Search form

Other Refundable Credits

Back to Expanded Instructions Index 

Going back will take you to instructions for the current tax year.

Line: 
61
Step: 
Step 10
Step Subject: 
Credits
Year: 
2014

Enter the total of other credits from Part II of the IA 148 Tax Credits Schedule.

Adoption
Biodiesel Blended Fuel
Claim of Right
E15 Plus Gasoline Promotion

E85 Gasoline Promotion
Ethanol Promotion
Historic Preservation and Cultural and Entertainment District
Research Activities
Supplemental Research Activities

Adoption Tax Credit

For tax years beginning on or after January 1, 2014, an Adoption Tax Credit is available for individual income tax equal to the first $2,500 of unreimbursed expenses related to an adoption per each child adopted in Iowa. There is no limit on the amount of income earned by an individual to be eligible for the credit. The credit is refundable.

The credit is claimed in the year the child was permanently placed in Iowa.  Only expenses incurred in the year the child was permanently placed in Iowa are eligible for the credit.

A part-year resident of Iowa may claim the credit if he/she was a resident of Iowa at the time the child was permanently placed.

Any adoption expenses applied to the Adoption Tax Credit are excluded from the calculation of the Iowa itemized deduction for adoption expenses taken on line 27 of the IA 1040 Schedule A. The itemized deduction equals the expenses in excess of three percent of adjusted gross income. For example, if a taxpayer has $100,000 of adjusted gross income and $6,000 of adoption expenses, the taxpayer can claim a $2,500 adoption tax credit and $500 of itemized deductions for adoption expenses. Only $3,000 of expenses are available for a deduction, and $2,500 are used to claim the tax credit.

Section 422.12A.

Biodiesel Blended Fuel Tax Credit

A Biodiesel Blended Fuel Tax Credit is available to retail dealers of biodiesel fuel who operate motor fuel pumps at a retail motor fuel site. Tank wagons are considered retail motor fuel sites.

The tax credit equals 4.5 cents multiplied by the total number of gallons of biodiesel blended fuel with a blend of 5% or higher. The IA 8864 form is used to compute the credit and must be included with the Iowa income tax return.

Any credit in excess of the tax liability may be refunded or credited to the tax liability for the following year. If the Biodiesel Blended Fuel Tax Credit is earned by partnerships, limited liability companies, S corporations, estates, or trusts where income is taxed directly to the individual, the credit can be claimed by the owners based on the pro rata share of the owner's earnings in the entity.

Sections 422.11P and 422.33(11C)

Claim of Right Tax Credit

A Claim of Right Tax Credit may be claimed by a taxpayer who repaid income during in the 2014 tax year that was reported and taxed on a prior Iowa income tax return. To calculate the credit, recompute tax liability in the prior tax year excluding the repaid income. The tax credit claim equals that calculated tax reduction. However, it may be more advantageous to report the amount of income as an income adjustment on line 24. You may claim either the  Claim of Right Tax Credit or take a deduction of the amount repaid on line 24, but not both.

Example of Claim of Right Credit: A taxpayer received a $5,000 bonus in 2011 and reported it on the 2011 Iowa return. In 2014 the taxpayer's employer advised that the bonus was awarded in error and was to be repaid. The bonus was repaid by the end of 2014. After recomputing the 2011 Iowa return, there is a $440 reduction in tax. The taxpayer may claim a credit of $440 on line 61 of the 2014 Iowa return or take a deduction of $5,000 on line 24..

Section 422.5(10)

E15 Plus Gasoline Promotion Tax Credit

A retail dealer of gasoline who sells E-15 plus gasoline can claim an E15 Plus Gasoline Promotion Tax Credit. E15 plus gasoline is ethanol blended gasoline with an ethanol content between 15% and 69% by volume.

