How to Work With the Iowa Economic Development Authority
If your company is planning to locate or expand in Iowa, the Iowa Economic Development Authority is likely to be one of your most important state partners. The authority, known as IEDA, administers the state’s main business incentives, and in 2025 the Legislature overhauled many of them. Here is what to know before you start.
What changed in 2025
Senate File 657, signed by Governor Kim Reynolds on June 6, 2025, rewrote several of Iowa’s business incentive programs, with most changes taking effect January 1, 2026. Among the changes:
Business Incentives for Growth replaced the High Quality Jobs Program
A new R&D Tax Credit Program replaced the Research Activities Credit
A Seed Investor Tax Credit replaced the Angel Investor Tax Credit
Business Incentives for Growth
Business Incentives for Growth, or BIG, helps qualifying businesses offset some of the costs of locating, expanding or modernizing a facility in Iowa. It is open to businesses in advanced manufacturing, bioscience, insurance and finance, and technology. Retailers, service providers, warehouse and distribution centers and data centers are not eligible. Depending on the project, benefits can include:
A performance-based investment tax credit, earned when qualifying assets are placed in service and spread over five years, with any amount above the company’s Iowa income tax refunded
A refund of sales tax paid on construction materials
Reimbursement of eligible job training expenses, which IEDA says will be available beginning in spring 2027
New jobs must pay at least 100 percent of the local laborshed wage and retained jobs at least 120 percent, and businesses must offer a competitive benefits package to full-time employees. The program is capped at $50 million a year.
The R&D tax credit
The new R&D Tax Credit Program is aimed at businesses primarily engaged in targeted industries. Businesses must pre-apply with IEDA, and IEDA can approve a credit of up to 3.5 percent of qualifying research expenses. Because the program is capped at $40 million a year, awards can be prorated.
How the application process works
Pre-application. A business submits a confidential pre-application so IEDA can review eligibility and estimate potential incentives.
Full application. If invited, the business completes a full application. IEDA says applications are due by the 15th of the month to be considered at the following month’s board meeting.
Board review. The IEDA Board meets monthly, on the third Friday, to review applications.
Timing matters
For BIG, IEDA says businesses must apply and receive approval before starting their project. Bring economic development into your planning at the beginning, not after site selection or construction plans are final, so timing does not cost you an opportunity.
Do not overlook local partners
State incentives are only part of the picture. Cities and counties can offer local incentives such as tax increment financing and property tax abatement, and local economic development groups and utilities often help companies evaluate sites. A coordinated approach with state and local partners usually produces the strongest proposal.
How High Yield Strategies can help
While serving in the Governor’s office, HYS founder Jake Swanson worked directly with the leadership of the Iowa Economic Development Authority/Iowa Finance Authority. HYS helps companies plan their entry or expansion in Iowa, identify programs that fit, prepare for meetings with state and local officials and find Iowa grant opportunities. Learn more about doing business in Iowa and our biotechnology and AgTech work, read what companies should know before lobbying in Iowa, or email info@hystrategies.com.
This article is general information, not legal or tax advice. Program details can change; confirm current terms with IEDA. Sources: Iowa Economic Development Authority, Business Incentives for Growth; BrownWinick, “Iowa Overhauls Business Tax Incentives”; 2025 Iowa Acts, Senate File 657.
