Iowa Franchise Tax Credit
The Iowa Franchise Tax Credit (Form IA 147) is a state tax credit available to shareholders of certain Iowa corporations. This credit is designed to reduce the tax burden on shareholders by allowing them to claim a portion of the franchise tax paid by the corporation.
Eligibility and Filing
- Shareholders must be individuals or entities that hold shares in an Iowa corporation.
- The credit is based on the corporation’s franchise tax paid, as reported on Form IA 1040, IA 1120, or IA 1041.
- Income for the credit is entered from line 4 of Form IA 1040, line 13 of Form IA 1120, or line 25 of Form IA 1041.
How to Claim the Credit
To claim the Iowa Franchise Tax Credit using Online Taxes (OLT) software:
- From within your tax return (Online), click on "State" in the left menu (or tap the three dots in the top-right corner for mobile devices).
- Select "Start or Revisit Iowa state."
- Under the "Credits" section, choose "IA 147 - Franchise Tax Credit."
- Click "Save & Continue Return" and follow the on-screen instructions.
Important Notes
- Form IA 147 must be filed with your Iowa state tax return.
- The credit is not available for all types of corporations or shareholders—eligibility depends on Iowa Department of Revenue rules.
- Ensure accurate reporting of income from the appropriate Iowa form to avoid discrepancies.
Source:
Form IA 147 - Iowa Franchise Tax Credit
Iowa State Instruction
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.