SPOTLIGHT PROGRAMS

High Quality Jobs Program: Companies that create or retain jobs and make capital investments may qualify for a variety of incentives. These include property tax exemptions of up to 100% of the incremental value added for up to 20 years and an increase in the state’s research activities credit while participating in the program.  Direct financial assistance, in the form of loans/forgivable loans, is also available from the High-Quality Jobs program.

New Jobs Tax Credit: This program provides a one-time corporate income tax credit to businesses that increase the size of their workforce by at least 10% and participate in the New Jobs Training (260E) Program. The maximum credit per new job is resized annually and is $2,155 for 2023.  Tax credits are non-refundable and non-transferable; however unused tax credits may be carried forward for up to 10 years.

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TAX CREDITS

Targeted Jobs Withholding Tax Credit:  The Targeted Jobs Withholding Tax Credit is an incentive that allows up to 3% of the project withholdings to be diverted to the project budget on a quarterly basis. The incentive must be matched by a designated pilot city and may have a term of up to 10 years.

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Research Activities Credit (R&D or RAC): All businesses within the state that meet the qualifications of the federal research credit may claim the Iowa Research Activities Credit, which is equal to 6.5% of qualified research expenditures in Iowa above a base amount.  Supplemental research credits are available to companies that participate in the High-Quality Jobs Program. Any research credit in excess of the tax liability may be refunded to the taxpayer or credited for the following year.

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DIRECT FINANCIAL ASSISTANCE

Economic Development Set-Aside (EDSA): Businesses that create or retain jobs in certain counties or cities may qualify for a direct or forgivable loan of up to $1 million.  To be eligible for funding under this discretionary program, a company must demonstrate proof of a funding gap, locational disadvantage, or insufficient return on investment.  In addition, jobs created or retained must pay at least 80% of the area’s “laborshed” average wage, and at least 51% of these positions must be filled by low and moderate-income individuals as defined by the U.S. Department of Housing and Urban Development.

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JOB TRAINING

Iowa Industrial New Jobs Training (260E): Administered by Iowa's 15 community colleges, this discretionary training program is financed through bonds sold by the colleges. Depending on the wages of the trainees, a business will divert 1.5% or 3.0% of its Iowa state withholding taxes generated by the new positions to the community college to retire the bonds.  This structure enables the training to be of low to no cost since the bonds are retired with dollars that otherwise would have been paid to the state as withholding taxes.  

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Last Updated: May 2023