The amount of tax credit is three cents multiplied by the total number of gallons of E15 plus gasoline sold. Effective in tax year 2014, the tax rate for gallons of E15 plus gasoline sold between June 1 and September 15 is ten cents, and three cents for all other days. The IA 138 form is used to compute the credit and must be included with the Iowa income tax return. A taxpayer may claim the E15 Plus Gasoline Promotion Tax Credit even if the taxpayer claims the Ethanol Promotion Tax Credit for the same ethanol gallons.

Any credit in excess of the tax liability may be refunded or credited to the tax liability for the following year. If the E15 Plus Gasoline Promotion Tax Credit is earned by partnerships, limited liability companies, S corporations, estates, or trusts where income is taxed directly to the individual, the credit can be claimed by the owner based on the pro rata share of the owner's earnings in the entity.

Sections 422.11Y and 422.33(110)

E85 Gasoline Promotion Tax Credit

An income tax credit is available to retail dealers of gasoline who sell E85 gasoline through motor fuel pumps during the tax year. E85 gasoline is ethanol blended gasoline with an ethanol content between 70% and 85% by volume.

The amount of tax credit is sixteen cents multiplied by the total number of gallons of E85 gasoline sold. The IA 135 form is used to compute the credit and must be included with the Iowa income tax return. A taxpayer may claim the E85 Gasoline Promotion Tax Credit even if the taxpayer claims the Ethanol Promotion Tax Credit for the same ethanol gallons.

Any credit in excess of the tax liability may be refunded or credited to the tax liability for the following year. If the E85 gasoline promotion tax credit is earned by partnerships, limited liability companies, S corporations, estates, or trusts where income is taxed directly to the owner, the credit can be claimed by the individual based on the pro rata share of the owner's earnings in the entity.

Sections 422.11O and 422.33(11B)

Ethanol Promotion Tax Credit

A retail dealer of gasoline who sells ethanol gasoline may be able to claim an Ethanol Promotion Tax Credit.

Eligibility for the tax credit and the amount of the tax credit depends on whether the retail dealer attains a biofuel threshold percentage, and how many gallons of motor fuel are sold in a year. The biofuel threshold percentages for retail dealers who sell more than 200,000 gallons in a year, and for dealers who sell 200,000 gallons or less in a year, are shown below. The credit is repealed on January 1, 2021.

Biofuel Threshold Standards

Calendar Year

Percentage more than 200,000

Percentage 200,000 or less

2014

15%

13%

2015

17%

14%

2016

19%

15%

2017

21%

17%

2018

23%

19%

2019

25%

21%

2020

25%

25%

Effective for tax year 2011, retailers must declare whether they will calculate the tax credit companywide or separately for each retail motor fuel site. For any year in which the retail dealer has met the threshold, the tax credit is 8 cents for each gallon of pure ethanol sold. If the retail dealer misses the threshold by 2 percentage points or less, the tax credit equals 6 cents for each gallon of pure ethanol sold. If the retail dealer misses the threshold by more than 2 percentage points but not more than 4 percentage points, the tax credit equals 4 cents for each gallon of pure ethanol sold. If the retail dealer misses the threshold by 4 percentage points or more, then no tax credit is allowed.

The retail dealer determines its biofuel distribution percentage by summing the pure ethanol gallons and the pure biodiesel gallons sold during the calendar year, and dividing this sum by the total gasoline gallons sold during the calendar year. While the biodiesel gallons are included in the computation of the biofuel distribution percentage to determine if the retailer met the biofuel threshold percentage, only the pure ethanol gallons sold are used in determining the amount of the Ethanol Promotion Tax Credit.

