Iowa Form Ia 1040 Instructions
Iowa income tax returns are due April 30, 2014.
Farmers and commercial fishers:
If at least 2/3 of your income is from farming or commercial fishing, you may avoid penalty for underpayment of estimated tax in one of the following ways: (1) Pay the estimated tax in one payment on or before January 15, 2014, and file the Iowa income tax return by April 30, 2014, or (2) file the Iowa income tax return and pay the tax due in full on or before March 3, 2014.
Who must file?:
You must file an Iowa return if you were a resident or part-year resident of Iowa in 2013 and meet any of the following requirements. Nonresidents, see items f. and g.
NOTE: In meeting the filing requirements below, both incomes of husband and wife must be included, and any pension/retirement income exclusion (line 21 of the IA 1040) and any Social Security Phase-out amount from line 12 of the Social Security Worksheet (page 2) must be added back.
- You had a net income (line 26 of the IA 1040) of more than $9,000 and your filing status is single. ($24,000 if 65 or older on 12/31/13)
- You had a net income (line 26 of the IA 1040) of more than $13,500 and your filing status is other than single. ($32,000 if you or your spouse is 65 or older on 12/31/13)
- You were claimed as a dependent on another person's Iowa return and had a net income (line 26 of the IA 1040) of $5,000 or more.
- You were in the military service with Iowa shown as your legal residence even though stationed outside of Iowa.
- You were subject to Iowa lump-sum tax.
- You were a nonresident or part-year resident and your net income from Iowa sources (line 26 of the IA 126) was $1,000 or more, unless below the income thresholds above.
- You were a nonresident or part-year resident and subject to Iowa lump-sum tax or Iowa minimum tax (even if line 26 of IA 126 is less than $1,000).
Nonresidents and part-year residents:
If you are a nonresident or a part-year resident with income from Iowa sources, you must complete both the IA 1040 and the IA 126. See instructions, page 8.
Iowa and Illinois reciprocal agreement:
Any wages or salaries earned by an Iowa resident working in Illinois are taxable only to Iowa and not to Illinois. Any wages or salaries earned by an Illinois resident working in Iowa are taxable only to Illinois and not to Iowa.
An Iowa resident working for wages or salary in Illinois should complete and file Illinois form IL-W-5-NR "Employee's Statement of Nonresidence in Illinois" with the employer so that the employer will withhold Iowa income tax.
An Illinois resident working for wages or salaries in Iowa should complete and file the IA 44-016 "Employee's Statement of Nonresidence in Iowa" with the employer so that the employer will withhold Illinois income tax.
Iowa will tax any Iowa-source income received by an Illinois resident that is not from wages or salaries. Illinois will tax any Illinois-source income received by an Iowa resident that is not from wages or salaries. Examples: gambling winnings and unemployment compensation.
If Illinois income tax has been mistakenly withheld from the wages or salary of an Iowa resident, the Iowa resident must file an Illinois income tax return to get a refund.
Illinois residents who had Iowa income tax withheld in error from their wages and have no other Iowa-source income must file an Iowa income tax return requesting a refund. They should complete Steps 1, 2, and 3 of the IA 1040, show "0" on line 1 of Step 4, line 26 of Step 5, and line 53 of Step 8, write "Illinois resident tax withheld in error" on the face of the return. On the back of the IA 1040 on lines 65, 67, 68, 69, and 70, enter the Iowa tax withheld, sign the return, and include copies of W-2s with the return. Copies of federal and Illinois returns must be enclosed.
Iowa does not have an extension form to obtain additional time to file. To avoid the late-filing penalty, at least 90% of your total tax liability must be paid by April 30, 2014; you will automatically have until October 31, 2014, to file your return. You may, however, owe a 2210 penalty for failure to make estimate payments. You will owe interest on any tax due after April 30, 2014. If you need to make a tax payment to meet the 90% requirement, see payment options on the back cover of this booklet.
Information is available on the Department's website in the 2013 Expanded Instructions.
The federal "injured spouse" form is not recognized by the State of Iowa when using filing status 2 or 3. If your spouse's refund will be used to pay a federal, state, county, or city debt, we suggest each spouse file an IA 1040, filing status 4 to prevent your refund from being applied to your spouse's debt.
Including a copy of your federal return with your Iowa return may help processing your Iowa return.
Consumer's Use Tax:
If you purchased products for use in Iowa from a business located outside Iowa and the seller does not charge you Iowa sales tax, you may owe 6% consumer's use tax on the purchase. This includes items purchased from catalogs and the Internet. See 2013 Expanded Instructions on the Department's website or on the back cover of the IA 1040 booklet for more information on paying consumer's use tax.
NEW FOR 2013:
The IA1040A, Iowa Individual Income Tax Short Form, is no longer available. All Iowa individual income tax filers must use form IA1040. At the time of printing, Iowa has not adopted federal Internal Revenue Code changes regarding the determination of income that occurred after January 2, 2013.
Iowa has not coupled with the 50% bonus depreciation provisions for assets acquired in 2013. The section 179 limit for Iowa for 2013 is $500,000, which is the same as the federal section 179 limit.
A capital gain deduction worksheet is available on the Department's website under "individual income tax forms" which can be included with any return claiming the Iowa capital gains deduction.
Federal tax includes the tax on net investment income under Section 1411(a) of the Internal Revenue Code.
A volunteer firefighter and volunteer emergency medical services personnel tax credit of up to $50 is available.
A custom farming contract tax credit can be awarded to landowners who hire a beginning farmer to do custom farm work. See the 2013 Expanded Instructions for more details on this credit.
The Iowa earned income tax credit is 14% of the federal earned income tax credit.
A taxpayers trust fund tax credit of $54 is available for each taxpayer who files a 2013 Iowa 1040 return by October 31, 2014. The credit is limited to the lesser of the amount shown on line 63 or $54.
All taxpayers choosing to itemize deductions must complete the IA Schedule A. There is a limitation on the amount of itemized deductions that can be claimed for certain high-income taxpayers. The calculation is done on the Iowa Itemized Deductions Worksheet, form IA104.
