Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 304 - Adjustments to Computed Tax and Tax Credits › Rule 701-304.18 - Assistive Device Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Effective for tax years beginning on or after January 1,
				  2000, a taxpayer that is a small business that purchases, rents, or modifies an
				  assistive device or makes workplace modifications for an individual with a
				  disability who is employed or will be employed by the taxpayer may qualify for
				  an assistive device tax credit, subject to the availability of the credit. The
				  assistive device credit is equal to 50 percent of the first $5,000 paid during
				  the tax year by the small business for the purchase, rental, or modification of
				  an assistive device or for making workplace modifications. Any credit in excess
				  of the tax liability may be refunded or applied to the taxpayer's tax liability
				  for the following tax year. If the taxpayer elects to take the assistive device
				  tax credit, the taxpayer shall not deduct for Iowa income tax purposes any
				  amount of the cost of an assistive device or workplace modification that is
				  deductible for federal income tax purposes. A small business will not be
				  eligible for the assistive device credit if the device is provided for an owner
				  of the small business unless the owner is a bona fide employee of the small
				  business.
(1)
Submitting
				applications for the credit.
A small business that wishes to receive
				the assistive device tax credit must submit an application for the credit to
				the Iowa department of economic development and provide other information and
				documents requested by the Iowa department of economic development. If the
				taxpayer meets the criteria for qualification for the credit, the Iowa
				department of economic development will issue the taxpayer a certificate of
				entitlement for the credit. However, the aggregate amount of assistive device
				tax credits that may be granted by the Iowa department of economic development
				to all small businesses during a fiscal year cannot exceed $500,000. The
				certificate of entitlement for the assistive device credit shall include the
				taxpayer's name, the taxpayer's address, the taxpayer's tax identification
				number, the estimated amount of the tax credit, the date on which the
				taxpayer's application was approved, the date when it is anticipated that the
				assistive device project will be completed and a space on the application where
				the taxpayer shall enter the date that the assistive device project was
				completed. The certificate of entitlement will not be considered to be valid
				for purposes of claiming the assistive device credit on the taxpayer's Iowa
				income tax return until the taxpayer has completed the assistive device project
				and has entered the completion date on the certificate of entitlement form. The
				tax year of the small business in which the assistive device project is
				completed is the tax year for which the assistive device credit may be claimed.
				For example, in a case where taxpayer A received a certificate of entitlement
				for an assistive device credit on September 15, 2007, and completed the
				assistive device workplace modification project on January 15, 2008, taxpayer A
				could claim the assistive device credit on taxpayer A's 2008 Iowa return,
				assuming that taxpayer A is filing returns on a calendar-year basis.
The department of revenue will not allow the assistive device
				  credit on a taxpayer's return if the certificate of entitlement or a legible
				  copy of the certificate is not included with the taxpayer's income tax return.
				  If the taxpayer has been granted a certificate of entitlement and the taxpayer
				  is a partnership, limited liability company, S corporation, estate, or trust,
				  where the income of the taxpayer is taxed to the individual owner(s) of the
				  business entity, the taxpayer must provide a copy of the certificate to each of
				  the owners with a statement showing how the credit is to be allocated among the
				  individual owners of the business entity. An individual owner shall include a
				  copy of the certificate of entitlement and the statement of allocation of the
				  assistive device credit with the individual's state income tax return.
(2)
Definitions.
The following definitions are applicable to this rule:
"Assistive device"
means any item, piece of
				  equipment, or product system which is used to increase, maintain, or improve
				  the functional capabilities of an individual with a disability in the workplace
				  or on the job. "Assistive device" does not mean any medical device, surgical
				  device, or organ implanted or transplanted into or attached directly to an
				  individual. "Assistive device" does not include any device for which a
				  certificate of title is issued by the state department of transportation, but
				  does include any item, piece of equipment, or product system otherwise meeting
				  the definition of "assistive device" that is incorporated, attached, or
				  included as a modification in or to such a device issued a certificate of
				  title.
"Business entity"
means partnership, limited
				  liability company, S corporation, estate, or trust, where the income of the
				  business is taxed to each of the individual owners of the business, whether the
				  individual owner is a partner, member, shareholder, or beneficiary.
"Disability"
means the same as defined in
				  Iowa Code section 15.102. Therefore, "disability"
				  means, with respect to an individual, a physical or mental impairment that
				  substantially limits one or more of the major life activities of the
				  individual, a record of physical or mental impairment that substantially limits
				  one or more of the major life activities of the individual, or being regarded
				  as an individual with a physical or mental impairment that substantially limits
				  one or more of the major life activities of the individual. "Disability" does
				  not include any of the following:
1.
				Homosexuality or bisexuality.
2.
				Transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, gender
				identity disorders, or other sexual behavior disorders.
3. Compulsive gambling, kleptomania, or
				pyromania.
4. Psychoactive
				substance abuse disorders resulting from current illegal use of
				drugs.
5. Alcoholism.
"Employee"
means an individual who is
				  employed by the small business and who meets the criteria in Treasury
				  Regulation §31.3401(c)
				  -1(b), which is the definition of an employee for federal income tax
				  withholding purposes. An individual who receives self-employment income from
				  the small business shall not be considered an employee of the small business
				  for purposes of this rule.
"Small business"
means that the business
				  either had gross receipts in the tax year before the current tax year of $3
				  million or less or employed not more than 14 full-time employees during the tax
				  year prior to the current tax year.
"Workplace modifications"
means physical
				  alterations to the office, factory, or other work environment where the
				  disabled employee is working or will work.