- Line: 17
- Step: 5
- Step Subject: Tax, Non-refundable Credits & Checkoff Contributions
- Instruction Year: 2023
Enter the total of the credits from Part I of the IA 148 Tax Credits Schedule. IA 148 Tax Credits Schedule must be completed. Your credit claim may be denied if the IA 148 Tax Credits Schedule, or any other required tax credit schedule, is not included with your return.
Agricultural Assets Transfer Tax Credit
An Agricultural Assets Transfer Tax Credit is available for established farmers who lease agricultural assets to beginning farmers to claim against individual and corporation income tax. The agricultural asset transfer tax credit application must have been submitted to the Iowa Agricultural Development Division before May 21, 2019.
The tax credit is only allowed for agricultural assets that are subject to a lease or rental agreement for a term of at least two years, but not more than five years. The taxpayer must meet certain qualifications as established by rules adopted by the Iowa Finance Authority. The beginning farmer must meet the requirements listed in Iowa Code section 16.80 (2019).
The tax credit equals 5% of the amount paid to the taxpayer under a cash rent agreement or 15% of the crop share payments under an agreement in which the payment is exclusively made from the sale of crops or animals.
A tax credit certificate is issued by the Iowa Agricultural Development Division of the Iowa Finance Authority that includes the tax credit certificate number which must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 17. Any tax credit in excess of tax liability, if awarded in tax year 2008 or later can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. A tax credit is not transferable to any other person other than the taxpayer's estate or trust upon the taxpayer's death. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
The lease or rental agreement may be terminated by either the taxpayer or the beginning farmer. If the Iowa Agricultural Development Division determines that the taxpayer is not at fault for the termination, the Division will not issue a tax credit certificate for subsequent years, but any prior tax credit certificates issued will be allowed. If the Division determines that the taxpayer is at fault for the termination, any prior tax credit certificates issued will be disallowed, and the tax credits can be recaptured by the Department of Revenue.
Iowa Code sections 16.80 and 422.11M (2019)
Angel Investor Tax Credit
An Angel Investor Tax Credit, formerly known as Venture Capital Business Tax Credit, equaled 20% of a qualifying investment that is administered by the Iowa Economic Development Authority for investments made prior to July 1, 2015. Effective for investments made on or after July 1, 2015, the tax credit increased to 25% of the equity investment made in a qualifying business and became refundable when claimed against the individual income tax (see line 62 instructions). For other tax types, any tax credit in excess of the tax liability may be carried forward and applied against tax liability for the following three years or until depleted, whichever is earlier.
When the nonrefundable tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 14.
Iowa Code sections 15E.43 and 422.11F(1)
Beginning Farmer Tax Credit
For tax years beginning on or after January 1, 2019, a beginning farmer tax credit is available for established farmers who lease agricultural assets to beginning farmers. The tax credit is available to the established farmer against individual and corporation income tax.
The tax credit is only allowed for agricultural assets that are subject to a lease or rental agreement for a term of at least two years, but not more than five years, and that meets certain requirements listed in Iowa Code section 16.79A, and in administrative rules adopted by the Iowa Finance Authority. The taxpayer and the beginning farmer must meet certain qualifications listed in Iowa Code section 16.79, and in administrative rules adopted by the Iowa Finance Authority.
The tax credit equals 5% of the amount paid to the taxpayer under a cash rent agreement or 15% of the crop share payments under the agreement using the formula established in administrative rule by the Iowa Finance Authority. If the agreement is made on a flexible basis, the tax credit equals the same 5/15 percent calculation and an additional calculation may be made to the extent the rent payment is adjusted after taking into account all risk-sharing factors provided in the agreement. The Iowa Finance Authority will establish criteria for commonly used risk-sharing factors and adjustment limits.
Applications and tax credit awards are reviewed by the Agricultural Development Board. Tax credit certificates issued by the Iowa Agricultural Development Division of the Iowa Finance Authority pursuant to a tax credit award include the tax credit certificate number which must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 17. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. A tax credit is not transferable to any other person other than the taxpayer's estate or trust upon the taxpayer's death. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the individual’s pro rata share of the income of the entity.