2013 IA1040 INSTRUCTIONS
CONFIDENTIALITY AND FAIR INFORMATION PRACTICES NOTICE:
Information from your return may be made available to the Internal Revenue Service or the tax officials of another state under a tax information exchange program. Except as allowed by law, information on your return cannot be released to anyone who is not an Iowa Department of Revenue employee. Any Department of Revenue employee who discloses tax return information without legal authority is subject to a fine of $1,000. If you do not provide necessary information or if you provide fraudulent information, you may be charged penalties and interest and may be subject to criminal prosecution.
STEP 1 - NAME / ADDRESS / SOCIAL SECURITY NUMBER
NAME AND ADDRESS:
Enter your information on the form. If using a foreign mailing address, in place of the domestic city, state, and ZIP, please include the foreign city, country and ZIP or postal code. Please provide the Department with your updated address if you move after your return is filed. NOTE: the e-mail address entered will be used by the Department to provide updates on new electronic opportunities. It will NOT be used to request or provide confidential information without your authorization.
IF YOU OR YOUR SPOUSE IS 65 OR OLDER ON 12/31/13: Check the box.
ENTER YOUR / SPOUSE'S SOCIAL SECURITY NUMBER.
DEPENDENT CHILD HEALTH CARE COVERAGE: You are required to indicate the number of dependent children claimed in Step 3 who do and do not have health care coverage. Note: Dependent children covered under the Medicaid or hawk-i programs are considered to have health care coverage.
See the list beginning on page 16. Enter the number of the county in which you lived on December 31, 2013. Nonresidents and part-year residents who moved out of Iowa before December 31, 2013: Enter "00." Part-year residents who moved into Iowa: Enter the number of the Iowa county in which you lived on December 31, 2013. Military personnel: Enter the county number of your Iowa residence, even if you were not physically present in Iowa on the last day of the tax year.
SCHOOL DISTRICT NUMBER:
See the list beginning on page 16. Select the district in which you lived on December 31, 2013. This is not necessarily the district where your children attended school. Nonresidents: If you did not live in Iowa at all during 2013, enter "0000." Part-year residents who moved into Iowa: Enter the Iowa school district in which you lived on the last day of 2013. If you moved out of Iowa before December 31, 2013, enter "9999." Military personnel: Enter the school district number of your Iowa residence, even if you were not physically present in Iowa on the last day of the tax year.
STEP 2 - FILING STATUS
Married taxpayers may reduce their tax liability by using filing status 3 or 4.
Use if you were unmarried, divorced, or legally separated on December 31, 2013, and you do not qualify for any other filing status.
(a) You were married on December 31, 2013, or (b) Your spouse died during 2013 and you did not remarry during the year. If your spouse died during 2013 and had income, you can also file status 3 or 4.
If you are married and want to file separately on one form.
If you and your spouse file separately on two separate forms.
If you are filing as head of household for federal income tax purposes.
If you meet the requirements for qualifying widow(er) for federal income tax purposes.
STEP 3 - EXEMPTIONS
Dependents filing their own returns should claim a $40 personal exemption credit even though they are claimed as a dependent on another person's Iowa return.
STEP 4 - GROSS INCOME
If you use filing status 3 (married filing separately on combined return), complete both columns A and B of the IA 1040. All other filing statuses complete only column A. ALL taxpayers, including nonresidents and part-year residents, report income from ALL SOURCES in this section. Nonresidents and part-year residents also report Iowa-source income on Schedule IA 126, where a CREDIT is calculated.
LINE 1. Wages, Salaries, Tips, Etc.
Report the same W-2 income as shown on your federal income tax return, including military income. See online Expanded Instructions, line 24, for allowable military adjustments.
MARRIED SEPARATE FILERS: W-2 income is reported by the spouse earning the income.
LINE 2. Taxable Interest Income.
Include the same amounts of interest income reported on your federal return with the following modifications:
- Add interest from state and municipal securities unless specifically exempt from Iowa tax. The following securities are exempt: Aviation Authority Bonds, IA Code sec. 330A.16; Beginning Farmer Loan Program Bonds, IA Code sec. 175.17(10); Community College Bond Program Bonds, IA Code sec. 260C.71(6); Community College Residence Halls and Dormitories Bonds, IA Code sec. 260C.61; County Health Center Bonds, IA Code sec. 331.441(2)C(7); E911 Emergency Telephone Service Program Bonds, IA Code sec. 34A.20(6); Interstate Bridges Bonds, IA Code sec. 313A.36; IA Board of Regents Bonds for buildings and facilities, IA Code chapters 262.41, 262.51, 262.60, and 262A.8; IA Higher Education Loan Authority, IA Code sec. 261A.27; IA Municipality Urban Renewal Bonds, IA Code sec. 403.9(2); IA Rural Water District Revenue Bonds and Notes, IA Code sec. 357A.15; Low Income Housing Bonds, IA Code sec. 403A.12; Prison Infrastructure Revenue Bonds, IA Code sec. 16.177(8); Regents Institutions Medical and Hospital Buildings at University of IA Bonds, IA Code sec. 263A.6; Soil Conservation Districts Revenue Bonds, IA Code sec. 161A.22; Quad Cities Interstate Metropolitan Authority Bonds, IA Code sec. 28A.24; Sewage Treatment Works Revenue Bonds, IA Code sec. 16.131(5); Underground Storage Tank Fund Revenue Bonds, IA Code sec. 455G.6(14); Vision IA Program, IA Code sec. 12.71; Warehouse Project Revenue Bonds, IA Code sec. 123.159; IA Utilities Board and Consumer Advocate Building Bonds, IA Code sec. 12.91(9); Honey Creek Premier Destination Park Bonds, IA Code sec. 463C.12(8), School Infrasturcture Program Bonds, IA Code sec. 12.81(8); Appropriation Bonds, IA Code sec. 12.87(8).
- Deduct interest received from federal securities (for example, U.S. Savings Bonds, U.S. Treasury Notes). Do not subtract interest from repurchase agreements of U.S. Government securities. The following are taxable: Government National Mortgage Assoc. (Ginnie Mae) Securities; Federal National Mortgage Assoc. (Fannie Mae) Securities; Federal Home Loan Mortgage Assoc. (Freddie Mac) Securities; Federal Agricultural Mortgage Corporation (Farmer Mac).
MARRIED SEPARATE FILERS: Divide interest income based on ownership of the account or certificate.
- Jointly held: Divide equally between spouses.
- Held in the name of only one spouse: Allocate interest wholly to that spouse.
LINE 3. Ordinary Dividend Income.
