This bill modifies the research activities tax credit available against individual and corporate income taxes in Iowa. It introduces a new provision that reduces the tax credit for individuals and corporations that have claimed it and have experienced mass layoffs or business closings during the taxable year. Specifically, the reduction percentages are as follows: for layoffs of 1,500 or more, the credit is reduced by 50%; for layoffs between 1,000 and 1,500, by 25%; for layoffs between 500 and 1,000, by 12.5%; and for layoffs of less than 500, by 6.25%.

Additionally, the bill mandates that the Iowa Department of Revenue review relevant notices of mass layoffs and business closings before allowing the credit. If a credit has already been claimed and is subject to the new provisions, it will be recaptured by the department. The bill is effective immediately upon enactment and applies retroactively to tax years beginning on or after January 1, 2024.

Statutes affected:
Introduced: 422.10, 15.330, 422.33