Proposed bill would incentivize new remote workers in Iowa

Last Friday marked the first “funnel” deadline of the 2021 session, which requires bills to pass through a full committee in either the House or Senate to move forward. One of the proposed bills that is still alive, Senate File 491, would incentivize remote workers to move to the state.

The bill would create and make appropriations for a remote worker grant fund for new remote workers who move to Iowa but are employed by out-of-state companies.

Under the bill, a new remote worker would be eligible for a grant for qualifying remote worker expenses in an amount not to exceed $5,000 per calendar year. A new remote worker is eligible for a grant for a maximum of two calendar years.

The bill defines a “new remote worker” as an individual who is a full-time employee of a business that has its primary place of business outside of Iowa, and who performs the majority of their duties for the business remotely from a home office or a coworking space located in Iowa.

“Qualifying remote worker expenses” is defined in the bill as actual, substantiated costs that a new remote worker incurs for relocation. Examples of this include membership costs for a coworking space, new computer software and hardware, and broadband access or upgrades. The expenses must be necessary to perform the remote worker’s employment duties and cannot also be reimbursed by the employer.

The bill would require the Iowa Economic Development Authority (IEDA) to establish a new remote worker grant fund for the purpose of providing grants to new remote workers. The IEDA would be required by the bill to award grants on a first-come, first-served basis. Total grant funding must not exceed $750,000 in calendar year 2022, $350,000 in 2023, $400,000 in 2024, $450,000 in 2025, and $500,000 in 2026. To the extent funds remain available in subsequent calendar years, total grants could not exceed $200,000 in any calendar year. 

In order to apply for the grant, individuals would need to become full-time residents after January 1, 2022.