shahzad’s attempted attack on American soil," Attorney General Eric H Holder Jr said in a statement."Our nation averted serious loss of life in this attempted bombing, but it is a reminder that we face an evolving threat that we must continue to fight with every tool available to the government," he added.