 |
 |
 |
 |
 |
 |
 |
 |
54. OTHER IOWA CREDITS. Enter the total of the credits listed:
a. Franchise Tax Credit: If a financial institution as defined in Section 581 of the Internal Revenue Code elects to file as an S corporation for Federal income tax purposes and therefore have its income taxed directly to the shareholders, those shareholders qualify for a Franchise Tax Credit.
This credit is calculated by first determining the taxpayer’s pro rata share of the financial institution’s Iowa net income, line 12 of the IA 1120F. This amount is then subtracted from the individual’s taxable income, line 42 of the IA1040.
Next, determine a tax on this amount and subtract from this the total credits from line 50 of the IA1040.
Then subtract this figure from the tax, line 51 of the IA 1040.
This amount is the Franchise Tax Credit allowed. It cannot exceed the taxpayer’s pro rata share of the franchise tax paid by the financial institution. Attach a separate schedule to the IA 1040 showing how the credit was computed.
b. Minimum Tax Carry Forward Credit: You may be eligible for this credit if you paid Iowa minimum tax in 1987 or following years based on tax preferences and adjustments other than the appreciated property charitable deduction tax preference. Compute on form IA 8801 and attach to the IA 1040.
c. New Jobs Credit: If you started a new business or increased employment of your existing business by 10% and your business had a 260E agreement with a vocational school or area community college, you may qualify for the New Jobs Credit. This credit includes the training of existing employees. Compute this credit on form IA 133 and attach to your return.
d. S Corp Credit: Iowa resident shareholders of all S corporations doing business within and without Iowa may be eligible for a credit. This credit is based on the ratio of the greater of the portion of S Corporation income attributable to Iowa sources or the portion of any distributions made from income on which Iowa income tax has not been paid to total income. Complete form IA 134 and attach to the IA 1040.
e. Other Business Credits: These include the Iowa investment tax credit, eligible housing business credit and eligible development business credit. Attach documentation proving eligibility.