Iowa law provides for a number of credits and exemptions. It is the property owner's responsibility to apply for these as provided by law. It is also the property owner's responsibility to report to the Assessor when they are no longer eligible for any credit or exemption they have applied for. Following is a list of several credits and exemptions available in Iowa.
Homestead Tax Credit
Iowa residents who own and occupy their dwelling and the land it is located on may file for homestead credit. To qualify for the credit, the property owner must be a resident of Iowa and actually live on the property on July 1st and for at least six months of every year. Applications must be filed by July 1st of the year the credit is claimed. Once approved, the credit remains in effect until the person moves or sells the property.
Disabled Veteran's Homestead CreditIowa residents who meet one of the following service requirements are eligible for the credit:
- A verteran as defined in Iowa Code Section 35.1 and has a permanent service connected disability rating of 100% or a permanent and total disability rating based on individual unempolyability paid at the 100% disability rate.
- A former member of the National Guard of any state who otherwise meets the service requirements of Iowa Code Section 35.1 subsection 2, paragraph "b", subsectin (2) or (7), with a service-connected disability rating of 100%
- A surviving spouse or child who is receiving dependency and indemnity compensation (DIC) pursuant to 38 U.S.C. 1301 et seg.
Military Service Tax Exemption
Iowa residents who meet one of the following service requirements are eligible for the exemption:
- Honorably discharged veteran, who served for a minimum of eighteen months, or for fewer than eighteen months because of a service-related injury.
- Former member, or member who is currently serving, of Reserve Forces or Iowa National Guard who has served at least 20 years.
- Member of Reserve Forces or Iowa National Guard who was activated for federal duty, not including training, for a minimum of 90 days.
- Former member, of the Armed Forces, whose enlistment would have occurred during the Korean Conflict but chose to serve 5 years in the Reserve Forces.
- Honorably discharged veteran who served in an eligible service period (Iowa Code Chapter 35)
Application must be made with the Assessor on or before July 1 of the year the exemption is first claimed. The military certificate of satisfactory service, order transferring to inactive status, reserve, retirement, order of separation from service or honorable discharge must be recorded in the office of the county recorder. Members of the Reserve Forces or Iowa National Guard who have served at least 20 years and continue to serve shall record the veteran's retirement points accounting statement issued by the armed forces of the United States, the state adjutant general, or the adjutant general of any other state. The exemption from taxation is $2,778 for WWI veterans and $1,852 for all other service periods. If the qualified veteran does not claim the exemption the spouse, unmarried widow(er), minor child or widowed parent may be eligible to claim the exemption. (Refer to Iowa Code Chapter 426A)
Family Farm Credit
This is a tax credit on agricultural tracts of land 10 acres or more that are farmed by the owner or designated family members (this includes spouse, parent, grandparent, great grandparent, child, grandchild, great grandchild, stepchild, brother, sister uncle, aunt, niece, nephew.) Applications are filed in the Assessor's Office.
If a claim for the family farm credit is filed by November 1, and approved, further filing is not required provided the claimant owns the property on July 1 of subsequent years and the designated person actively engaged in farming the property remains the same. A claim filed after November 1 shall be considered as a claim filed for the following year.
If the ownership changes, the new owner must re-file for the credit and if the "designated person" changes, the owner must re-file for the credit.
The owner must notify the Assessor in writing of a change in the "designated person". Failure to do so will result in a penalty.
Contact the Assessor's office for more information on the complexities of this law. (Refer to Iowa Code Chapter 425A)
Business Property Tax Credit
A person may claim and receive one credit for each eligible parcel unless the parcel is part of a property unit for which a credit is claimed.
A person may claim and receive one credit for each property unit. A credit approved for a property unit shall be proportionally allocated to the several parcels within the property unit proportionately based on each parcle's total amount of property taxes due and payable bears as part of the total amount of property taxes due and payable on the property unit.
What qualifies as a parcel: parcels classified and taxed as commerical property, industrial property, or railway property under chapter 434 is eligible for a credit under this chapter.
What qualifies as a property unit: property units are comprised of property assessed as commercial property, industrial property, or railway property under chapter 434, in the same county, with the same classification, owned by the same person, are contiguous as defined in 426C.1, are separate items on a tax list, and are operated by that person for a common use and purpose.