Qualification for the Iowa research credit is based on the federal research credit. The Iowa credit was enacted in 1983 and was designed to be 6.5% of Iowa’s apportioned share of qualifying expenditures for increasing research activities. Some quick facts about the credit:

  • The Iowa credit is based of the federal credit calculation, adjusted by the ratio of Iowa research expenditures over total research expenditures.
  • The credit may be increased up to 13% of expenditures for businesses under the Enterprise Zone Program and High Quality Jobs Program.
  • Iowa is only one of a few states that offers a refundable credit.
  • Amended returns can be filed for the credit within a three-year statute of limitations.

What is considered qualified research?

The definition of qualified research mirrors federal qualifications. Specifically, if you attempt to develop or improve any of the following, you may be eligible for the R&D credit:

  • Products
  • Processes (e.g. – manufacturing processes)
  • Computer Sciences
  • Software
  • Formulae
  • Techniques
  • Inventions

Firms in the following industries / sub-industries conducting R&D in Iowa can be eligible for the credit:

  • Manufacturing
  • Aerospace Technology
  • Agriculture
  • Chemicals

Why TRCG Advisors?

TRCG actively works with businesses across the state to provide local service and support. TRCG has expertise in sustaining the R&D Credit through an audit process as well as claiming new credits. Our consultants can help you in determining which activities qualify and ensuring accuracy and due diligence.