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66. OTHER REFUNDABLE CREDITS. Enter
the total of these refundable credits.
a. Assistive Device Tax Credit:
For tax years beginning on or after January 1, 2001, eligible small businesses can take an assistive device tax credit for purchasing, renting or modifying an assistive device or making workplace modifications for employees with disabilities. The certificate for entitlement to the credit, issued by the Iowa Department of Economic Development, must be attached to the Iowa return. The certificate is valid only for the tax year in which the assistive device was installed or workplace modifications were completed. If the credit is taken for Iowa purposes, the small business shall not deduct on the Iowa return the cost of assistive devices or workplace modifications deducted on the Federal return.
See Rule 701-42.14.
b. Claim of Right Credit:
A credit may be taken if there was income repaid in the 2004 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 2001 and reported it on the 2001 Iowa return. In 2004 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 2004. After recomputing the 2001 Iowa return, there is a $440 reduction in tax. The taxpayer may claim a credit of $440 on line 66 of the 2004 Iowa return.
c. Ethanol Blended Gasoline Tax Credit – form IA 6478:
This is not a motor fuel tax credit or refund. It is an income tax credit. Attach a copy of form IA 6478 to your Iowa income tax return.
Effective January 1, 2002, a retail gasoline dealer may claim an ethanol blended gasoline tax credit against that taxpayer’s individual income tax liability. The taxpayer must operate at least one service station at which more than 60 percent of the total gallons of gasoline sold and dispensed through one or more metered pumps by the taxpayer in the tax year is ethanol blended gasoline. The tax credit shall be calculated separately for each service station site operated by the taxpayer. The amount of the credit for each eligible service station is two and one-half cents multiplied by the total number of gallons of ethanol blended gasoline sold and dispensed through all metered pumps located at that service station during the tax year in excess of 60 percent of all gasoline sold and dispensed through metered pumps at that service station during the tax year.
Example: A taxpayer sold 100,000 gallons of gasoline at the taxpayer’s service station site during the tax year, 70,000 gallons of which were ethanol blended gasoline. The taxpayer is eligible for the credit since more than 60 percent of the total gallons sold were ethanol blended gasoline. The number of gallons in excess of 60 percent of all gasoline sold is 70,000 less 60,000, or 10,000 gallons. Two and one-half cents multiplied by 10,000 equals a $250 credit available.
The credit may be calculated on form IA 6478. The credit must be calculated separately for each service station operated by the taxpayer. Therefore, if the taxpayer operates more than one service station site, it is possible that one station may be eligible for the credit while another station may not. The credit can be taken only for those service station sites for which more than 60 percent of gasoline sales involve ethanol blended gasoline.
The following definitions are applicable:
“Ethanol blended gasoline” means the same as defined in Iowa Code section 452A.2.
“Gasoline” means gasoline that meets the specifications required by the department of agriculture and land stewardship pursuant to Iowa Code section 214A.2 that is dispensed through a metered pump.
“Metered pump” means a motor vehicle fuel pump licensed by the department of agriculture and land stewardship pursuant to Iowa Code chapter 214.
“Retail dealer” means a retail dealer as defined in Iowa Code section 214A.1 who operates a metered pump at a service station.
“Sell” means to sell on a retail basis.
“Service station” means each geographic location in this state where a retail dealer sells and dispenses gasoline on a retail basis.
Iowa Administrative Rule 42.16
Allocation of credit to owners of a business entity. If the taxpayer that was entitled to the ethanol blended gasoline tax credit is a partnership, limited liability company, S corporation, estate, or trust, the business entity shall allocate the allowable credit to each of the individual owners of the entity on the basis of each owner’s pro-rata share of the earnings of the entity to the total earnings of the entity. Therefore, if a partnership has an ethanol blended gasoline tax credit of $3,000 and one partner of the partnership receives 25 percent of the earnings of the partnership, that partner would receive an ethanol blended gasoline tax credit for the tax year of $750 or 25 percent of the total ethanol blended gasoline tax credit of the partnership.
d. Property Rehabilitation Tax Credit:
For tax years beginning on or after January 1, 2001, eligible businesses can take a property rehabilitation tax credit for qualifying rehabilitation costs for eligible property. “Eligible businesses” includes taxpayers who are subject to the franchise tax on financial institutions and taxpayers who are subject to the premiums receipt tax for insurance companies. The property rehabilitation tax credit certificate issued by the Iowa Department of Cultural Affairs must be attached to the Iowa return. The credit is limited to the tax shown on the return. However, any credit in excess of the tax liability is eligible for refund at a discounted amount.