Report the same dividends as you reported on your federal return with the following modifications:
- Add all dividends from mutual funds, investment trusts, or regulated investment companies investing in state and municipal bonds.
- Deduct that portion of any net dividends from a mutual fund, investment trust, or regulated investment company that is attributable to federal securities.
MARRIED SEPARATE FILERS: Divide dividends based on registered ownership of stock.
- Jointly held: Divide equally between spouses.
- Held in the name of only one spouse: Allocate dividends wholly to that spouse.
LINE 4. Alimony Received.
Include the same alimony as is shown on your federal return.
MARRIED SEPARATE FILERS: Reported by the spouse who received the alimony.
LINE 5. Business Income/Loss.
Report the net business income or loss from federal Schedule C or C-EZ. Attach a copy of the federal form. Need a sales tax permit? Check
MARRIED SEPARATE FILERS: Reported by the spouse deriving the income or loss.
LINE 6. Capital Gain/Loss.
Enter 100% of any capital gain or loss as reported on line 13 of your federal 1040. Do not subtract any Iowa capital gain deduction on this line. See line 23. Include a copy of your federal Schedule D and form 8949.
MARRIED SEPARATE FILERS: Taxpayers who filed separate federal returns should report capital gain or loss as reported for federal tax purposes. If a joint federal return was filed, each spouse must report capital gain on the basis of ownership of the property sold or exchanged. The combined net capital gain or loss must be the same as reported on the joint federal return.
LINE 7. Other Gains/Losses.
If you sold or exchanged assets used in a trade or business and completed federal form 4797, enter 100% of the gain or loss. Include a copy of federal form 4797.
MARRIED SEPARATE FILERS: Divide gains or losses based on ownership of the asset sold or exchanged.
LINE 8. Taxable IRA Distributions.
Enter the amount of taxable IRA distributions as shown on your federal return.
MARRIED SEPARATE FILERS: Taxable IRA distributions should be reported by the spouse whose name is on the account.
LINE 9. Taxable Pensions and Annuities.
The same amounts of pensions and annuities are taxable for Iowa as are taxable on your federal return, except Railroad Retirement benefits paid by the Railroad Retirement Board. These are not taxable on the Iowa return. Do not subtract any Iowa pension exclusion on this line. See line 21.
MARRIED SEPARATE FILERS: The taxable portion of pensions and annuities is reported by the spouse who received the income.
LINE 10. Rents, Royalties, Partnerships, Estates, Etc.
Report the income or loss from federal Schedule E and include a copy.
MARRIED SEPARATE FILERS: Divide income or loss from Schedule E based on ownership of the asset-producing income or partnership interest or individual named as beneficiary.
LINE 11. Farm Income/Loss.
Enter the income or loss from federal Schedule F. Include a copy to your Iowa return.
MARRIED SEPARATE FILERS: Farm income must be reported by the spouse who claims it for self-employment tax purposes on the federal Schedule SE.
LINE 12. Unemployment Compensation.
Enter the amount of unemployment compensation benefits that was taxable on your federal return, except for unemployment compensation and sickness insurance benefits paid by the Railroad Retirement Board.
MARRIED SEPARATE FILERS: If both spouses received unemployment benefits, each of the spouses should report the benefits received as shown on the 1099-G for each spouse.
LINE 13. Taxable Social Security Benefits.
Iowa does not tax Social Security benefits in the same manner as the Internal Revenue Service. Iowa is implementing a gradual phase-out of the tax on Social Security income. For tax year 2013, the phase-out percentage is 89%. To compute the amount of Social Security benefits that are taxable to Iowa, complete the worksheet.
MARRIED SEPARATE FILERS:
- If both spouses received Social Security benefits, the taxable amount is allocated between the spouses in the ratio of the benefits received by each spouse to the total benefits received.
- If only one spouse received benefits, that spouse should report the portion of the benefits that is taxable.
LINE 14. Other Income, Gambling Income, Bonus Depreciation/ Section 179 Adjustment.
Enter taxable income not reported on lines 1-13. Write an explanation of the type of income. Examples of income to be reported include:
- Baby-sitting income not reported on federal Schedule C or C-EZ.
- Bonus depreciation/section 179 adjustment from the IA 4562A; include the IA 4562A with your return.
- Capital gain from installment sales in 2013: Accrual-method taxpayers may use the installment method for reporting capital gain on their Iowa returns.
- College Savings Iowa or Iowa Advisor 529 Plan: Income received from the cancellation of a participation agreement to the extent the amount was previously deducted on line 24 of the IA 1040.
- Director's fees
- Drilling: Intangible drilling costs that were reported on federal form 6251.
- Executor's fees
- Gambling winnings: You must report the full amount of gambling winnings. Report any Iowa tax withheld on line 65 of the IA 1040. Gambling losses may be reported as an itemized deduction on Schedule A, but you cannot deduct more than the winnings you report.
- Partnership income and/or S corporation income: Modifications that increased the income.
- Refundable Iowa credits received in 2013 which were included as income on the federal 1040 must also be added back.
- Refunds: State income tax refunds other than Iowa to the extent that the tax refunded in 2013 was deducted on a prior Iowa return.
- Wells: Percentage depletion from an oil, gas or geothermal well that was reported on federal form 6251.
- Other income as reported on line 21 of the federal 1040.
MARRIED SEPARATE FILERS: The spouse to whom the income was paid must report that income.
STEP 5 - ADJUSTMENTS TO INCOME
All taxpayers report adjustments from all sources in this section.
NONRESIDENTS AND PART-YEAR RESIDENTS also report Iowa-source adjustments to income on the Schedule IA 126.
LINE 16. Payments to an IRA, Keogh, or SEP.
Enter the amount claimed on your federal tax return for payments made to your IRA, Keogh Plan, SEP, SIMPLE, or Qualified Plans. Payments to a Roth IRA are not deductible.
MARRIED SEPARATE FILERS:
- If only one spouse has earned income, that individual can contribute up to $5,500 per year ($6,500 if 50 or older) to an IRA account of the nonworking spouse and up to $5,500 per year ($6,500 if 50 or older) to an IRA account of the individual.
- If both spouses earned income and made contributions to an IRA account, each spouse must claim his or her own contribution, not to exceed $5,500 per spouse ($6,500 if 50 or older).