The lease or rental agreement may be terminated by either the taxpayer or the beginning farmer. If the Iowa Agricultural Development Division determines that the taxpayer is not at fault for the termination, the Division will not issue a tax credit certificate for subsequent years, but any prior tax credit certificates issued will be allowed. If the Division determines that the taxpayer is at fault for the termination, tax credits claimed for the year during which the termination occurs will be disallowed and recaptured by the Department of Revenue.
Iowa Code sections 16.77 through 16.82A, section 422.11E
Charitable Conservation Contribution Tax Credit
A Charitable Conservation Contribution Tax Credit is available for individual income and corporation income taxpayers equal to 50% of the fair market value of a qualified real property interest located in Iowa that is conveyed as an unconditional charitable donation in perpetuity by the taxpayer to a qualified organization exclusively for conservation purposes.
The maximum amount of the credit is $100,000. The amount of the contribution for which the tax credit is claimed is not deductible as an itemized deduction for Iowa income tax purposes.
The terms “conservation purpose,” “qualified organization,” and “qualified real property interest” mean the same as set forth in section 170(h) of the Internal Revenue Code. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following 20 years or until depleted, whichever is earlier.
Taxpayers filing credit claims for the Charitable Conservation Contribution Tax Credit are required to include a copy of federal Form 8283 – Noncash Charitable Contribution with the Iowa return. If a qualified appraisal of the property or other relevant information is required to be included with the federal Form 8283 for federal tax purposes, the appraisal and other relevant information must also be included with the Iowa return. The credit claimed must be reported on the IA 148 Tax Credits Schedule using tax credit code 20.
Iowa Code section 422.11W
Custom Farming Contract Tax Credit
A Custom Farming Contract Tax Credit was available for landowners who hired a beginning farmer to do custom work during 2015-2017.
A tax credit certificate was issued by the Iowa Agricultural Development Division of the Iowa Finance Authority that includes the tax credit certificate number which must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 24. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. If the tax credit was issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Iowa Code sections 16.78 through 16.82 and 422.11M (2017)
Employer Child Care Tax Credit
An Iowa Employer Child Care Tax Credit is available for taxpayers who qualified for the federal employer-provided child care tax credit authorized under Internal Revenue Code section 45F. The credit is equal to the proportion of the federal credit attributable to expenditures made in Iowa.
The Iowa Economic Development Authority (IEDA) is responsible for evaluating credit applications and verifying eligibility. The Iowa Economic Development Authority will issue a tax credit certificate to qualifying taxpayers.
Taxpayers must calculate their total amount of eligible credits by completing the IA 8882. This form must be submitted with the taxpayer’s return, including the tax credit certificate number provided by IEDA..
Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier.
A tax credit awarded to a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed to the individual, shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 8882, line 22 and on the IA 148 Tax Credit Schedule using tax credit code 30 and the tax credit certificate number.
Iowa Code sections 237A.31 and 422.12O
Endow Iowa Tax Credit
An Endow Iowa Tax Credit is equal to 25% of a taxpayer's endowment gift to a qualified community foundation. The gift must be for a permanent endowment fund established to benefit a charitable cause in Iowa. The Iowa Economic Development Authority (Needs Link) is responsible for registering, authorizing, and controlling the distribution of these tax credits. The amount of the contribution cannot be taken as an itemized deduction for charitable contributions for Iowa income tax purposes.
Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier.
A tax credit awarded to a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed to the individual, shall be claimed by the individual based on the pro rata share of the income of the entity.
When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 03.
Iowa Code section 422.11H
Farm to Food Donation
A Farm to Food Donation Tax Credit can be claimed by a taxpayer who produces a food commodity and donates it to an Iowa food bank or an Iowa emergency feeding organization registered with the Iowa Department of Revenue. The donated food may not be damaged or out-of-condition and unfit for human consumption. A food commodity that meets the requirements for donated foods pursuant to the Federal Emergency Food Assistance Program satisfies this requirement. The tax credit can be claimed against individual and corporation income tax.
The tax credit equals 15% of the value of the food commodities donated in the tax year, when valued according to the federal guidelines for charitable contribution of food under Internal Revenue Code section 170(e)(3)(C), or $5,000, whichever is less. The amount of the contribution for which the tax credit is claimed is not allowed as an itemized deduction for Iowa income tax.
For a donation to be eligible, an Authorized Food Organization Receipt must be received from the food organization at the time of the donation. The taxpayer then must use those receipts to complete the IA 178 Farm to Food Donation Tax Credit Form and include that form with the taxpayer’s return. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier.
