Credits & Exemptions

Homestead Tax Credit

Iowa Code Chapter 425

Eligibility:

• Any person who owns a home and occupies it.
• Must own and occupy the property as a homestead on July 1 of each year.
• Declare residency in Iowa for income tax purposes.
• Occupy the property for at least six months each year. (Exception: Persons in the military or a nursing home who do not occupy the home are eligible.)

Filing Responsibility:

• It is the responsibility of each owner/claimant to file a homestead tax credit with the city or county assessor on or before July 1 of the year the owner/claimant is first claiming the credit.
• Example: To sign up for the tax credit to take effect for the 2023 assessment year, homesteads need to be filed on or before July 1, 2023. After that date, the homestead credit will take effect for the 2024 assessment year.
• Please note: Homeowners who apply for the 2023 assessment year will first see the credit on their property tax statements in August of 2024.

How to File:

• City of Ames residents located within the city limits:  You can now complete the form(s) online at www.AmesAssessor.org and then mail or drop off the form; or stop into the office in person. The office is located on the second floor of City Hall (515 Clark Avenue). It is open Monday thru Friday from 8 a.m. to 5 p.m.

Selling Your Home:

• Written notification must be given to the assessor of the discontinued use of your home as your homestead.

For more information on the homestead tax credit check out the Iowa Code (Chapter 425) at the Iowa Legislature Web site.

Disabled Veteran's Homestead Tax Credit

Iowa Code Chapter 425

Benefit:

• A disabled veteran can claim a homestead credit equal to the entire amount of taxes levied on the homestead property.      

Eligibility:

A veteran must first meet eligibility guidelines.

1. A veteran of any of the military forces of the United States, who acquired the homestead under 38 U.S.C. §21.801, 21.802, prior to August 6, 1991, or under 38 U.S.C. §2101, 2102.
   • A surviving spouse qualifies as long as they:
   • Are a beneficiary of the estate. 
     • Must provide documentation  
     • Name doesn't have to be on title
     • Continue to live in the homestead.
       • If they move before July 1, they no longer qualify for the credit. Remains unmarried. A surviving child qualifies as long as they: Is a beneficiary of the estate Must provide documentation. Name does not have to be on title. Continues to live in the homestead. If they move before July 1, they no longer qualify for the credit.
       • A veteran as defined in section 35.1 with a permanent service-connected disability rating of 100%, as certified by the United States Department of Veterans Affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the 100% disability rate, as certified by the United States Department of Veterans Affairs. 
         • A surviving spouse qualifies as long as they:
         • • Are a beneficiary of the estate.
           • • Must provide documentation.
             • Name does not have to be on title.
           • Continue to live in the homestead.
           • • If they move before July 1, they no longer qualify for the credit.
           • Remain unmarried.
       • A former member of the national guard of any state who otherwise meets the service requirements of section 35.1, subsection 2, paragraph “b”, subparagraph (2) or (7), with a permanent service-connected disability rating of 100%, as certified by the United States Department of Veterans Affairs, or a permanent and total disability rating based on individual unemployability that is compensated at the 100% disability rate, as certified by the United States Department of Veterans Affairs.
         • A surviving spouse qualifies as long as they:
         • • Is a beneficiary of the estate.
           • • Must provide documentation.
             • Name does not have to be on title.
           • Continues to live in the homestead.
           • • If they move before July 1, they no longer qualify for the credit.
           • Remain unmarried.
         • A surviving child qualifies as long as they:
         • • Are a beneficiary of the estate.
           • • Must provide documentation.
             • Name does not have to be on title.
           • Continue to live in the homestead.
           • • If they move before July 1, they no longer qualify for the credit.
       • An individual who is a surviving spouse or child and who is receiving Dependency and Indemnity Compensation pursuant to 38 U.S.C. §1301 et seq., as certified by the United States Department of Veterans Affairs.

Limits:

• There is no limit to the amount of the exemption, but it may only encompass one property.
• The property can be no larger than 40 acres if unincorporated and .5 acre incorporated.
• Applicant cannot claim a further homestead credit or military tax exemption on any property located in Iowa.