- If both spouses made contributions to an IRA but only a portion of the contribution is deductible on the federal return, the amount of the IRA deduction that is allowed for federal income tax purposes must be allocated between the spouses in the ratio of the IRA contribution made by each spouse to the total IRA contribution made by both spouses.
- For Keogh Plans, SEPs, SIMPLE, or Qualified Plans, each spouse must claim his or her individual contributions.
LINE 17. Deductible Part of Self-employment Tax.
Enter the amount of self-employment tax that was deductible on line 27 of your federal 1040 in computing federal adjusted gross income.
MARRIED SEPARATE FILERS: The deduction is allocated in the ratio of self-employment tax paid by each spouse to the total self- employment tax paid.
LINE 18. Health Insurance Deduction.
Enter 100% of the amount paid for health and dental insurance premiums. This includes all supplemental health insurance, such as Medicare B supplemental medical insurance and Medicare D voluntary prescription drug insurance program (not "Medicare tax withheld" on your W-2), and long-term nursing home coverage. The deduction must be reduced by the amount of any premium reimbursement from Health Reimbursement Arrangements (HRAs). Schedule A may not contain any health insurance premiums which were used as a deduction on line 18. Note that no deduction is available to any individual who paid health insurance premiums on a pretax basis.
MARRIED SEPARATE FILERS: If one spouse is employed and has health insurance premiums paid through wages, that spouse will claim the entire deduction. If both spouses pay health insurance premiums through their wages, each spouse will claim what he or she paid.
If both spouses have self-employment income, the deduction for self-employed health insurance must be allocated between the spouses in the ratio of each spouse's self-employment income to the total self- employment income of both spouses. If health insurance premiums are paid directly by one spouse, that spouse will claim the entire deduction. If both spouses paid through a joint checking account, the deduction is allocated between the spouses in the ratio of each spouse's net income to the total net income of both spouses. For this net income calculation, do not include line 18, the health insurance deduction.
LINE 19. Penalty on Early Withdrawal of Savings.
Enter the amount of any penalty you were charged because you withdrew funds from your time savings deposit before its maturity.
MARRIED SEPARATE FILERS: Divide the penalty amount between spouses based upon registered ownership of the time deposit.
LINE 20. Alimony Paid.
Enter the amount of alimony payments or separate maintenance payments that were deductible on your federal tax return.
MARRIED SEPARATE FILERS: Only the spouse liable for these payments can deduct the alimony paid.
LINE 21. Pension/Retirement Income Exclusion.
If you or your spouse receive a pension, annuity, self-employed retirement plan, deferred compensation, IRA distribution, or other retirement plan benefits, you may be eligible to exclude from Iowa income tax part or all of the retirement income that is taxable on your federal return. Social Security benefits are not included. The exclusion can be up to $6,000 for individuals who file status 1, 5, or 6 and up to $12,000 for married taxpayers who file status 2, 3, or 4. To take this exclusion the pensioner or retirement income recipient must meet one of the following conditions:
- 55 years of age or older on December 31, 2013, or
- disabled, or
- a surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion in 2013 on the basis of age or disability.
MARRIED SEPARATE FILERS: If both spouses have pension income, and both meet the eligibility requirements, the exclusion of up to $12,000 is prorated between them in the ratio that each spouse's pension relates to the total pension received by both spouses. If only one spouse has pension income and meets the eligibility requirements, that spouse takes the entire exclusion of up to $12,000. The spouse who has no pension income receives no exclusion.
LINE 22. Moving Expense Deduction.
Enter the deduction for moving expenses incurred in 2013. Include a copy of federal form 3903.
MARRIED SEPARATE FILERS: This deduction must be divided between spouses based on earned income received after their move. If one spouse can show that the move was made for that spouse, that spouse is entitled to the entire deduction.
LINE 23. Iowa Capital Gain Deduction - for certain business/farm assets ONLY.
Gains on the sale of stocks or bonds do not qualify for the capital gain deduction. This is a 100% deduction of qualifying net capital gain realized in 2013. Capital gains from the sale of investment property does not qualify for the capital gain deduction, even if sold to lineal descendants of the owners of the property. Non-farm rental property may qualify. Material participation and holding period requirements, plus a flowchart to assist in determining if a gain qualifies, may be found in the online Expanded Instructions. (See Capital Gain Deduction Worksheet) For gains related to an ESOP, please see the online Expanded Instructions for qualifications.
MARRIED SEPARATE FILERS: Divide the capital gain deduction based on ownership of the asset.
- Jointly held: Divide equally between spouses.
- If other than jointly held: Divide between spouses based on percentage of ownership.
LINE 24. Other Adjustments.
Enter the total of other allowable adjustments as listed below. Include an explanation for each adjustment.
- Accrual method
- Active Duty Military Pay included in line 15 Gross Income (see online Expanded Instructions)
- Alternative motor vehicle deduction of $2,000 for those completing federal form 8910 (Alternative Motor Vehicle Credit)
- Capital gain from installment sales reported on the 2001 Iowa return using the accrual method
- Capital or ordinary gain from involuntary conversion related to eminent domain
- Claim of Right Deduction may be taken on line 24, or you can calculate the tax reduction as a credit claimed on line 61, but not both
- College Savings Iowa or Iowa Advisor 529 Plan, up to $3,045 per beneficiary
- Disability income exclusion, include IA 2440
- Domestic production activities deduction, see federal return
- (no adjustment currently assigned to "j")
- Employer Social Security credit from federal return
- Federal alcohol and cellulosic biofuel fuels credit from federal return
- Foreign-earned income exclusion and/or foreign housing deduction from federal return
- Gains or losses from distressed sale transactions
- Health savings account deduction from federal return
- Injured veterans program, contributions to (do not put on IA Sch. A)
- Injured veterans program, grants from
- In-home health care
- Iowa Veterans Trust Fund
- Military exemptions, not already excluded (see online Expanded Instructions)
- Net operating loss, Iowa
- Organ transplant expenses
- Partnership income and/or S corporation income: Modifications that decreased the income
- Segal Americorps Education Award Payments
- Speculative shell buildings
- Student loan interest deduction from federal 1040, line 33, or from federal 1040A, line 18
- Victim compensation awards
- Wages paid to certain individuals
- Work Opportunity Credit from federal return
- Other federal adjustments prior to the calculation of federal 1040 line 38 (federal AGI) not already taken on the IA 1040
- Educator expenses
- Tuition and fees deduction
MARRIED SEPARATE FILERS: When the adjustment is attributable to a specific spouse, it is taken by that spouse. When the adjustment is not attributable to any one spouse, it must be prorated based on the net income amounts on line 26. Calculate through line 26 as if the adjustment in question were excluded. If the adjustment is attributable to a dependent, such as the student loan interest deduction, it is prorated based on net income before the adjustment in question.
