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66. OTHER REFUNDABLE CREDITS.

Enter the total of other credits from Part II of the IA 148 Tax Credits Schedule.

IA 148 Tax Credits Schedule (pdf) must be completed.


Assistive Device Credit

Biodiesel Blended Fuel Credit

Claim of Right Credit

E85 Gasoline Promotion Credit

Ethanol Promotion Credit

Historic Preservation Credit

Investment Tax Credit

Research Activities Credit

Wage-Benefit Credit

Assistive Device Credit

A taxpayer who is a small business that purchases, rents, or modifies an assistive device or makes workplace modifications for an individual with a disability is eligible for this credit. The credit is limited to 50% of the first $5,000 paid for the assistive device or workplace modification. The Iowa Department of Economic Development certifies those eligible for the credit and issues tax credit certificates for eligible claimants. This is a refundable credit.

This credit was repealed effective on July 1, 2009, for individual income tax, but is still available for corporation income tax.

422.11E & 422.33(9)

Biodiesel Blended Fuel Tax Credit

This is not a motor fuel tax credit or refund. It is an income tax credit. Attach a copy of form IA 8864 to your Iowa income tax return.

A biodiesel blended fuel tax credit is available to retail dealers of diesel fuel who operate motor fuel pumps at a retail motor fuel site. Tank wagons are considered retail motor fuel sites.

Beginning January 1, 2009, this credit must be calculated separately for each retail motor fuel site operated by the taxpayer. To qualify for the tax credit, 50% or more of the gallons of diesel fuel sold by the dealer through motor fuel pumps at that retail motor fuel site in Iowa must be biodiesel fuel containing a minimum percentage of 2% by volume of biodiesel.

The tax credit equals 3 cents multiplied by the total number of gallons of biodiesel blended fuel gallons sold during the retail dealer's tax year.

Any credit in excess of the tax liability may be refunded or, in the alternative, credited to the tax liability for the following year. If the biodiesel blended fuel tax credit is earned by partnerships, limited liability companies, S corporations, estates, or trusts where income is taxed directly to the individual, the credit can be claimed by the individual based on the pro rata share of the individual's earnings in the entity.

422.11P and 422.33(11C)

Claim of Right Credit

A credit may be taken if there was income repaid in the 2010 tax year that was reported and taxed on a prior Iowa return. To calculate the credit, recompute the tax in the prior year without the repaid income. Enter the tax reduction that was calculated as a credit on this line. However, it may be to your advantage to take an income adjustment on line 24. You may take either the credit on this line or a deduction of the amount repaid on line 24, but not both.

Example of Claim of Right Credit: A taxpayer received a $5,000 bonus in 2008 and reported it on the 2008 Iowa return. In 2010 the taxpayer's employer advised that the bonus was awarded in error and was to be repaid. The bonus was repaid by the end of 2010. After recomputing the 2008 Iowa return, there is a $440 reduction in tax. The taxpayer may claim a credit of $440 on line 66 of the 2010 Iowa return.

422.5(10)

E85 Gasoline Promotion Tax Credit

This is not a motor fuel tax credit or refund. It is an income tax credit. Attach a copy of form IA 135 to your Iowa income tax return.

An income tax credit is available to retail dealers of gasoline who sell E85 gasoline through motor fuel pumps during the tax year.

Any credit in excess of the tax liability is refundable. The credit can be claimed on form IA 135.

The amount of the credit is determined by multiplying the total number of E85 gallons sold by the following rate:

  • Calendar year 2010: 20 cents
  • Calendar year 2011: 10 cents
  • Calendar year 2012: 9 cents
  • Calendar year 2013: 8 cents
  • Calendar year 2014: 7 cents
  • Calendar year 2015: 6 cents
  • Calendar year 2016: 5 cents
  • Calendar year 2017: 4 cents
  • Calendar year 2018: 3 cents
  • Calendar year 2019: 2 cents
  • Calendar year 2020: 1 cent
  • Calendar year 2021 and subsequent: 0 cents

Retail dealers of gasoline whose tax year is not on a calendar year basis may compute the tax credit on the gallons of E85 gallons sold during the year using the applicable credit amounts as shown above. A retail dealer of gasoline whose tax year ends prior to December 31, 2020, can continue to claim the tax credit in the following tax year for any E85 gallons sold through December 31, 2020.

