How to Obtain a Refund of Iowa Withholding

Employers may no longer use the IA843,
Claim for Refund, to receive a refund of withholding tax. 

To obtain a refund, employers must file a quarterly withholding return.   

To receive a refund of Iowa withholding, due to jobs credit:

• File an amended quarterly withholding return for each affected quarter
• On the amended return(s), indicate only the jobs credit earned in that quarter
• NOTE: Do not combine multiple quarters of jobs credits

"Catch up" situation?

The employer should compute the amount of the jobs credit earned for each quarter.  An amended return should be prepared and submitted for each affected quarter showing the correct amount of jobs credit for that quarter.

Reporting the incorrect amount of withholding or jobs credit? 

Employers must file amended returns for all periods covered in their jobs credit agreement and correctly reflect their jobs credit on a quarterly basis.

If an employer has been paying 100% withholding to the Iowa Department of Revenue and failing to claim their jobs credits, amended withholding returns for all affected quarters must be filed. The amended returns should properly show the amount of jobs credit on line 3 of the quarterly return.

If an employer has been reporting the net amount of withholding less the amount of jobs credit on line 1 of the quarterly return, amended returns for all affected quarters must be filed.  Report the total amount of withholding for the quarter on line 1 of the quarterly return. The amount of the jobs credit should be included on line 3 of the withholding quarterly return.

New Jobs Credit (NJC): 1.5% of the gross wages of employees participating in project.

Supplemental Jobs Credit (SJC): An additional 1.5%, for a maximum jobs credit of 3%.

Accelerated Career Education (ACE): Up to 10 percent of the gross program job wage.

NOTE: The withholding return on eFile & Pay has separate reporting lines for NJC and SJC.    

Other Credits

Housing Assistance Credit: 1.5 % of the gross wages paid to employees participating in the housing assistance program. Taken instead of the SJC.

Targeted Jobs Tax Credit: 3% of the gross wages paid to employees.

Employee withholding tax return information is filed electronically through eFile & Pay on this Web site or by telephone at 1-800-514-8296.  

Questions on jobs credit? Contact Russ Shumate

Questions on eFile & Pay? Contact the eFile Service Unit