Line 26 QUALIFICATIONS FOR EXEMPTION FROM TAX:
If you qualify for the low income exemption as explained below, enter the words "low income exemption" in the area to the left of your net income figure on line 26. Enter zero on line 53 and complete the remainder of the return.
The following income must be included when determining if you are eligible for the $9,000 exemption or the $13,500 exemption ($24,000 or $32,000 if 65 or older on 12/31/13).
- The incomes of both spouses must be combined to determine if you meet this exemption from tax.
- The amount of any pension exclusion that is taken on line 21 of the IA 1040.
- Any Social Security Phase-out amount from line 12 of the Social Security Worksheet on page 2.
- Any amount of lump-sum distribution separately taxed on federal form 4972.
- Any net operating loss carryover.
FILING STATUS 1, SINGLE:
If you are using filing status 1 (single), you are exempt from Iowa tax if you meet either of the following conditions:
- Your net income from all sources, line 26, is $9,000 or less and you are not claimed as a dependent on another person's Iowa return. ($24,000 if you are 65 or older on 12/31/13)
- Your net income from all sources, line 26, is less than $5,000 and you are claimed as a dependent on another person's Iowa return.
ALL OTHER FILING STATUSES:
If you are filing jointly, separate on a combined return, head of household, or qualifying widow(er), you are exempt from Iowa tax if you meet the following condition:
- Your net income from all sources, line 26, is $13,500 or less and you are not claimed as a dependent on another person's Iowa return. ($32,000 if you or your spouse is 65 or older on 12/31/13)
MARRIED SEPARATE FILERS: Married taxpayers filing separate combined or separate returns must use the combined income of both spouses in determining eligibility for exemption from tax. If either spouse has a net operating loss that is carried back or forward, then the other spouse cannot use the low income exemption. If the spouse with the net operating loss chooses not to carry the loss back or forward, then the other can claim the low income exemption. A statement must be attached to the return saying that the spouse with the net operating loss will not carry it back or forward.
Nonresidents and Part-year Residents:
In addition to the exemption provisions above, if you were a nonresident or part-year resident and had net income from Iowa sources of less than $1,000 (see note below) you are exempt from Iowa tax. To review instructions for "Iowa-source income," see the instructions for lines 1-26 of the IA 126. If you had Iowa tax withheld and are requesting a refund, or choose to file an Iowa return even though you aren't required to do so, you must complete the entire IA 1040 and the entire IA 126.
NOTE: If you were a nonresident or part-year resident and subject to Iowa lump-sum tax or Iowa minimum tax (even if Iowa-source income is less than $1,000), you are required to file an Iowa return reporting the lump-sum and/or minimum tax even if you have no regular Iowa income tax liability.
STEP 6 - FEDERAL TAX ADDITION AND DEDUCTION
LINE 27. Federal Income Tax Refund/Overpayment Received in 2013.
Any federal income tax refund received during 2013 must be reported on this line. To find out the amount of your federal refund, you must contact the IRS at 1-800-829-1040 or www.irs.gov. If you chose to have any part of an overpayment of federal income tax credited to estimated tax payments for 2013, the amount should be claimed as 2013 estimated tax paid on line 32. The total overpayment must be reported on line 27. Any portion of the federal refund received due to the motor fuel tax credit must be reported on the Iowa return.
Do not include the federal refund in the following situations:
- Do not include any part of the refund received from Earned Income Tax Credit, additional child tax credit, first-time homebuyer credit, refundable education credit, or adoption tax credit.
- You are filing an Iowa return for 2013 for the first time because you moved into Iowa during the year. A refund of federal tax received in 2013 is not reported if the tax was not deducted from Iowa income in a prior year.
- The refund you received was from a year in which you did not take a deduction for the payment of federal tax because your income was less than the minimum amount for paying Iowa tax or your tax for that year was calculated using the alternate tax computation.
- You were a nonresident for the tax year of the refund and were not required to file an Iowa return for that year.
MARRIED SEPARATE FILERS: If the refund received in 2013 was from a jointly-filed federal return, it must be divided between the spouses in the ratio of the spouses' Iowa net incomes in the year for which the refund was issued.
LINE 28. Self-employment/Household Employment Taxes.
- If any part of the federal tax payments on lines 31, 32, or 33 include self-employment tax, then the self-employment tax must be added back on line 28.
- If any part of the federal tax payments on lines 31, 32, or 33 include federal household employment taxes, then federal household employment taxes must be added back on line 28.
MARRIED SEPARATE FILERS: Each spouse must claim his or her own self-employment tax. Household employment taxes are divided between spouses in the ratio of their respective net incomes.
LINE 31. Federal Tax Withheld.
Enter the amount listed in the box labeled "federal income tax withheld" on the W-2 or 1099 form(s) that you received.
MARRIED SEPARATE FILERS: Each spouse may claim only his or her own federal income tax withheld from wages.
LINE 32. Federal Estimated Tax Payments Made in 2013.
Enter the federal estimated income tax payments made in 2013. Include any credit applied from your 2012 federal income tax overpayment. Federal Tax includes the tax on net investment income under section 1411(a) of the Internal Revenue Code.
MARRIED SEPARATE FILERS: All federal estimated tax payments made in 2013 are divided between spouses in the same ratio as their incomes not subject to federal withholding for the 2013 tax year.
LINE 33. Additional Federal Tax Paid in 2013.
- Enter the amount of additional federal income tax paid during 2013 for tax year 2012 and any other years before 2013. The amount of additional federal income tax paid is deductible only if Iowa income tax returns were required to be filed for the year for which the additional federal income tax was paid. Include only the actual federal tax payments made in 2013, but DO NOT include penalties and interest.
MARRIED SEPARATE FILERS: The additional federal tax paid must be divided between the spouses in the ratio of the spouses' Iowa net incomes for the prior years for which they paid additional federal income tax.