If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 178, Part II Total, line 2 and on the IA 148 Tax Credit Schedule.
Iowa Code section 422.11R
Franchise Tax Credit
Iowa imposes a franchise tax on all financial institutions. Therefore, the Franchise Tax Credit is allowed to avoid double taxation of income.
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. The Franchise Tax Credit is also available to members of a financial institution organized as a limited liability company.
The IA 147 must be used to calculate the credit and included with the return. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 04.
The amount of any unused tax credit may not be carried forward and must be reflected as expired on the IA 148 Tax Credits Schedule.
Iowa Code section 422.11
Geothermal Heat Pump Tax Credit
Effective for installations between January 1, 2012 and December 31, 2016, and for installations after January 1, 2019, a Geothermal Heat Pump Tax Credit is available for individual income taxpayers equal to 20% of the federal residential energy efficient property tax credit allowed for geothermal heat pumps provided in section 25D(a)(5) of the Internal Revenue Code for residential property located in Iowa.
The federal credit is claimed on federal form 5695, Residential Energy Credits.
Beginning with 2019 installations, the geothermal tax credit is capped at $1 million total credits per year and is subject to award by the Iowa Department of Revenue. Tax credit applications must be submitted to the Iowa Department of Revenue by May 1 of the year following the year of installation or the application will be denied. Applications must be submitted online at govconnect.iowa.gov.
For installations completed between 2012 and 2016, report the claim on the IA 148 Tax Credits Schedule using tax credit code 23. For installations completed in 2019 or later, the Iowa Department of Revenue will issue tax credit certificates to approved applicants which will have a unique certificate number. Tax credits must be reported on the IA 148 Tax Credits Schedule using tax credit code 23.
Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier.
Iowa Code section 422.11I (2018), Iowa Code section 422.12N
Geothermal Tax Credit
Effective for installations between January 1, 2017 and December 31, 2018, a Geothermal Tax Credit was available for individual income taxpayers equal to 10% of qualified expenditures on a geothermal heat pump on the taxpayer’s residence. The equipment must meet the federal energy star program requirements in effect at the time the expenditure is made. A Geothermal Tax Credit is available for individual income taxpayers equal to 10% of qualified expenditures on a geothermal heat pump on the taxpayer’s residence. The equipment must meet the federal energy star program requirements in effect at the time the expenditure is made.
The IA 140 must be used to calculate the credit and included with the return. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 28. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier.
Iowa Code section 422.10A (2018)
Historic Preservation Tax Credit - Nonrefundable
A Historic Preservation Tax Credit is available for 25% of the qualified rehabilitation expenditures of eligible property in Iowa. This credit is administered by the Iowa Economic Development Authority and the State Historic Preservation Office. When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 05, if nonrefundable.
Applications must be filed during a limited registration period and a scoring system is used to select rehabilitation projects eligible for Historic Preservation Tax Credits. However, credits for small projects defined as projects with qualified rehabilitation expenditures up to $750,000 can apply at any time. The project must be completed within 36 months of the date on which the project agreement was signed.
The Historic Preservation Tax Credit can be transferred to any person or entity. Awardees or transferees can choose to receive the award as a nonrefundable tax credit; in that case, the tax credit is claimed on the IA 148 using tax credit code 05.
For Historic Preservation Tax Credit agreements under Iowa Code section 404A.3(3) entered into on or after January 1, 2023, taxpayers claiming the nonrefundable tax credit must also complete Part V, section A of the IA 148 Tax Credit Schedule before completing Part I of the IA 148.
If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Note: For Iowa income tax purposes, the increase in the basis of the rehabilitated property that would otherwise result from the qualified rehabilitation costs will be reduced by the amount of the tax credit received.
Iowa Code chapter 404A and Iowa Code section 422.11D
Hoover Presidential Library Tax Credit
A 25% tax credit is allowed for donations made to the Hoover Presidential Foundation for the Hoover Presidential Library and Museum Renovation Project Fund. The maximum amount granted to a person cannot exceed 5% of the aggregate amount of tax credits granted. 10% of the aggregate amount of tax credits authorized shall be reserved for those donations in amounts of $30,000 or less.
