Form 42-011a - Application For Iowa Wage-Benefits Tax Credit (Page 2 of 2) in pdf

GENERAL INFORMATION

House File 868, adopted by the Iowa Legislature in 2005, provides for a wage-benefits tax credit for a non-

retail, non-service business which creates new jobs related to the location or expansion of the business in

Iowa.

The new job:

must be a full-time job that had not previously existed in the business, and

must be filled by a resident of Iowa, and

must be filled by the new employee for at least 12 months, and

cannot be created as a result of a change in ownership of the business.

The credit is available for individual income, corporation income, franchise, insurance premiums and moneys

and credits tax.

If the annual wage and benefits for the qualified new job equals at least 130% of the annualized average

county wage but less than 160% of the annualized average county wage, the tax credit equals 5% of the

wages and benefits paid.

If the annual wage and benefits for the qualified new job equals at least 160% of the annualized average

county wage, the tax credit equals 10% of the wages and benefits paid.

More information on this credit is detailed in Iowa Administrative Rule 701-52.25. Information on the average

county wage is available at Information on computing

the value of benefits is available at

If the business applying for the credit is a partnership, limited liability company, S corporation or estate or trust

electing to have the income taxed to an individual, the individual may claim the credit based on the pro rata

share of the individual’s earnings from the partnership, limited liability company, S corporation, or estate or

trust.

The total amount of wage-benefits tax credits issued in a fiscal year cannot exceed $10 million, and the credits

are issued on a “first-come, first-serve” basis. If a qualified job is entitled to the tax credit after the first 12

months of wages and benefits paid, the tax credit will be allowed for the next four subsequent tax years as long

as the job is retained. However, the business must still apply for the tax credit for these retained jobs for these

subsequent years.

If the application is approved, the Iowa Department of Revenue will send a tax credit certificate setting forth the

amount of the credit to the business.

This completed application is considered tax return information and is confidential in accordance with Iowa

Code sections 422.20 and 422.72.

MAIL APPLICATION TO:

IOWA DEPARTMENT OF REVENUE

EXAMINATION SECTION

P.O. BOX 10456

DES MOINES, IA 50306-0456

42-011a (9/24/07)

Form 42-011a - Application For Iowa Wage-Benefits Tax Credit Page 2