16.211 - DISASTER RECOVERY HOUSING PROJECT TAX CREDIT.
16.211 DISASTER RECOVERY HOUSING PROJECT TAX
CREDIT.
1. a. A tax credit shall be allowed against the taxes imposed
in chapter 422, divisions II and III, for a portion of a taxpayer's
qualifying investment, as provided in subsection 3, in a qualifying
disaster recovery housing project. To qualify as a disaster recovery
housing project, a property, and the activities affecting the
property, shall meet all of the following conditions:
(1) The property is owned by a taxpayer who is an individual,
business, or corporation subject to taxation under chapter 422,
division II or III.
(2) A qualifying investment, as defined in subsection 3, is made
by the taxpayer.
(3) The project involves the construction or rehabilitation of
housing on the property.
(4) The property is located in an area that the governor
proclaimed a disaster emergency or the president of the United States
declared a major disaster during the period of time beginning May 1,
2008, and ending August 31, 2008.
(5) An application for low-income housing tax credits pursuant to
section 42 of the Internal Revenue Code has been submitted to the
Iowa finance authority on behalf of the project and has been
determined by the authority to meet the threshold requirements for an
award of credits as set forth in the applicable qualified allocation
plan.
(6) The project meets the requirements relating to the density of
residential housing in the area as established by the authority.
(7) The project meets the requirements relating to the
availability of and the accessibility to educational services as
established by the authority. For the purposes of this section,
"educational services" includes but is not limited to public
schools, job training, and financial literacy services.
(8) The project is designed to avoid, prevent, or mitigate the
effects of a future natural disaster.
b. An individual may claim a tax credit under this subsection
of a partnership, limited liability company, S corporation, estate,
or trust electing to have income taxed directly to the individual.
The amount claimed by the individual shall be based upon the pro rata
share of the individual's earnings from the partnership, limited
liability company, S corporation, estate, or trust.
2. a. To claim a disaster recovery housing project tax credit
under this section, a taxpayer must attach one or more tax credit
certificates to the taxpayer's tax return. The tax credit
certificate or certificates attached to the taxpayer's tax return
shall be issued in the taxpayer's name, expire on or after the last
day of the taxable year for which the taxpayer is claiming the tax
credit, and show a tax credit amount equal to or greater than the tax
credit claimed on the taxpayer's tax return.
b. After verifying the eligibility of a taxpayer for a tax
credit pursuant to this section, the authority shall issue a disaster
recovery housing project tax credit certificate to be attached to the
taxpayer's tax return. The tax credit certificate shall contain the
taxpayer's name, address, tax identification number; the amount of
the credit; and any other information required by the department of
revenue.
c. The tax credit certificate, unless otherwise void, shall
be accepted by the department of revenue as payment for taxes imposed
pursuant to chapter 422, division II or III, subject to any
conditions or restrictions placed by the authority upon the face of
the tax credit certificate and subject to the limitations of this
section.
d. Tax credit certificates issued under this section are not
transferable to any person or entity.
3. a. The tax credit equals seventy-five percent of the
taxpayer's qualifying investment in a disaster recovery housing
project. For the purposes of this section, "qualifying
investment" means the costs incurred by the taxpayer that are
directly related to a disaster recovery housing project, as defined
in subsection 1, and which are incurred on or after May 12, 2009, and
prior to July 1, 2010.
b. The amount of the tax credit calculated under paragraph
"a" shall be divided by five and applied equally to the
taxpayer's tax liability for five consecutive tax years commencing
with the tax year beginning in the 2011 calendar year. Any tax
credit in excess of the taxpayer's liability for the tax year is not
refundable.
4. For purposes of individual and corporate income taxes, the
increase in the basis of the property that would otherwise result
from the disaster recovery housing investment shall be reduced by the
amount of the tax credit allowed under this section.
5. The maximum amount of tax credits issued by the authority
under this section shall not exceed three million dollars in each of
the five tax years. The authority shall issue the tax credit
certificates on a first-come, first-served basis. Section History: Recent Form
2009 Acts, ch 100, §31, 35
Referred to in § 16.212, 422.11X, 422.33 Footnotes
Section takes effect May 12, 2009, and applies to disaster
recovery housing project costs incurred on or after May 12, 2009, and
before July 1, 2010; 2009 Acts, ch 100, §35