- FICA payments in excess of $7,049.40 for Social Security tax for each person and the motor fuel tax credit from the 2013 federal return can be deducted as a federal tax payment on line 33.
STEP 7 - ITEMIZED OR STANDARD DEDUCTION
You may itemize deductions or claim the Iowa standard deduction, whichever is larger. You may itemize deductions on your Iowa return even if you did not itemize deductions on your federal return. You must complete the Iowa Schedule A to itemize deductions on the Iowa return.
MARRIED SEPARATE FILERS: If one spouse uses the itemized deduction, then both spouses must use the itemized deduction, even if separate Iowa returns are filed. Itemized deductions must be divided between spouses in the ratio of their respective net incomes.
LINE 37. Itemized or Standard Deduction:
Mark the correct box to show the deduction method used.
STANDARD: Tax year 2013, standard deduction is:
Filing Status 1: $1,900
Filing Status 3 & 4: $1,900 for each spouse
Filing Status 2, 5 or 6: $4,670
The itemized deduction for state sales and use tax paid
is allowable only if the taxpayer claimed an itemized deduction for state sales and use tax paid on the federal form.
- Taxpayers with the mortgage interest credit deduction can claim on their Iowa return a deduction on line 9b of Schedule A for all home mortgage interest paid in the tax year and not just the home mortgage interest that was deducted on the federal Schedule A.
School Tuition Organization, Charitable Conservation Tax Credit Contributions, and Endow Iowa Tax Credit:
Do not include as an itemized deduction any contributions for which a credit is claimed on line 50 of the IA 1040.
Injured Veterans Program Contributions:
These contributions do not qualify as itemized deductions but can be taken on line 24.
Health Insurance Premiums:
Do not include as an itemized deduction any health insurance premiums shown on line 18 of the IA 1040.
Vehicle Registration Fee Deduction.
If you itemize deductions, a portion of the annual automobile registration fee you paid in 2013 may be deducted as personal property tax on your Iowa Schedule A, line 6. This deduction is for annual registration fees paid based on the value of qualifying automobiles and multipurpose vehicles. Multipurpose vehicles are defined as motor vehicles designed to carry not more than 10 people, and constructed either on a truck chassis or with special features for occasional off-road operation [Iowa Code section 321.1(44)]. Annual registration fees on the following vehicles are not deductible: pickups (model year 2009 or older), motor trucks, work vans, ambulances, hearses, non-passenger-carrying vans, campers, motorcycles, or motor bikes. See 2013 online Expanded Instructions for additional details, including information about model year 2010 and newer pickups. Newer Vehicles: Use the following worksheet to calculate the deductible amount of registration fees paid in 2013 for qualifying automobiles (model year 2003 or newer) and multipurpose vehicles (model year 1993 or newer).
Line 37 Vehicle Registration Deduction Worksheet
|1. Enter the actual annual registration fee paid
|2. Take the weight of your vehicle and divide it by 250. The weight is found on your registration.
|3. Subtract line 2 from line 1. This is the deductible amount for line 37.
For qualifying automobiles (model year 2002 or older) and multipurpose vehicles (model year 1992 or older) the deductible amount is 60% of the registration fees paid in 2013.
Iowa Itemized Deduction Worksheet form IA 104
must be used if your federal AGI is more than $300,000 for married filers ($150,000 for married taxpayers filing separate returns) or qualified widow(er), $275,000 for head of household filers and $250,000 for single filers.
Other Deductions (line 27 of IA Schedule A)
Expenses Incurred for Care of a Disabled Relative:
Expenses, not to exceed $5,000, incurred in caring for a disabled relative in your home may be deducted. The expenses must be for the care of a person who is your grandchild, child, parent, or grandparent. The disabled person must be unable, by reason of physical or mental disability, to live independently and must be receiving or be eligible to receive medical assistance benefits under Title 19 of the U.S. Social Security Act. Only expenses that are not reimbursed can be claimed. An itemized list of expenses must be included with the return. Items may include food, clothing, medical expenses not otherwise deductible, and transportation. The following expenses cannot be included: rent, mortgage payments, interest, utilities, house insurance, and taxes. A statement from a qualified physician certifying that the person with the disability is unable to live independently must be submitted with the return the first year the deduction is taken and every third year thereafter.
MARRIED SEPARATE FILERS: The total deduction claimed by both spouses for each relative with a disability may not exceed $5,000.
If you adopted a child during the tax year, you may be eligible to deduct a portion of the adoption expenses you paid in 2013. This deduction is taken in the year you paid the expenses even if the child is not placed in your home that year. Costs relating to the child's birth, any necessary fees, and all other costs connected with the adoption procedure are allowed. Include a list of expenses with your return.
Subtract 3% of your total Iowa net income entered on line 26 from the total of qualifying adoption expense. If married, 3% of the combined net income must be subtracted. Only the amount which exceeds 3% of your total Iowa net income may be deducted.
Mileage Deduction for Charitable Purposes:
Iowa allows you an additional deduction for automobile mileage driven for charitable organizations. Calculate the deduction as follows:
1. Number of miles x 39¢/mile.... _____
2. Less charitable mileage deduction already included
as part of line 26, Iowa Schedule A 2...................._____
3. Equals additional mileage deduction
for charitable purposes.............._____
STEP 8 - TAX CALCULATION
LINE 39. Tax from Tables or Alternate Tax.
The tax tables begin on page 11 for all filing statuses.
Alternate Tax Calculation:
For filing statuses 2, 3, 4, 5, and 6. If the combination of your net income from line 26 PLUS any pension exclusion taken on line 21 and Social Security Phase-out taken on line 12 of the Social Security Worksheet on page 2 exceeds $13,500 ($32,000 if you or your spouse is 65 or older on 12/31/13), you are required to file a return but you may owe less tax by completing the worksheet below to compute your tax liability. Enter this alternate tax on line 39 if it is less than the tax from the tax table. This is not available to status 1 filers.
If you are married filing separately and one spouse has a net operating loss that will be carried back or forward, then you cannot use the alternate tax computation. If the spouse with the net operating loss elects not to carry the net operating loss back or forward, then you can use the alternate tax computation. A statement must be included with the return saying that the spouse with the net operating loss will not carry it back or forward.
