September 2018

September 2018

Iowa Department of Revenue Issues Proposed Rules for Section 179

Last week, the Iowa Department of Revenue issued proposed rules for implementing changes to section 179, brought about by Iowa’s 2018 tax reform legislation. The rules are open for public comment through October 17, 2018.  

Taxpayers electing to expense assets under federal IRC § 179 must also expense those assets for Iowa purposes. Likewise, taxpayers who do not take the federal expense deduction are not permitted to take a section 179 deduction in Iowa. Federal law dictates whether an asset qualifies for the Iowa section 179 deduction. Because during certain years the Iowa section 179 limits are different, however, adjustments may be required for the Iowa deduction.

Generally, the Iowa deduction must equal the amount of the federal deduction taken for the same asset in the same year, subject to special Iowa limitations. For 2018 alone, the section 179 limitations for corporations ($25,000 / $200,000) are different from those for individuals and non-corporate entities ($70,000 / $280,000).

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What's up with WOTUS?

Just when many thought the 2015 Clean Water Rule or “WOTUS” was relegated to the archives of history, it has been revived. In fact, as of mid-September 2018, WOTUS is the controlling definition for “waters of the United States” in 22 states. As of September 18, 2018, Iowa was no longer among them. And the status for the remaining states could change at any time. The saga—a case study on the intricacies of administrative law—is far from over. In the meantime, landowners planning activities potentially impacted by WOTUS face uncertainty.

WOTUS defines those waters over which the federal government has Clean Water Act jurisdiction. Section 402 of the CWA authorizes the EPA to issue permits for discharges of “pollutants” through a “point source, such as certain confined animal feeding operations. Section 404 of the CWA authorizes the U.S. Army Corps of Engineers to issue permits for the discharge of dredged or fill material into “navigable waters.”

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Guidance Details New Employer Credit for Paid Family and Medical Leave

The Tax Cuts & Jobs Act created a new business credit for employers that provide paid family and medical leave to their employees. This credit is established by new IRC § 45S. On September 24, 2018, IRS issued Notice 2018-71, which provides general guidance and a set of Q & As detailing the requirements of this new credit.

To be eligible for the credit, the employer must have a written policy that satisfies the following requirements: (1) The policy must cover all qualifying employees, which includes those who have been employed for a year or more and were paid not more than a specified amount (i.e. $72,000 in 2017); (2) the policy must provide at least two weeks of annual paid family and medical leave for each full-time qualifying employee and a proportionate amount of leave for each part-time qualifying employee; and (3) the policy must provide for a payment of at least 50 percent of the qualifying employee’s wages while the employee is on leave.

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CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

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