How to Apply:

• Complete the Disabled Veteran Homestead Tax Credit Application.
• Present the following documentation with the application to the Ames City Assessor's Office:
• • The veteran's DD214.
  • A copy of the current Benefits Paid Letter from the United States Department of Veterans Affairs.
  • • The letter must dated within the last 12 months. If a current letter is needed, the local Veterans Administration or the veteran may call 1-800-827-1000 or go to their e-benefits account online for assistance.
    • The letter must indicate either:
      • A permanent rating combined total of 100% service connected disability.
      • A permanent and total disability ratings based on individual unemployability paid at the 100% disability rate.
    • An individual who is a surviving spouse or child and who is receiving Dependency and Indemnity Compensation will need to ANNUALLY submit the letter that states they are receiving DIC payments.
  • If the homestead property was acquired under 38 U.S.C. §21.801, 21.802, prior to August 6, 1991, or under 38 U.S.C. §2101, 2102, the assessor's office will need documentation that shows that the veteran received assistance in purchasing or remodeling their property.

Filing Deadline:

• Applications are due to the Ames City Assessor by July 1st of the current assessment year. Applications received after July 1st would apply to the following assessment year.

Duration of Exemption:

• One-time application.
• Credit shall continue to the estate of a veteran, an unmarried surviving spouse or any child as defined in Iowa Code 234.1.
• Ongoing with annual Benefits Paid letter within the last 12 months for surviving spouse or surviving child receiving DIC ((Dependency & Indemnity Compensation) payments.

Military Service Tax Exemption

Iowa Code Chapter 35 Section 1 and Chapter 426A

Eligibility:

• Individual must have served full time active duty (other than active duty for training purposes) during one of the periods of war or conflict enumerated in Iowa law and must have been honorably separated or discharged from the military service.
• • A member of the United States Reserves who completed a minimum aggregate of ninety days of active federal service, other than training, and was discharged under honorable conditions, or was retired under Title X of the United States Code is eligible.
  • A member of the Iowa National Guard who was activated for federal duty, other than training, for a minimum aggregate of ninety days, and was discharged under honorable conditions or was retired under Title X of the United States Code is eligible.
• A copy of the veteran's discharge papers, usually Form DD-214, must be filed with the Story County Recorder's Office prior to applying for the military exemption.

Current Qualifying Dates:

     Additions to Eligibility as per House File 374 (Effective May 5, 2005) and
     Changes to Eligibility Additions as per House File 2751 (Effective May 8, 2006):

• Former members of the Armed Forces of the United States who performed at least 18 months of military service, regardless of the time period, and who were honorably discharged are eligible.
• Former members of the Armed Forces of the United States who performed less than 18 months of military service, regardless of the time period, and who were honorably discharged due to a service-related injury are eligible.
• Former members of the United States Reserves and Iowa National Guard who completed at least 20 years of military service and were honorably discharged are eligible.
• Current members of the United States Reserves and Iowa National Guard who have completed at least 20 years of military service are eligible.

Filing Responsibility:

• It is the responsibility of each owner/claimant to file for Military Service Tax Exemption with the city or county assessor on or before July 1 of the year the owner/claimant is first claiming the credit.
• Example: to sign up for the tax credit to take effect for the 2023 assessment year, applications need to be filed on or before July 1, 2023. After that date, the credit will take effect for the 2024 assessment year.
• Please note: Homeowners who apply for the 2023 assessment year will first see the credit on their property tax statements in August of 2024.

How to File:

• City of Ames residents located within the city limits: You can now complete the form(s) online at www.AmesAssessor.org and then mail or drop off the form; or stop into the office in person. The office is located on the second floor of City Hall (515 Clark Avenue). It is open Monday thru Friday from 8 a.m. to 5 p.m.

DD-214:

To find out more information on how to get a copy of your DD-214 go to the National Archives Web site.

Geothermal Heating & Cooling System Property Tax Exemption

Iowa Code Section 427.1 (38) 

Iowa Administrative Rule 70--80.29(427)

Eligibility:

• The exemption is for the assessed value added due to a geothermal installation.
• The geothermal system must have been installed after July 1, 2012.
• Unlike other exemptions, it doesn't have to be applied for in the year it was first added.
• The exemption runs for 10 years after it is applied for.

Filing Responsibility:

• Applications can be found online at https://revenue.iowa.gov/taxes/tax-guidance/tax-credits-deductions-exemption/geothermal-heat-pump-tax-credit
• This application must be filed by February 1 of the first year the exemption is claimed.