If you conducted business or earned income in Iowa, you may be subject to Iowa state taxes. If this applies to you, please find below the details regarding key tax deadlines and extension information for 2024.
In Iowa, you may:
File your taxes online for free via GovConnectIowa
When filing by mail, ensure that your documents are postmarked by the due date.
Federal filing is required.
Amendments are not allowed.
Overview, Eligibility, and Limitations
Overview, Eligibility, and Limitations
Research Activities Credit Program
Starting in 2023, Iowa House File 2317 (HF 2317) changes the refundable amount of the research activities credit.
The refundable research activities credit is now equal to 6.5% of Iowa’s apportioned share of qualifying expenditures for increasing research activities that exceed the larger of a base amount or 50% of qualifying research expenditures.
Taxpayers also can elect to calculate their research activities credit using the federal alternative simplified credit method, which is equal to 4.55% of expenditures occurring in Iowa that exceed 50% of the average of the prior three-year qualified research expenses.
Eligible Entities
C-Corporations, S-Corporations, LLCs, Partnerships
Credit Carryforward
Any R&D tax credit in excess of tax liability can be refunded or credited to tax liability for the following year.
The research activities credit cannot be carried forward or backward.
Credit Limitations
The 2018 Iowa Tax Reform Bill includes modifications of the Research Activities Credit for individual and corporate income tax. The two modifications include: (1) a clarification of how the credit is calculated and (2) limitations on who may claim the credit.
Companies must be engaged in one of the following industries:
Manufacturing
Activities commonly understood within the ordinary meaning of the term and includes refining, purifying, combining of different materials, packing of meats, activities subsequent to the extractive process of quarrying or mining, such as crushing, washing, sizing, or blending of aggregate materials.
Life Sciences and Agriscience
The sciences concerned with the study of living organisms, including agriscience, biology, botany, zoology, microbiology, physiology, biochemistry, and related subjects.
Software Engineering
The detailed study of the design, development, operation, and maintenance of software.
Aviation & Aerospace
The design, development or production of aircraft, rockets, missiles, spacecraft and other machinery and equipment that operates in aerospace.
The following industries are not eligible for the Research Activities credit:
Engaged in agricultural production or agricultural cooperatives
Contractors, subcontractors, builders or contractor-retailers engaged in commercial and residential installation / repair including but not limited to:
HVAC installation / repair
Plumbing and pipe fitting
Security system installation
Electrical installation / repair
Accountants
Architects
Collection agencies
Finance or investment companies
Publishing companies
Real estate companies
Retailer
Transportation companies
Wholesalers
Research Activities Credit Program - Updated 2023
Research Activities Credit Program - Updated 2023
Starting in 2023, HF 2317 places new limits on the amount of credit that can be refunded. The refundable portion of the credit exceeding a taxpayer’s liabilities will be reduced incrementally over five years by 10% each year.
The refundable amount will drop to:
90% of excess credit in 2023
80% in 2024
70% in 2025
60% in 2026
50% in 2027 and onwards.
Alternatively, a taxpayer claiming a refund may elect to have the overpayment, otherwise eligible for a refund, credited to the following year’s tax liability.
HF 2317 does not allow taxpayers to carry forward the unused portion of their refundable credits.
Limitations on Qualified Research Expenses
Payments for supplies will also be phased out from inclusion as qualified research expenses incrementally over five years, starting in 2023.
The phaseout schedule is as follows:
Qualified supply expenses will be limited to:
80% of the supply expenses actually incurred in 2023
60% in 2024
40% in 2025
20% in 2026
For tax years beginning on or after January 1, 2027, payments for supplies will no longer be eligible to be included in the qualified research expenses calculation.
HF 2317 further limits qualified research expenses by removing the “substantially all” rules described in IRC Sec. 41(b)(2)(B).
HF 2317 also disallows the inclusion of computer lease or rental costs as described in IRC Sec. 41(b)(2)(A)(iii), which are commonly claimed as part of federal research activities credits.
Limitations to Claim Credit on Amended Return
HF 2317 places limitations on a taxpayer’s ability to claim the credit on an amended return and adds additional provisions for calculating the state’s apportioned share of qualifying expenditures for increased research activities.
Taxpayers who wish to claim a greater research activities credit amount than the amount that was claimed on their timely filed returns (including extensions) must file their amended return within six months from the original return due date (including extensions).
An exception is made if the increase resulted from an assessment under federal or Iowa Department of Revenue examination.
Partnership
You must file in Iowa by March 15, 2025.
Applicable R&D Forms
Form IA-128 – Iowa Research Activities Tax Credit
File the above form with the following tax forms:
Form IA-1065 – Partnership Return of Income
Extension to File Taxes in Iowa for 2024
Taxes owed in Iowa for the tax year 2024 must be paid by March 15, 2025.
No separate extension filing is required in Iowa.
Iowa automatically grants a 6-month extension for Partnership tax returns.
Partnership: the extension deadline is September 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still due by March 15, 2025.
S-Corporation
You must file in Iowa by April 15, 2025.
Applicable R&D Forms
Form IA-128 – Iowa Research Activities Tax Credit
File the above form with the following tax forms:
Form IA-1120 – Iowa Corporation Income Tax Return
Extension to File Taxes in Iowa for 2024
Taxes owed in Iowa for the tax year 2024 must be paid by April 15, 2025.
No separate extension filing is required in Iowa.
Iowa automatically grants a 6-month extension for S-Corporation tax returns.
S-Corporation: the extension deadline is October 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still due by March 15, 2025.
C-Corporation
You must file in Iowa by April 15, 2025.
Applicable R&D Forms
Form IA-128 – Iowa Research Activities Tax Credit
File the above form with the following tax forms:
Form IA-1120 – Iowa Corporation Income Tax Return
Extension to File Taxes in Iowa for 2024
Taxes owed in Iowa for the tax year 2024 must be paid by April 15, 2025.
No separate extension filing is required in Iowa.
Iowa automatically grants an extension for C-Corporation tax returns.
C-Corporation: the extension deadline is October 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still required by April 15, 2025.
Sole-Proprietorship
Sole-Proprietorship
You must file in Iowa by April 30, 2025.
Applicable R&D Forms
Not eligible
File the above form with the following tax forms:
File the Research Activities Credit (RAC) with the individual income tax return
Extension to File Taxes in Iowa for 2024
Taxes owed in Iowa for the tax year 2024 must be paid by April 30, 2025.
No separate extension filing is required in Iowa.
Iowa automatically grants a 6-month extension for individual tax returns.
Sole-Proprietorship: the extension deadline is September 30, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still due by April 30, 2025.
References
We strive to ensure the accuracy of the information on this page, but it is not intended as tax or legal advice. Please use your own professional judgment and consult with a tax professional. Any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.