Form 41-124b - Special Instructions And Line Instructions For Form Ia 128s - Iowa Alternative Simplified Research Activities Tax Credit - 2010

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2010 IA 128S Special Instructions and Line Instructions
Form IA 128S is used only if the taxpayer elects to
Lines
- Enter only the portion
9, 10, 11, 15, 16, 17, & 18
use the Alternative Simplified Research Activities
of qualified research expenses that occurred in Iowa.
Credit. The alternative credit is available for tax
Line 20 - Enter the total qualified research expenses
years beginning on or after January 1, 2010. Form IA
in Iowa for the three years before the year in which
128 should be used if the regular research activities
the credit is being determined.
credit is claimed. The taxpayer may elect to use this
Line 24 - Enter this amount on IA 148 Tax Credits
alternative method regardless of the method used in
Schedule under Part II using tax credit code 58.
computing the federal research activities credit. This
Line 25 - If research activities are conducted by
option is for Iowa purposes and is effective only for
eligible businesses under the New Jobs and Income
the current tax year. The taxpayer is not required to
Program, New Capital Investment Program, High
use this alternative method in computing the
Quality Job Creation Program, High Quality Jobs
research activities credit for subsequent years.
Program, or the Enterprise Zone Program, a
Innovative Renewable Energy Generation
Supplemental Alternative Simplified Research
Activities Credit may be allowed. The amount of the
Effective July 1, 2009, research activities under the
supplemental credit is shown in the contract entered
High Quality Jobs Program or under the Enterprise
into between the eligible business and the Iowa
Zone Program include the development and
Department of Economic Development (Iowa DED).
deployment costs of innovative renewable energy
For awards made by the Iowa DED prior to July 1,
generation components manufactured or assembled
2010, the amount of the supplemental credit cannot
in Iowa. This cannot include components with more
exceed the amount shown on line 24. For awards
than 200 megawatts of installed effective nameplate
made by the Iowa DED on or after July 1, 2010, the
capacity. These costs are not eligible for the federal
maximum supplemental credit is calculated by
research credit. A separate form IA 128S must be
multiplying line 22 by 7%, or line 19 by 3%, for
completed to account for these costs, which can be
businesses with gross receipts of $20 million or less.
included on line 15 of the separate form IA 128S.
For businesses with gross receipts exceeding $20
The amount of the additional credit relating to these
million, the maximum supplemental credit is
costs is not eligible for the Supplemental Alternative
calculated by multiplying line 22 by 2.1%, or line 19
Simplified Research Activities Credit.
by 0.9%. Enter this amount on IA 148 Tax Credits
Example: An eligible business computes an Iowa
Schedule under Part II using tax credit code 59.
Alternative Simplified Research Activities Credit
Line 26 - If you received pass-through Alternative
of $50,000 excluding any costs relating to
Simplified Research Activities Credit(s) from a
innovative renewable energy generation
partnership, S corporation, estate, or trust, enter the
components. When the costs relating to
amount of the credit(s) on this line. Enter each credit
innovative renewable energy generation
on IA 148 Tax Credits Schedule under Part II using
components are included on line 15, the Iowa
tax credit code 58 and provide the pass-through
credit is $75,000. The business is allowed a
information under Part IV.
supplemental credit of $50,000 under the original
claim, which would result in an Iowa credit of
Line 27 - If you received pass-through Supplemental
$100,000. This can be added to the additional
Alternative Simplified Research Activities Credit(s)
credit relating to the innovative renewable energy
from a partnership, S corporation, estate, or trust,
generation components of $25,000, resulting in a
enter the amount of the credit(s) on this line and
total Iowa Alternative Simplified Research
enter each credit on IA 148 Tax Credits Schedule
Activities Credit of $125,000.
under Part II using tax credit code 59 and provide the
pass-through information under Part IV.
2010 IA 128S Line Instructions
Line 28 - Add lines 24 through 27 and enter the sum.
This is the total allowable Iowa Alternative
Lines 1 through 8 - Enter the total amounts from
Simplified Research Activities Credit. The IA 148
the federal credit for increasing research activities,
form 6765.
must be completed and attached to the tax return.
41-124b (03/03/11)

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