The Iowa Economic Development Authority is responsible for registering, authorizing, and controlling the distribution of these tax credits. The amount of the contribution cannot be taken as an itemized deduction for charitable contributions for Iowa income tax purposes.
Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier.
A tax credit awarded to a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed to the individual, shall be claimed by the individual based on the pro rata share of the income of the entity.
When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 29.
Iowa Code sections 15E.364 and 422.11T
Housing Investment Tax Credit
For taxpayers approved by the Iowa Economic Development Authority under the Housing Enterprise Zone Program, a Housing Investment Tax Credit is available equal to 10% of the new investment directly related to the building or rehabilitation of homes in an enterprise zone. The credit is based on a maximum of $140,000 for each single-family home or for each unit of a multiple dwelling. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 06. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
The program was eliminated effective July 1, 2014, and was replaced by the Workforce Housing Investment Tax Incentive Program.
Innovation Fund Tax Credit
An Innovation Fund Tax Credit equal to 25% of the taxpayer's equity investment in an innovation fund certified by the Iowa Economic Development Authority.
The Iowa Economic Development Authority issues tax credit certificates including a tax credit certificate number, that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 25. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. The credit is transferable, but may only be transferred once. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Iowa Code sections 15E.52 and 422.11Z
Investment Tax Credit
An Investment Tax Credit of up to 10% of the qualifying investment in real property including any buildings and structures located on the real property, cost of machinery and equipment, and the cost of improvements to real property is available to an eligible business. An eligible business must be approved by the Iowa Economic Development Authority under the High Quality Jobs Program.
When the tax credit is awarded, the taxpayer receives a tax credit certificate with five tax credit certificate numbers that must be reported separately on the IA 148 Tax Credits Schedule when each tax credit is claimed using tax credit code 07. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Iowa Code sections 15.326 through 15.337 and 422.11F(2)
Iowa Alternative Minimum Tax Credit
The Iowa Alternative Minimum Tax Credit is available for taxpayers who paid Iowa alternative minimum tax in prior years based on tax preferences and adjustments. The credit is limited to the extent the regular tax exceeds the Iowa alternative minimum tax in a prior tax year and cannot be claimed in any tax year in which Iowa alternative minimum tax is owed. Unused credits may be carried forward through tax year 2023. This tax credit is repealed on January 1, 2024, for tax years beginning on or after that date. Compute the tax credit using form IA 8801 and include that form with the IA 1040. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 09.
Iowa Code section 422.11B
New Jobs Tax Credit
A new business or an existing business that has increased employment by at least 10% and has a 260E job training agreement with a community college, may qualify for a New Jobs Tax Credit. The credit can be claimed one time for each new job created as a result of the 260E contract or jobs directly related to those jobs in a tax year when the contract is active and the job growth requirement is met. The New Jobs Tax Credit equals the smaller of 6% of the taxable wages that the employer is required to contribute to the State unemployment compensation fund or 6% of the wages paid to the employees in the eligible jobs.
Compute this credit on form IA 133 and include that form with the IA 1040. When the 260E contract is signed, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the New Jobs Tax Credit is claimed using tax credit code 08.
For 2023, this tax credit equals up to $2,166 ($36,100 maximum wages times 6% {.06}) for each job created. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier.
If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 133, line 11 and on the IA 148 Tax Credit Schedule.
Iowa Code section 422.11A
Redevelopment Tax Credit
A Redevelopment Tax Credit equals a percentage of the qualifying investment in redeveloping a brownfield or grayfield site. A brownfield site is defined as an abandoned, idled, or underutilized industrial or commercial facility where expansion or redevelopment is complicated by real or perceived environmental contamination. A grayfield site is defined as a property that has been developed and has infrastructure in place but the property's current use is outdated or prevents a better or more efficient use of the property. Such property includes vacant, blighted, obsolete, or otherwise underutilized property. A higher tax credit rate is available if the redevelopment meets established “green development” standards. Projects must first apply to the Iowa Economic Development Authority to be considered for an award allocation during the annual application process. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 21.
Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. The Redevelopment Tax Credit can be transferred to any person or entity. Non-profit applicants can receive a refundable, but nontransferable, tax credit, in that case the tax credit is claimed on the IA 148 using tax credit code 67. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Note: For Iowa income tax purposes, the increase in the basis of the redeveloped property that would otherwise result from the qualified redevelopment costs will be reduced by the amount of the tax credit received.
