Targeted Jobs Withholding Tax Credit: The Targeted Jobs Withholding Tax Credit is a pilot program that allows diversion of withholding funds paid by an employer, and matched by a designated pilot city, to create economic incentives directed toward the growth and expansion of targeted businesses. Withholding agreements allow up to 3% of gross wages paid by the employer to be directed to the project budget on a quarterly basis, for a term of up to 10 years.
New Jobs Tax Credit: Provides a one-time corporate income tax credit to businesses that increase the size of their workforce by at least 10% and participate in the New Jobs Training (260E) Program. The maximum credit per new job is resized annually and is $1,836 for 2019. Tax credits are non-refundable and non-transferable; however unused tax credits may be carried forward for up to 10 years.
Angel Investor Tax Credit: Program designed to increase availability and accessibility of early state capital for qualified and pre-certified Iowa business. Provides a tax credit of 25% of an investor’s equity investment in a qualified business. Limit of $100,000 credits per year for investors, $500,000 per year for businesses, and total annual credit amount is capped at $2 million. Credits can apply to investor’s personal income tax, corporate income tax, franchise tax, gross premiums tax or moneys and credits taxes. Credits are refundable for investors who file personal net income tax.
Research Activities Tax Credit (R&D): All businesses within the state that meet the qualifications of the federal research credit may claim the Iowa Research Activities Tax Credit which is equal to 6.5% of qualified research expenditures in Iowa above a base amount. Supplemental research credits are available to companies that participate in the High Quality Jobs Program. Any research credit in excess of the tax liability may be refunded to the taxpayer or credited for the following year.
Iowa Industrial New Jobs Training (260E): Administered by Iowa's 15 community colleges, this discretionary training program is financed through bonds sold by the colleges. Depending on the wages of the trainees, a business will divert 1.5% or 3.0% of its Iowa state withholding taxes generated by the new positions to the community college to retire the bonds. This structure enables the training to be of low to no cost since the bonds are retired with dollars that otherwise would have been paid to the state as withholding taxes.
Economic Development Set-Aside (EDSA): Businesses that create or retain jobs in certain counties or cities may qualify for a direct or forgivable loan of up to $1 million. To be eligible for funding under this discretionary program, a company must demonstrate proof of a funding gap, locational disadvantage or insufficient return on investment. In addition, jobs created or retained must pay at least 80% of the area average wage and at least 51% of these positions must be filled by low and moderate income individuals as defined by the U.S. Department of Housing and Urban Development.
High Quality Jobs Program: Companies that create or retain jobs and make capital investments may qualify for a variety of incentives, including property tax exemptions of up to 100% of the incremental increased in assessed valuation not to exceed 20 years, negotiable investment tax credits up to 10% of qualifying investment, sales and use tax refunds, and an enhanced Research Activities Credit (R&D). Direct financial assistance, in the form of loans/forgivable loans, is also available from the High Quality Jobs program.