New state report finds tax credits underused
BUSINESS RECORD STAFF Jan 15, 2016 | 8:35 pm
1 min read time
229 wordsAll Latest News, Economic DevelopmentA new Iowa Department of Revenue analysis found that many businesses that created a lot of jobs didn’t use the state’s new jobs tax credit.
“Among 912 businesses with a 260E contract reporting at least 10 percent job creation over base employment in 2013, only 301 could be associated with New Jobs Tax Credit claims,” the state analysts found. “That suggests that two-thirds of eligible businesses either did not know about the New Jobs Tax Credit or decided the administrative cost of making a claim exceeded the benefits.
Other key findings:
- Between tax years 2006 and 2013, there were 10,314 New Jobs Tax Credit claims exceeding $22.7 million reported on Iowa corporation income tax returns and Iowa individual income tax returns, with an average of $2.8 million claimed per tax year.
- While only 5.6 percent of the claims were made on corporation income tax returns, 53.6 percent of the total claim amount was made against Iowa corporation income tax. The remaining claims were filed by members of pass-through entities on individual income tax returns.
- Although initial earned tax credit claims remained around $3 million or lower over the last eight years, dipping to under $2 million in the recession year of 2009, the amount of tax credits carried forward from prior years dropped from $12 million in tax year 2006 to just $6 million in tax year 2013.
Read the full report.
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