Iowa Code sections 15.291,15.293A, 15.293B, 15.294, and 422.11V
Renewable Energy Tax Credit
A producer or purchaser of renewable energy from a facility approved by the Iowa Utilities Board is entitled to a Renewable Energy Tax Credit equal to 1.5 cents per kilowatt hour of electricity, or $4.50 per million BTUs of heat, refuse-derived fuel, methane gas, or other biogas; or $1.44 per 1,000 standard cubic feet of hydrogen fuel.
The facilities approved cannot exceed 363 megawatts of nameplate generating capacity related to wind energy facilities, 63 megawatts of capacity for all other facilities, and 167 billion BTUs of heat related to other facilities. Of those 63 megawatts, 10 megawatts are reserved for solar facilities contracted or owned by certain utility companies.
Small wind energy systems operating in a small wind innovation zone are eligible for the renewable energy tax credit of 1.5 cents per kilowatt-hour of electricity. The small wind energy system must have a nameplate generating capacity of 100 kilowatts or less.
A political subdivision of the state of Iowa, including but not limited to a city, county, township, school district, community college, area education agency, institution under the control of the state board of regents, or any other local commission, association, or tribal council can seek approval from the Iowa Utilities Board to set up a small wind innovation zone.
When the tax credit is awarded by the Iowa Department of Revenue, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 10. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. The credit can be transferred to any person or entity one time. A producer or purchaser can receive the tax credit certificates for a ten-year period beginning the date the purchaser first purchases eligible energy or the date the producer first uses the energy for on-site consumption.
Iowa Code chapter 476C and Iowa Code sections 422.11J and 476.48
S Corporation Apportionment Tax Credit
Individual resident shareholders of S corporations that conduct business within and without Iowa can claim an S Corporation Apportionment Tax Credit. The tax credit is structured so that the S corporation is taxed on the greater of income attributable to Iowa under the single sales factor or actual distributions by the S corporation less federal income tax. If the taxpayer chooses to apportion income using the S Corporation Apportionment Tax Credit, the Out-of-State Tax Credit cannot be claimed for any taxes paid on income received from that S corporation.
Complete form IA 134 and include with the IA 1040. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 11. The amount of any unused tax credit may not be carried forward and must be reflected as expired on the IA 148 Tax Credits Schedule.
Iowa Code section 422.8(2)(b)
School Tuition Organization Tax Credit
A School Tuition Organization Tax Credit is equal to 75% of the amount of a contribution made by a taxpayer to a school tuition organization. The amount of the contribution cannot be taken as an itemized deduction for charitable contributions for Iowa income tax purposes. A school tuition organization must be a charitable organization in Iowa that is exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code that allocates at least 90% of its annual revenue in tuition grants for children who reside in Iowa to allow them to attend a qualified school of their parents' choice. The contribution cannot be used for the direct benefit of any dependent of the taxpayer or any other student designated by the taxpayer.
When the tax credit is awarded by a school tuition organization, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 12. The tax credit shall be claimed in the tax year during which the contribution is made. Any tax credit in excess of the tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Married taxpayers who file separate returns or separately on a combined return must allocate the tax credit between the spouses in the ratio of each spouse’s net respective net income to the combined net income of the taxpayers.
NONRESIDENTS AND PART-YEAR RESIDENTS Special rules apply to nonresidents and part-year residents, including those who are claiming a tax credit of a partnership, limited liability company, S corporation, estate, or trust of which they are a member. Nonresidents or part-year residents of Iowa must determine their tax credit in the ratio of their Iowa source net income to their all source net income. Nonresidents or part-year residents who are married and elect to file separate returns or to file separately on a combined return must allocate the tax credit between the spouses in the ratio of each spouse’s Iowa source net income to the combined Iowa source net income of the taxpayers. For more specific information see Iowa Code section 422.11S(4).
Nonresidents and part-year residents must adjust the school tuition organization tax credit using the following steps:
- Divide Iowa net income (IA 126, line 25) by all-source net income of you and spouse (IA1040, line 26).
- Multiply Step 1 above by the amount of tax credit shown on the tax credit certificate.
- Enter this amount in column D on Part I of the IA 148.
- Enter the difference between the award and what was entered in column D into column G; this amount of the tax credit is considered expired in the tax year of the award and cannot be claimed.