Effective for tax years beginning on or after January 1, 2003, the property rehabilitation tax credit can be transferred to another person or entity. If the credit is transferred, a replacement tax credit certificate must be issued by the Iowa Department of Cultural Affairs. Any consideration received for the transfer of the tax credit shall not be included as income for Iowa tax purposes, and any consideration paid for the transfer of the tax credit shall not be deductible for Iowa tax purposes.
This information is based on rule 701-42.15.
e.
Refundable Investment Tax Credits (IA3468)
(value-added agricultural
projects or biotechnology-related processes)
An investment tax credit can be taken by eligible businesses for qualifying new investments.
The credit is determined by multiplying the qualifying new investment by 10 percent, except for the New Capital Investment Program, which has various rates of 1% - 5%, depending on the number of jobs created.
New investment includes the cost of machinery and equipment purchased for use in the operation of the eligible business, and the cost of improvements to real property. New investment also includes the cost of land and any buildings and structures located on the land.
The credit can be taken in the year the qualifying asset is placed in service. For the housing enterprise zone program, the credit can be taken in the year the home is ready for occupancy.
Any credit in excess of the tax liability for the tax year may be credited to the tax liability for the following 7 tax years or until depleted, whichever is earlier. Eligible businesses involved in the production of value-added agricultural products 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.
New Capital Investment Program under Iowa Code section 15.384
For tax years beginning on or after January 1, 2003, an investment tax credit is available to eligible businesses approved by the Iowa Department of Economic Development, ranging from 1% to 5%, depending on the number of new jobs created. If the business is a partnership, subchapter S corporation, limited liability company, cooperative organized under chapter 501 and filing as a partnership for federal tax purposes, or estate or trust electing to have the income taxed directly to the individual, an individual may claim the tax credit allowed. The amount claimed by the individual shall be based upon their pro rata share of the entity's earnings.
An eligible business, including a cooperative described in section 521 of the Internal Revenue Code, whose project primarily involves the production of value-added agricultural products or uses biotechnology-related processes may elect to receive a refund of all or a portion of any unused amount of this tax credit. In addition, such an eligible business that is a cooperative described in section 521 of the Internal Revenue Code which is required to file an Iowa corporate income tax return, and whose project primarily involves the production of ethanol (NOTE: For tax years beginning on or after 7-1-03, the requirement that the project primarily involve the production of ethanol is removed), may elect to transfer all or a portion of its tax credit to its members. The amount of tax credit transferred and claimed by a member shall be based upon the pro rata share of the member's earnings of the cooperative
New Jobs and Income Program under Iowa Code Section 15.329
This includes qualifying businesses involved in the production of value-added agricultural products and cooperatives described in Section 521 of the Internal Revenue Code.
Eligible Development Business Program under Iowa Code Section 15E.193C
Enterprise Zone Income Tax Credits under Iowa Code Section 15E.193
Eligible businesses approved by the Department of Economic Development may claim an investment tax credit up to 10% of their new investment. If the business is a partnership, subchapter S corporation, limited liability company, cooperative organized under chapter 501 and filing as a partnership for Federal tax purposes, or estate or trust electing to have the income taxed directly to the individual, an individual may claim the tax credit allowed. The amount claimed by the individual shall be based upon their pro rata share of the entity's earnings.
An eligible business, including a cooperative described in section 521 of the Internal Revenue Code, whose project primarily involves the production of value-added agricultural products or uses biotechnology-related processes, may elect to receive a refund of all or a portion of any unused amount of this tax credit. In addition, such an eligible business that is a cooperative described in section 521 of the Internal Revenue Code which is required to file an Iowa corporate income tax return, and whose project primarily involves the production of ethanol (NOTE: For tax years beginning on or after 7-1-03, the requirement that the project primarily involve the production of ethanol is removed), may elect to transfer all or a portion of its tax credit to its members. The amount of tax credit transferred and claimed by a member shall be based upon the pro rata share of the member's earnings of the cooperative.
f. Research Activities Credit:
You may be eligible for this credit or alternative research credit if you increased Iowa research activities in 2004 over the activities for the base period. For details on qualification for the credit and how to compute the credit see form IA 128 or IA 128A.