Iowa Grants Over $42 million in R&D Tax Credits

More than 180 companies in Iowa were granted a tax credit refund in 2015 for conducting research and development activities within the state.

In total, 186 companies received more than $42 million in tax credit refunds last year from the state’s Research Activities Tax Credit program, the Iowa Department of Revenue reported.

The program awards tax credits to companies and individuals that conduct research inside of Iowa. Refunds are provided when tax credit claims made by a company or individual exceed the taxpayers’ state tax liability and they owe no state income tax.

Combined with refunds to individuals, the tax credit program paid out more than $44.4 million in tax credit refunds last year.

The total research activities tax credit claims made last year equaled around $57.1 million.

Overall, 1,031 individuals claimed more than $7 million while 248 corporations claimed more than $50.1 million of the tax credits. A large majority of those claims were made by just 20 companies.

Critics of the program have questioned why so few companies claim such a large part of the tax credits and why the state is providing companies with money when it’s on a tight budget.

Supporters of the research activities tax credit believe the tax credit helps the businesses decide where to locate and where to conduct their research. Providing the tax credit is an incentive to  invest in Iowa.

To learn more about the Iowa R&D credit or the federal credit, contact a Swanson Reed specialist by clicking here.

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