Form Ia 128s - Iowa Alternative Simplified Research Activities Tax Credit - 2015 Page 2
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32015 IA 128S Alternative Simplified Research Activities Tax Credit Instructions
Form IA 128S is used only if the taxpayer elects to
the increase in research expenses.
claim the Alternative Simplified Research Activities
Adjustments
for
Certain
Acquisitions
and
Tax Credit. Form IA 128 should be used if the regular
Dispositions
Research Activities Tax Credit is claimed. The
If a major portion of a trade or business is acquired
taxpayer may elect to use this alternative method
or disposed of, adjustments must be made to
regardless of the method used in computing the
research expenses for the period before or after the
federal research credit. The taxpayer is not required
acquisition or disposition.
to use this alternative method in computing the
Short Tax Year
Research Activities Tax Credit for subsequent years.
For any short tax year, qualified research
Research expenses qualified for the Iowa Research
expenses are annualized.
Activities Tax Credit are based on the rules
Apportionment of Tax Credit
governing the federal research tax credit; see
The tax credit calculated on lines 1 through 24 by a
Section 41(c) of the Internal Revenue Code (IRC).
partnership, LLC, S corporation, estate, or trust is
Any tax credit in excess of tax liability can be
apportioned to the members. The pass-through
refunded or credited to tax liability for the following
entity must file the IA 128S with its return. On
year.
Schedule K-1 or on an attachment to Schedule K-1,
Innovative Renewable Energy Generation
report the tax credit for each member and instruct
Effective July 1,
2009, eligible research
activities
members to report the apportioned tax credit on line
under the High Quality Jobs Program or under the
26 of form IA 128S and include it with their tax
Enterprise Zone Program include the development
returns.
and deployment costs of innovative renewable
If the taxpayer earns a tax credit by conducting
energy generation components manufactured or
research and is a member of a business that has
assembled in Iowa. This cannot include components
passed-through a tax credit to the taxpayer, calculate
with more than 200 megawatts of installed effective
the tax credit on form IA 128S, lines 1 through 24.
nameplate capacity. These costs are not eligible for
Also enter the pass-through tax credit on line 26.
the federal research tax credit. A separate form IA
Report each separately on the IA 148 Tax Credits
128S must be completed to account for these costs,
Schedule.
which can be included on line 15 of the separate
Supplemental Research Activities Tax Credit
form. The amount of the additional tax credit relating
Businesses with tax incentive contracts under the
to these costs is not eligible for the Supplemental
High Quality Jobs Program or the Enterprise Zone
Alternative Simplified
Research Activities Tax Credit.
Program can be awarded a Supplemental Research
Example: An eligible business with annual gross
Activities
Tax
Credit
by
the
Iowa
Economic
receipts of less than $20 million computes an Iowa
Development Authority (IEDA). The maximum eligible
Alternative Simplified Research Activities Tax Credit
supplemental tax credit is provided in the contract
of $50,000, excluding any costs relating to innovative
along with the tax credit certificate number. For
renewable energy generation components. The
awards made by IEDA prior to July 1, 2010, the
business is allowed a supplemental tax credit of
supplemental tax credit cannot exceed the amount
$76,923, which would result in an Iowa tax credit of
shown on line 24. For awards made on or after July
$126,923. The Iowa tax credit related to innovative
1, 2010, the maximum supplemental tax credit is
renewable
energy
generation
components
is
calculated by multiplying line 22 by 7% or line 19 by
$25,000. This can be added to the regular and
3% for businesses with annual gross receipts of $20
supplemental tax credit, resulting in a total Iowa
million or less, as reported on line 8. For businesses
Alternative Simplified Research Activities Tax Credit
with annual gross receipts exceeding $20 million, the
of $151,923.
maximum supplemental tax credit is calculated by
Trades or Businesses under Common Control
multiplying line 22 by 2.1% or line 19 by 0.9%.
For a group of trades or businesses under common
If the Supplemental Research Activities Tax Credit is
control (whether or not incorporated), the Iowa
earned
by
a
pass-through
entity,
report
the
Alternative Simplified Research Activities Tax Credit is
supplemental tax credit separately on Schedule K-1,
calculated as if all the organizations are one trade or
including the tax credit certificate number. Instruct
business. The tax credit calculated for the group must
members to report the apportioned supplemental tax
be shared among the members of the group on the
credit on line 27 of form IA 128S and include it with
basis of each member’s proportionate contribution to
their tax returns.
41-124b (07/28/15)
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