A retail dealer whose tax year is not on a calendar year basis and who did not claim the E85 credit on the previous return may claim the credit for the current tax year for the period beginning on January 1 of the previous tax year to the last day of the previous tax year. This section is repealed on January 1, 2021.

Any credit in excess of the tax liability may be refunded or, in the alternative, credited to the tax liability for the following year. If the E85 gasoline promotion tax credit is earned by partnerships, limited liability companies, S corporations, estates, or trusts where income is taxed directly to the individual, the credit can be claimed by the individual based on the pro rata share of the individual's earnings in the entity.

422.11O and 422.33(11B)

Ethanol Promotion Tax Credit

Effective January 1, 2009, an ethanol promotion tax credit is available to retail dealers of ethanol blended gasoline. This replaces the ethanol blended gasoline tax credit.

The amount of the tax credit is based on the pure amount of ethanol gallons sold; for example, 10 gallons of E10 equals 1 gallon of pure ethanol. The credit is repealed on January 1, 2021.

The amount of the tax credit depends on whether the retail dealer attains a biofuel threshold standard, and how many gallons of motor fuel are sold in a year. The biofuel threshold standards for retail dealers who sell more than 200,000 gallons in a year, compared with the biofuel threshold standards for dealers who sell 200,000 gallons or less in a year, are shown below.

Biofuel Threshold Standards

Calendar Year Percentage more than 200,000 Percentage 200,000 or less
2010 11% 6%
2011 12% 10%
2012 13% 11%
2013 14% 12%
2014 15% 13%
2015 17% 14%
2016 19% 15%
2017 21% 17%
2018 23% 19%
2019 25% 21%
2020 25% 25%

 

The credit is calculated separately for each retail motor fuel site. For any year in which the retail dealer has met the threshold, the credit is 6 ½ cents of each gallon of pure ethanol sold. If the retail dealer misses the threshold by 2% or less, the credit is 4 ½ cents of each gallon of pure ethanol sold. If the retail dealer misses the threshold by more than 2% but not more than 4%, the credit is 2 ½ cents of each gallon of pure ethanol sold. If the retail dealer misses the threshold by 4% or more, then no credit is allowed.

The retail dealer determines the biofuel percentage by summing the pure ethanol gallons and the pure biodiesel gallons sold during the calendar year, and dividing this sum by the total gasoline gallons sold during the calendar year. While the biodiesel gallons are included in the computation of the biofuel percentage to determine if the threshold is met, only the pure ethanol gallons sold are used in determining the amount of the credit.

Example: A retail dealer only operates one motor fuel site. The number of gallons of gasoline sold at this site in 2010 equals 100,000 gallons. This consisted of 5,000 gallons of E85, 80,000 gallons of E10, and 15,000 gallons not containing ethanol. The dealer also sold 15,000 gallons of diesel fuel at this site during 2010, of which 5,000 gallons was B2 (2% biodiesel). The pure ethanol gallons is 12,250 (5,000 x 85% = 4,250. 80,000 x 10% = 8,000. 4,250 + 8,000 = 12,250). The pure biodiesel gallons sold is 100, or 5,000 x 2%. The total of 12,250 and 100, or 12,350, is divided by the total gasoline gallons sold of 100,000 to arrive at a biofuel percentage of 12.35%. Since this exceeds the 6% threshold for a dealer selling less than 200,000 gallons, the credit is 6 ½ cents x 12,250, or $796.

A retail dealer of gasoline will be able to claim the ethanol promotion tax credit even if the dealer claims an E85 gasoline promotion tax credit for the same tax year for the same ethanol gallons sold. For retail dealers of gasoline whose tax year is not on a calendar year basis, the retail dealer may compute the tax credit on the gallons of pure ethanol sold during the year using the applicable credit amounts as shown above. Any credit in excess of the tax liability is refundable. This credit is claimed on form IA 137 (pdf).

