Iowa Research Activities Credit

Program Overview

Iowa's research activities credit is refundable, allowing eligible businesses to receive a refund to the extent the credit exceeds their Iowa income tax liability, subject to applicable refundability limits. Eligibility is limited to businesses in specified industries, including manufacturing, life sciences, software engineering, aviation, and aerospace. Legislative changes have also introduced a partial refundability schedule for larger claims. Companies participating in the High Quality Jobs Program may qualify for a supplemental credit at an increased rate.

Eligibility

• Businesses operating in eligible industries may qualify.
• Qualified research activities must be conducted in Iowa.
• Businesses must claim the federal research credit for qualifying research activities.
• Eligible industries include manufacturing, life sciences, software engineering, aviation, and aerospace, subject to applicable requirements.
• Certain service industries, retailers, wholesalers, and agricultural producers are excluded.
• Additional requirements may apply to businesses participating in the High Quality Jobs Program.

Benefits

• Provides a refundable credit based on qualifying research activities.
• Eligible businesses may receive a refund to the extent the credit exceeds their Iowa income tax liability, subject to statutory refundability limits.
• Businesses participating in the High Quality Jobs Program may qualify for a supplemental credit at an increased rate, subject to applicable requirements.