Example: A retail dealer only operates one motor fuel site. The number of gallons of gasoline sold at this site in 2014 equals 100,000 gallons. This consisted of 5,000 gallons of E85, 80,000 gallons of E10, and 15,000 gallons not containing ethanol. The dealer also sold 15,000 gallons of diesel fuel at this site during 2014, of which 5,000 gallons was B5 (5% biodiesel). The pure ethanol gallons is 12,250 (5,000 x 85% = 4,250. 80,000 x 10% = 8,000. 4,250 + 8,000 = 12,250). The pure biodiesel gallons sold is 250, or 5,000 x 5%. The total of 12,250 and 250, or 12,500, is divided by the total gasoline gallons sold of 100,000 to arrive at a biofuel percentage of 12.5%. Since this falls short of the 13% threshold for a dealer selling less than 200,000 gallons but by less than 2 percentage points, the credit is 6 cents x 12,250, or $735.

The IA 137 form is used to compute the credit and must be included with the Iowa income tax return. A retail dealer of gasoline will be able to claim the Ethanol Promotion Tax Credit even if the dealer claims an E85 Gasoline Promotion Tax Credit or the E15 Plus Gasoline Promotion Tax Credit for the same tax year for the same ethanol gallons sold. For retail dealers of gasoline whose tax year is not on a calendar year basis, the retail dealer may compute the tax credit on the gallons of pure ethanol sold during the year using the applicable credit amounts as shown above. Any credit in excess of the tax liability is refundable or credited to the tax liability for the following year.

Sections 422.11N and 422.33(11A)

Historic Preservation and Cultural and Entertainment District Tax Credit

A Historic Preservation and Cultural and Entertainment District Tax Credit is available for 25% of the qualified rehabilitation expenditures of eligible property in Iowa. This credit is administered by the State Historic Preservation Office of the Iowa Department of Cultural Affairs. When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 tax Credits Schedule when the tax credit is claimed.

Effective for the fiscal year beginning July 1, 2014, the Department of Cultural Affairs can sign agreements for rehabilitation projects eligible for up to $45 million in Historic Preservation and Cultural and Entertainment District Tax Credits each fiscal year. Up to five percent of those credits must be reserved for small projects defined as projects with qualified rehabilitation expenditures up to $750,000. 

Any credit in excess of the tax liability may be fully refunded or credited to the tax liability for the following year. The credit is also transferable and can be transferred to any person or entity.

The historic preservation and cultural and entertainment district tax credit can be transferred to any person or entity.

For credits reserved on or after July 1, 2014, the project must be completed within 36 months of the date on which the project agreement was signed.

Sections 422.11D, 422.33(10), 422.60(4) and 404A.2

Research Activities Tax Credit

Starting in 1985, a credit became available for 6.5% of Iowa's apportioned share of qualifying expenditures for increasing research activities. The Iowa Research Activities Tax Credit is based on the federal research and experimentation tax credit. The Iowa credit is based on the ratio of Iowa research expenditures over total research expenditures. The tax credit is claimed on the IA128.

Effective in tax year 2010, the tax credit can be calculated using the "Alternative Simplified Research Activities Tax Credit". This credit is claimed on form IA 128S. A taxpayer may choose each year how to compute the Research Activities Tax Credit for Iowa tax purposes. Any credit in excess of the tax liability may be refunded or credited to the tax liability for the following year.

Sections 422.10 and 422.33(5) and 15.335

Supplemental Research Activities Tax Credit

Taxpayers who are approved by the Iowa Economic Development Authority under the Enterprise Zone prior to July 1, 2010, can as much as double their Research Activities Tax Credit claimed on either form IA 128 or IA 128S. The research credit can also be doubled under the High Quality Jobs Program for taxpayers approved by the Iowa Economic Development Authority if certain criteria is met. For approvals on or after July 1, 2010, the amount of the Supplemental Research Activities Tax Credit depends upon the gross revenues of the eligible business. For businesses with gross receipts of $20 million or less, the supplemental credit cannot exceed 10% of the Research Activities Tax Credit. For businesses with gross receipts exceeding $20 million, the supplemental credit cannot exceed 3% of the Research Activities Tax Credit.

When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed. Any credit in excess of the tax liability may be refunded or credited to the tax liability for the following year.

Sections 422.10 and 422.33(5) and 15.335