Iowa Administrative Code › Agency 701 - Revenue Department › Title VI - Corporation Income Tax › Chapter 501 - Filing Returns, Payment of Tax, Penalty and Interest, and Tax Credits › Rule 701-501.8 - New Jobs Credit

Current through Register Vol. 47, No. 3, July 24, 2024
A tax credit is available to a corporation which 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 the
				state.
b. The term
"jobs
				directly related to new jobs"
means those jobs which directly support
				the new jobs but does 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.
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 supervisor of the new product line but does not fill the
				  transferred employee's position. The new supervisor'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 supervisor of the new product line and fills the transferred
				  employee's position with a new employee. The new supervisor'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.
The burden of proof that a job is directly related to new
				  jobs is on the taxpayer.
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 commitment 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
				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 or 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)