422.11N and 422.33(11A)

Historic Preservation and Cultural and Entertainment District Tax Credit

A historic preservation and cultural and entertainment district tax credit is available for 25% of the qualified costs of rehabilitation of eligible property in Iowa. This credit is administered by the state historic preservation office of the Iowa Department of Cultural Affairs.

Any credit in excess of the tax liability is fully refundable and not discounted.

The historic preservation and cultural and entertainment district tax credit can be transferred to any person or entity.

Effective July 1, 2009: The amount of aggregate tax credits is $50 million starting with the fiscal year beginning July 1, 2009, through the fiscal year beginning July 1, 2011. For the fiscal year beginning July 1, 2012, the amount of aggregate tax credits is $45 million.

The total of $50 million of tax credits available in a fiscal year are allocated as follows:

  • $5 million for projects with final qualified rehabilitation costs of $500,000 or less
  • $15 million for projects located in cultural and entertainment districts or projects identified in Iowa great places agreements
  • $10 million for disaster recovery projects
  • $10 million for projects that involve the creation of more than 500 permanent jobs
  • $10 million for any other eligible project

For projects that involve the creation of more than 500 permanent jobs, the jobs must be created within two years of the date the tax credit certificate is issued. The credit is subject to recapture by the Department of Revenue if the jobs are not created within two years.

For credits reserved prior to July 1, 2009, the project must be completed by June 30, 2011, to remain eligible for the tax credit. For credits reserved on or after July 1, 2009, the project must be completed within 36 months of the date on which the project application was approved.

This information is based on rule 701-42.15 .

422.11D, 422.33(10), 422.60(4) and 404A.2

Investment Tax Credits (IA 3468 pdf)

Value-added agricultural projects or biotechnology-related processes

Eligible businesses involved in the production of value-added agricultural products or biotechnology-related processes may elect to refund all or a portion of the unused credit by applying for a tax credit certificate from the Department of Economic Development. The credit amount shown on the tax credit certificate may be claimed on line 66.

This credit was repealed April 15, 2010, so 2010 is the last year that this credit can be claimed.

For a more detailed description of this credit, see line 53.

Research Activities Credit

IA 128 (pdf) or IA 128S (pdf)

 

Starting in 1985, a credit became available for 6.5% of Iowa's apportioned share of qualifying expenditures for increasing research activities. The Iowa research credit is based on the federal research activities credit, with the Iowa credit based on the ratio of Iowa research expenditures over total research expenditures.

Effective with the enactment of Senate File 512 on April 12, 2011, Iowa has coupled with the " Alternative Simplified Research Credit" which can be elected at the federal level. This credit is claimed on form IA 128S. A taxpayer may choose each year whether to take the alternative simplified credit or the "regular" research credit for Iowa tax purposes.

Taxpayers who are approved by the Iowa Department of Economic Development under the New Jobs and Income Program or the Enterprise Zone program prior to July 1, 2010, can double their research credit claimed on either form IA 128 or IA 128S. The research credit can also be doubled under the High Quality Jobs Program for taxpayers approved by the Department of Economic Development if certain criteria is met. For approvals on or after July 1, 2010, the amount of the supplemental research activities credit depends upon the gross revenues of the eligible business. See instructions to the IA 128 and IA 128S for more information.

Sections 422.10 and 422.33(5) and 15.335 and 15A.9(8)

Wage-Benefit Tax Credit

For new jobs created on or after June 9, 2005, a wage-benefit tax credit is available to non-retail, non-services businesses which create new jobs related to the location or expansion of a business in Iowa. This will affect tax years ending on or after June 9, 2006. If the annual wage and benefits equals at least 130% of the average county wage, but less than 160%, the tax credit equals 5% of the wages and benefits paid. If the annual wage and benefits is 160% or greater of the average county wage, the tax credit equals 10% of the wages and benefits paid.

Businesses must apply to the Iowa Department of Revenue for this credit, and the amount of credit is limited to $4 million for 2010. The credits are issued on a "first-come, first-serve" basis. If the business retains the job, the tax credit will be allowed for the subsequent four years. Any tax credit in excess of the tax liability can be refunded.

Sections 422.11L, 422.33(18) and 422.60(10)

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