Iowa Tax Incentives for Business

Iowa Tax Incentives for Business

By Amy Kuhlers, Iowa Economic Development Authority

The state of Iowa offers tax incentives and other programs businesses can use to assist with employee training.  These programs, administered by the Iowa Economic Development Authority (IEDA), are geared to help companies get the skilled workforce they need to expand and help provide job opportunities for Iowans.  Here’s a breakdown of some of the incentives and how they might be utilized by Iowa businesses.

Iowa Industrial New Jobs Training Program (260E)

Businesses moving to, or expanding in Iowa can receive financial assistance for the customized training of new employees through the Iowa Industrial New Jobs Training program (260E).  This unique economic incentive allows for businesses to partner with one of Iowa’s 15 community colleges to develop a training program specific for their industry.  There is no cost to a business to participate in the program.  Training is funded by the partnering community college through the sale of bonds for the amount of anticipated tax revenue from new employee salaries.  The bonds are then repaid by diverting a portion of state tax withholdings from the newly created jobs back to the college.  Visit the IEDA 260E webpage for more information and eligibility requirements.

New Jobs Tax Credit

An additional benefit to participants in the 260E program is the New Jobs Tax Credit.  A business that has entered into a 260E agreement with a community college and plans to increase their employment by at least 10% may be eligible for this credit to its Iowa corporate income tax. The credit maximum for 2018 is $1,794 per new job.  More details can be found on the IEDA New Jobs Tax Credit webpage.

Iowa Jobs Training Program (260F)

Businesses seeking training for their current employees may benefit from the Iowa Jobs Training Program (260F).  The 260F program provides forgivable loans to Iowa businesses for training costs, up to $50,000 per site or $100,000 over a three-year period. A participating business is required to provide at least twenty-five percent of the training costs as a cash match for awards over $5,000.  A variety of training areas are eligible, including health and safety, quality assurance and computer skills.  Businesses interested in participating should contact their local community college for more information.

Accelerated Career Education (ACE)

Businesses seeking a skilled workforce can partner with Iowa community colleges in the ACE program.  ACE assists Iowa’s community colleges to either establish or expand training programs in the occupations most needed by Iowa businesses.  Participating businesses enter into an agreement with the college to sponsor some or all of the positions in the training program.  Through sponsorship, the business agrees to consider the participating student for employment upon completion of the training, as well as provide a 20% match of program costs, which are offset by tax benefits.  Visit IEDA’s ACE website for more details and to find out if your business may be eligible to participate.

In addition to the above, IEDA has other programs available to assist with business workforce needs, including the Iowa Apprenticeship Program, Iowa Student Internship Program, the STEM Internship Program and the High Quality Jobs Program.  More information on these programs can be found on IEDA’s Business Programs webpage.

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