ALTERNATE TAX CALCULATION
|1. Enter the total of net income from line 26, pension exclusion from line 21 of the IA 1040 and Social Security Phase-out taken on line 12 of the Social Security Worksheet on page 2. Filing statuses 3 or 4: Enter combined totals of both spouses.
|3. Income subject to alternate tax. Subtract line 2 from line 1
|3. Subtract line 2 from line 1. This is the deductible amount for line 37.
|4. Multiply line 3 by 8.98% (.0898).
|5. Using the tax tables, determine the tax on the taxable income from line 38 of the IA 1040. Status 3 and 4 filers: Calculate tax separately and combine the amounts.
|6. Compare the amounts on line 4 and line 5. Enter the smaller amount here and on line 39, IA 1040.
MARRIED SEPARATE FILERS (including status 4): Use the combined net incomes of both spouses to compute the alternate tax. (If you are status 4 and do not provide the other spouse's income in Step 2 of the IA 1040, you will not be allowed the alternate tax calculation.) Divide the alternate tax between spouses in the ratio of the net income of each spouse to the combined net income of both spouses. "Net income" for purposes of this proration is the amount from line 26, plus any pension exclusion from line 21 and Social Security Phase-out taken on line 12 of the Social Security Worksheet.
LINE 40. Iowa Lump-sum Tax.
Enter 25% of federal tax from form 4972.
LINE 41. Iowa Minimum Tax.
The Iowa minimum tax is imposed, for the most part, on the same tax preference items and adjustments on which federal minimum tax is imposed. However, you may be subject to Iowa minimum tax even if you have no liability for federal minimum tax. If you had tax preference items and adjustments in 2013, see form IA 6251 for further information.
Nonresidents and Part-year Residents:
If you have Iowa-source tax preferences or adjustments, you may be subject to Iowa minimum tax. See form IA 6251.
LINE 44. Tuition and Textbook Credit.
Taxpayers who have one or more dependents attending Kindergarten through 12th grade in an accredited Iowa school may take a credit for each dependent for amounts paid for tuition and textbooks. Dependents must have attended a school in Iowa that is accredited under section 256.11, not operated for a profit, and adheres to the provisions of the U.S. Civil Rights Act of 1964. The credit amount is 25% of the first $1,000 paid for each dependent for tuition and textbooks. In the case of divorced or separated parents, only the spouse claiming the dependent can claim the amounts paid by that spouse for tuition and textbooks for that dependent. Expenses for textbooks or other items for home schooling, tutoring, or schooling outside an accredited school do not qualify for the credit. "Tuition" means any charges for the expense of personnel, buildings, equipment, and materials other than textbooks, and other expenses that relate to the teaching of only those subjects legally and commonly taught in Iowa's public elementary and secondary schools. "Textbooks" means books and other instructional materials used in teaching those same subjects. This includes fees, books, and materials for extracurricular activities. Examples of extracurricular activities: sporting events, speech activities, musical or dramatic events, driver's education (if paid to a school), awards banquets, homecoming, prom (purchase of clothing does not qualify), and other school related social events. For lists of items eligible and not eligible for the credit, see 2013 Expanded Instructions on our website. (Credit can be claimed only for dependents listed on the return.) Calculate the proper amount of expenses per dependent and multiply the amount - not to exceed $1,000 - by 25% (.25).
Students Patty and Mark have qualifying expenses of $1,400 and $700 respectively. Their parents can take a credit of $250 (25% of $1,000 maximum) for Patty and $175 (25% of $700) for Mark, for a total credit of $425.
MARRIED SEPARATE FILERS: This credit must be taken by the spouse claiming the dependent. Any unused part of this credit cannot be used by the other spouse.
LINE 45. Volunteer Firefighter and Volunteer Emergency Medical Services (EMS) Personnel Tax Credit.
A tax credit of up to $50 is available for volunteer firefighters and volunteer EMS personnel. A volunteer firefighter must be an active member of an organized volunteer fire department in Iowa who has met minimum training standards. Volunteer EMS personnel must be individuals trained to provide emergency medical care, who are certified as first responders, and have been issued certificates by the Iowa Department of Public Health. The tax credit equals $50 if the volunteer served for all of 2013. If the volunteer did not serve during all of 2013. The $50 credit is prorated based on the number of months the volunteer served, rounded to the nearest dollar. If an individual is both a volunteer firefighter and a volunteer EMS, the credit is still limited to $50 in total.
LINE 48. Credit for Nonresident or Part-year Resident.
Enter the amount of your nonresident/part-year resident tax credit from Schedule IA 126, line 33. IA 126 instructions begin on page 8. Examples are available in the online Expanded Instructions. You may owe less tax by using filing status 3 or 4. A copy of Schedule IA 126 and a copy of your federal return must be included.
LINE 50. Other Nonrefundable Iowa Credits.
Enter the total of the credits from Part I of the IA 148 Tax Credits Schedule. See the 2013 online Expanded Instructions for the list of credits. You must include the IA 148 with the IA 1040.
LINE 52. School District Surtax/EMS Surtax.
Multiply the amount on line 51 by the surtax rate and enter the result. The applicable school district is the one in which you resided on the last day of the tax year, not necessarily the district where your children attend school. Taxpayers without children, or without children in public school, are still subject to this tax. Surtax rates are listed on pages 16-17. The name of your school district may be found on your voter registration card.
LINE 55. Contributions.
Enter your voluntary contributions to any of the checkoffs in boxes 55a, 55b, 55c, and 55d. Please note that you may contribute to any of the checkoffs regardless of whether you are entitled to a refund or owe additional taxes, but your contribution will reduce your refund or add to the amount you owe. Your contribution this year will qualify as a charitable contribution on next year's return if the return is filed during the calendar year. If you file an amended return, you cannot change your contribution.
MARRIED SEPARATE FILERS: Married couples filing separately on a combined return (filing status 3) must enter their combined checkoff amounts in the appropriate box(es) if both choose to contribute.
STEP 9 -CREDITS
LINE 57. Out-of-state Tax Credit.
All income an Iowa resident earns is taxable to Iowa to the same extent that it is taxable on the federal return even if the income was earned in another state or foreign country. If another state or foreign country taxes that same income, then the Iowa resident may be able to claim the Out-of-state Tax Credit by completing the IA 130 form. See examples on page 10.
LINE 58. Motor Fuel Tax Credit.
