Information on the Iowa R&D Tax Credit:
The Iowa R&D credit is generated from qualified research activities (QRAs) performed within the state. Qualifying activities are defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.”
State Credit Name: The Iowa Research Activities Tax Credit
Expiration Date: Indefinite
Who Can Apply? Corporations and flow-through entities
Credit Carry Forward: A fully refundable credit, therefore no carry forward.
About the Credit: The credit can be calculated using the regular credit or the alternative simplified credit method.
- The regular credit is 6.5% of the lower QRE’s that exceed a base amount or 50% of QRE’s.
- The alternative simplified credit is 4.55% of QRE’s for the past 3 years.
Notes: Companies awarded by the Iowa Economic Development Authority under the Enterprise Zone Program or the High Quality Jobs Program can calculate a Supplemental Research Activities Credit, which is an additional 10% of the company’s qualifying incremental research expense for gross revenue less than $20 million and 3% for a company with gross revenue over $20 million. The Supplemental Research Activities Credit must be calculated using the same method that was used to calculate The Iowa Research Activities Credit.
Click here to find out if you qualify for the federal research credit.