Iowa Code section 422.11S
Solar Energy System Tax Credit
A Solar Energy System Tax Credit is available for the installation costs of solar energy systems in Iowa. In order to claim the tax credit, an application must be completed by May 1 of the year following the year of installation and a tax credit certificate received from the Iowa Department of Revenue. Applications must be submitted online at govconnect.iowa.gov The Department cannot award more than $5 million in solar energy system tax credits per calendar year..
The Solar Energy System Tax Credit is not available for residential installations completed on or after January 1, 2022.
For business installations, the Solar Energy System Tax Credit is equal to 50% of the federal energy property tax credit related to solar energy equipment in section 48(a)(2)(A)(i)(II) of the Internal Revenue Code. The Iowa tax credit for business installations cannot exceed $20,000.
The federal residential credit, and thus the Iowa residential credit, is available for property placed in service before January 1, 2022. The federal residential credit is claimed on federal form 5695, Residential Energy Credits for individuals.
When the tax credit is awarded by the Iowa Department of Revenue, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 22. Any tax credit in excess of tax liability may be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. If the tax credit is awarded to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
Taxpayers who claim this credit are not eligible to receive an award of a Renewable Energy Tax Credit for solar energy production under Iowa Code chapter 476C.
Iowa Code sections 422.11L and 476C.2
Third Party Developer Tax Credit
Taxpayers who are approved by the Iowa Economic Development Authority under the High Quality Jobs Program can be awarded a Third Party Developer Tax Credit for certain sales taxes paid in completion of a High Quality Jobs Program project.
When the tax credit is awarded, the taxpayer must submit an application to the Department of Revenue within one year of project completion date. Upon approving the claim, the Department of Revenue issues another tax credit certificate for the final amount of credit that can be claimed based on the submitted contractor’s statements and invoices, up to the award amount as either a refundable or nonrefundable credit, based on the designation requested by the taxpayer.
The taxpayer then claims the credit using its tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 46 or 47 (see certificate for which code applies). Any tax credit in excess of tax liability may be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier.
If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity.
For High Quality Jobs Program agreements under Iowa Code section 15.330 entered into on or after January 1, 2023, taxpayers claiming the tax credit must also complete Part V, section A of the IA 148 Tax Credit Schedule before completing Part I of the IA 148.
Wind Energy Production Tax Credit
A Wind Energy Production Tax Credit is equal to one cent per kilowatt-hours of electricity sold or used for on-site consumption by a wind energy production facility approved by the Iowa Utilities Board. Approved facilities must have been placed in service on or after July 1, 2005, but before July 1, 2012, to qualify for the tax credit and the aggregate of approved facilities are limited to 50 megawatts of nameplate capacity.
For applications filed on or after March 1, 2008, the facility must also consist of one or more wind turbines connected to a common gathering line which has a combined nameplate capacity of no less than two megawatts and no more than 30 megawatts.
When the tax credit is awarded by the Iowa Department of Revenue, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 16. The Wind Energy Production Tax Credit is transferable.
Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. In cases where the applicant is a partnership, limited liability company, S corporation, estate, trust, or other reporting entity which elects to have income taxed directly to an individual and the applicant is also eligible to receive renewable electricity production tax credits authorized under section 45 of the Internal Revenue Code, the credit does not have to be based upon the individual's pro rata share of earnings from the entity.
Iowa Code chapters 476B and Iowa Code section 422.11J
Workforce Housing Investment Tax Credit
The Workforce Housing Tax Incentives Program replaced the Housing Enterprise Zone Program effective July 1, 2014, offering a tax credit on investment in housing related to acquisition, repair, or redevelopment of a housing project, or related to new construction of housing in a distressed workforce housing community. The project must be approved by the Iowa Economic Development Authority prior to investment. The Workforce Housing Investment Tax Credit award is limited to 10% of $150,000 for each home or individual unit that is part of the housing project, or 20% of such amount if the housing project is located in a small city or certain declared disaster areas. The program contains other requirements related to qualifying housing projects and maximum tax incentives. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 27. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. The Workforce Housing Investment Tax Credit is transferable to any person or entity.
Note: For Iowa income tax purposes, the increase in the basis of the housing property that would otherwise result from the qualified investment will be reduced by the amount of the tax credit received.
Iowa Code sections 15.351 through 15.356 and 422.11C