Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 304 - Adjustments to Computed Tax and Tax Credits › Rule 701-304.12 - New Jobs Credit

Current through Register Vol. 47, No. 3, July 24, 2024
A tax credit is available to an individual who has entered
				  into an agreement under Iowa Code chapter 260E and has increased employment by
				  at least 10 percent.
(1)
Definitions.
a. The term
				"new jobs" means those jobs directly resulting from a project covered by an
				agreement authorized by Iowa Code chapter 260E (Iowa industrial new jobs
				training Act) but does not include jobs of recalled workers or replacement jobs
				or other jobs that formerly existed in the industry in this state.
b. The term "jobs directly related to new
				jobs" means those jobs which directly support the new jobs but do not include
				in-state employees transferred to a position which would be considered to be a
				job directly related to new jobs unless the transferred employee's vacant
				position is filled by a new employee. The burden of proof that a job is
				directly related to new jobs is on the taxpayer.
EXAMPLE A. A taxpayer who has entered into a chapter 260E
				  agreement to train new employees for a new product line, transfers an in-state
				  employee to be foreman of the new product line but does not fill the
				  transferred employee's position. The new foreman's position would not be
				  considered a job directly related to new jobs even though it directly supports
				  the new jobs because the transferred employee's old position was not
				  refilled.
EXAMPLE B. A taxpayer who has entered into a chapter 260E
				  agreement to train new employees for a new product line transfers an in-state
				  employee to be foreman of the new product line and fills the transferred
				  employee's position with a new employee. The new foreman's position would be
				  considered a job directly related to new jobs because it directly supports the
				  new jobs and the transferred employee's old position was filled by a new
				  employee.
c. The term
				"taxable wages" means those wages upon which an employer is required to
				contribute to the state unemployment fund as defined in Iowa Code section
				96.1A(36) for the year in which the taxpayer elects to take the new jobs tax
				credit. For fiscal year taxpayers, "taxable wages" shall not be greater than
				the maximum wage upon which an employer is required to contribute to the state
				unemployment fund for the calendar year in which the taxpayer's fiscal year
				begins.
d. The term "agreement"
				means an agreement entered into under Iowa Code chapter 260E after July 1,
				1985, an amendment to that agreement, or an amendment to an agreement entered
				into before July 1, 1985, if the amendment sets forth the base employment level
				as of the date of the amendment. The term "agreement" also includes a
				preliminary agreement entered into under Iowa Code chapter 260E provided the
				preliminary agreement contains all the elements of a contract and includes the
				necessary elements and commitments relating to training programs and new
				jobs.
e. The term "base employment
				level" means the number of full-time jobs an industry employs at a plant site
				which is covered by an agreement under Iowa Code chapter 260E on the date of
				the agreement.
f. The term
				"project" means a training arrangement which is the subject of an agreement
				entered into under Iowa Code chapter 260E.
g. The term "industry" means a business
				engaged in interstate or intrastate commerce for the purpose of manufacturing,
				processing, or assembling products, conducting research and development, or
				providing services in interstate commerce, but excludes retail, health, and
				professional services. "Industry" does not include a business which closes or
				substantially reduces its operations in one area of the state and relocates
				substantially the same operation in another area of the state. "Industry" is a
				business engaged in the above-listed activities rather than the generic
				definition encompassing all businesses in the state engaged in the same
				activities. For example, in the meat-packing business, an industry is
				considered to be a single corporate entity or operating division, rather than
				the entire meat-packing business in the state.
h. The term "new employees" means the same as
				new jobs or jobs directly related to new jobs.
i. The term "full-time job" means any of the
				following:
(1) An employment position
				requiring an average work week of 35 or more hours;
(2) An employment position for which
				compensation is paid on a salaried full-time basis without regard to hours
				worked; or
(3) An aggregation of
				any number of part-time or job-sharing employment positions which equal one
				full-time employment position. For purposes of this subrule, each part-time or
				job-sharing employment position shall be categorized with regard to the average
				number of hours worked each week as one-quarter, half, three-quarters, or
				full-time position, as set forth in the following table:
Average Number of Weekly Hours
Category
More than 0 but less than 15
¼
15 or more but less than 25
½
25 or more but less than 35
¾
35 or more
1 (full-time)