Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 52 - Filing Returns, Payment of Tax, Penalty and Interest, and Tax Credits › Rule 701-52.25 - Wage-benefits Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Effective for tax years ending on or after June 9,2006, a
				  wage-benefits tax credit equal to a percentage of the annual wages and benefits
				  paid for a qualified new job created by the location or expansion of the
				  business in Iowa is available for qualified businesses.
(1)
Definitions.
The
				following definitions are applicable to this rule:
"Average county wage"
means the annualized
				  average hourly wage calculated by the Iowa department of economic development
				  using the most current four quarters of wage and employment information as
				  provided in the Quarterly Covered Wage and Employment Data report provided by
				  the department of workforce development. Agricultural/mining and governmental
				  employment categories are deleted in compiling the wage information.
"Benefits"
means all of the
				  following:
1. Medical and dental insurance plans.
2. Pension and profit-sharing plans.
3. Child care services.
4. Life insurance coverage.
5. Vision insurance plan.
6. Disability coverage.
"Department"
means the Iowa department of
				  revenue.
"Full-time"
means the equivalent of
				  employment of one person:
1. For 8 hours per day for a 5-day, 40-hour workweek for 52
				  weeks per year, including paid holidays, vacations, and other paid leave,
				  or
2. The number of hours or days per week, including paid
				  holidays, vacations, and other paid leave, currently established by schedule,
				  custom or otherwise, as constituting a week of full-time work for the kind of
				  service an individual performs for an employing unit.
"Grow Iowa values fund"
means the grow Iowa
				  values fund created in Iowa Code Supplement section 15G.108.
"'Nonqualified new job"
means any one of the
				  following:
1. A job previously filled by the same employee in
				  Iowa.
2. A job that was relocated from another location in
				  Iowa.
3. A job that is created as a result of a consolidation,
				  merger, or restructuring of a business entity if the job does not represent a
				  new job in Iowa.
"Qualified new job "
or
"job creation
				  "
means a job that meets all of the following criteria:
1. Is a new full-time job that has not existed in the
				  business within the previous 12 months in Iowa.
2. Is filled by a new employee for at least 12 months.
3. Is filled by a resident of the state of Iowa.
4. Is not created as a result of a change in
				  ownership.
5. Was created on or after June 9, 2005.
"Retail business "
means a business which
				  sells its product directly to a consumer
"Retained qualified new j oh"
or
"job
				  retention"
means the continued employment, after the first 12 months
				  of employment, of the same employee in a qualified new job for another 12
				  months.
"Service business "
means a business which
				  is not engaged in the sale of tangible personal property, and which provides
				  services to a local consumer market and does not have a significant proportion
				  of its sales corning from outside the state.
(2)
Calculation of credit.
A business which is not a retail or service business may claim the
				wage-benefits tax credit which is determined as follows:
a. If the annual wages and benefits for the
				qualified new job equal less than 130 percent of the average county wage, the
				credit is 0 percent of the annual wage and benefits paid.
b. If the annual wages and benefits for the
				qualified new job equal at least 130 percent but less than 160 percent of the
				average county wage, the credit is 5 percent of the annual wage and benefits
				paid for each qualified new job.
c.
				If the annual wages and benefits for the qualified new job equal at least 160
				percent of the average county wage, the credit is 10 percent of the annual wage
				and benefits paid for each qualified new job.
If the business is a partnership, S corporation, limited
				  liability company, or estate or trust electing to have the income taxed
				  directly to the individual, an individual may claim the tax credit. The amount
				  claimed by the individual shall be based upon the pro-rata share of the
				  individual's earnings of the partnership, S corporation, limited liability
				  company, or estate or trust.
Any credit in excess of the taxpayer's tax liability is
				  refundable. In lieu of claiming the refund, the taxpayer may elect to have the
				  overpayment credited to the tax liability for the following tax year.