Enter the amount of Motor Fuel Tax Credit from Schedule IA 4136. The federal Schedule 4136 cannot be used. The Iowa credit does not apply to fuel used in on-road vehicles or pleasure boats. If you have an Iowa Motor Fuel Tax Refund Permit Number and have claimed any refunds during the tax year, do not claim any credit on this line.
LINE 59. Child and Dependent Care Credit OR Early Childhood Development Credit.
Only one of these credits may be taken. Only taxpayers with a net income of less than $45,000 are eligible to take one of these credits. If you are married, your net income and the net income of your spouse must be combined to determine if you qualify, even if your spouse does not file an Iowa return.
If you are choosing the Child and Dependent Care Credit, use the following worksheet to calculate the credit.
1. Enter the amount from line 11 of federal form 2441...______
2. If total of line 26 of the IA 1040, columns A and B, is:
|Less than $10,000 .......
|$10,000 - $19,999 ......
|$20,000 - $24,999 ......
|$25,000 - $34,999 ...
|$35,000 - $39,999 ...
|$40,000 - 44,999 ..
|$45,000 and over: .....
|Enter % here ...
3. Multiply line 1 by the percentage on line 2.
Enter the result here and on line 59 of the IA 1040...______
Nonresidents and Part-year Residents:
The Child and Dependent Care Credit must be adjusted using the following formula:
(Iowa net income (line 26, IA 126) / All-source net income of you and spouse (line 26, IA 1040)) X credit calculated above = credit online 59
The ratio cannot exceed 100%
If you are choosing the Early Childhood Development Credit, you may take the credit equal to 25% of the first $1,000 of qualifying expenses paid in 2013 for each dependent from the ages of three through five.
Expenses that qualify include the following:
- Services provided by a preschool, as defined in IA Code section 237A.1
- Books that improve child development, such as textbooks, music and art books, teacher's editions, and reading books
- Instructional materials required to be used in a lesson activity, such as paper, notebooks, pencils, and art supplies
- Lesson plans and curricula
- Child development and educational activities outside the home, such as drama, art, music and museum activities, and the entrance fees for such activities
Early childhood development expenses that do not qualify include:
- Food, lodging, or membership fees relating to child development and educational activities outside the home
- Services, materials, or activities for the teaching of religious tenets, doctrines, or worship, if the purpose of these expenses is to instill those tenets, doctrines, or worship
MARRIED SEPARATE FILERS: In computing the credit, the combined net income of both spouses must be used. The credit must be divided between spouses in the ratio of each spouse's net income to their combined net income.
LINE 60. Iowa Earned Income Tax Credit (EITC).
Enter 14.0% (0.14) of the federal EITC claimed on your federal return. Nonresidents and Part-year Residents: The Iowa EITC must be adjusted using the following formula:
(Iowa net income (line 26, IA 126) / All-source net income of you and spouse (line 26, IA 1040)) X Iowa EITC = credit on line 65
The ratio cannot exceed 100%.
MARRIED SEPARATE FILERS: The Iowa EITC must be divided between spouses in the ratio of each spouse's earned income to total earned income. Earned income includes wages, salaries, tips, or other compensation, and net earnings from self-employment.
LINE 61. Other Refundable Credits.
Enter the total of other credits from Part II, IA 148 Tax Credits Schedule. See the 2013 online Expanded Instructions for a list of credits. Include the IA 148 with the IA 1040.
LINE 64. Taxpayers Trust Fund Tax Credit.
A tax credit of $54 can be claimed for each taxpayer who files a 2013 Iowa 1040 return by October 31, 2014. For taxpayers who file a joint return or married filing separately on a combined return, each spouse can claim the $54 credit. The credit is limited to the tax liability shown on line 63, and there is no carry forward of any excess credit that is unused.
LINE 65. Iowa Income Tax Withheld.
Enter the total amount of income tax withheld for Iowa on your W-2s, W-2Gs, and/or 1099s.
LINE 66. Estimated and Voucher Payments.
Enter the total amount of 2013 Iowa estimated tax payments. This includes any fourth quarter payment made in January 2014 and any payments made with the IA 1040V Payment Voucher for 2013. Also include any amount applied to your 2013 Iowa estimated tax from line 71 of your 2012 Iowa income tax return.
STEP 10 - REFUND OR AMOUNT YOU OWE
LINE 73. Penalty for Underpayment of Estimated Tax:
If you are required to make estimated tax payments but fail to make the payments, you are subject to a penalty in addition to any tax you may owe. The penalty is determined in the same way as for federal purposes. Consequently, you must include your Iowa income, lump-sum, and minimum taxes when calculating the penalty for underpayment of estimated tax.
If you are subject to this penalty, complete IA 2210 or IA 2210S (IA 2210F for farmers and fishers), enter the penalty on this line, and include a copy with your return. If you choose to use the annualized method of computing the penalty, include a copy of the IA 2210 Schedule AI with your tax return.
If you are due a refund, subtract the penalty amount from the overpayment you show on line 70 or line 71.
Line 74. Penalty and Interest.
Iowa does not follow the federal extension guidelines.
74a. 10% Penalty for Failure to Timely File a Return:
If you do not file your return by the due date and at least 90% of the correct tax is not paid, you owe an additional 10% of the unpaid tax.
5% Penalty for Failure to Timely Pay the Tax Due: If you file your return on time but do not pay at least 90% of the correct tax due, you owe an additional 5% of the unpaid tax.
You will never be subject to both the 5% and 10% penalties. The penalty will be the applicable 5% or 10%, but not a total of 15%.
Interest must be added to delinquent tax. Interest is added at a rate of 0.4% per month beginning on the day after the due date of the return and accrues each month until paid in full.
LINE 75. You have four options to pay the amount due.
Direct debit payment with the income tax return, ePay (direct debit) at
, credit/debit card, or mail a check/money order with an IA 1040V Payment Voucher from our website, payable to Treasurer, State of Iowa. Do not make payments of less than one dollar. See the 2013 online Expanded Instructions for more information.
STEP 11: POLITICAL CHECKOFF
Contributions to this checkoff do not reduce your refund or increase your amount due. Contributing to this checkoff is not required. You may assign $1.50 to a specific political party or to the Iowa Election Campaign Fund for distribution to qualifying parties. Each spouse may assign $1.50 to the party of choice regardless of the filing status of the return.
STEP 12: SIGNATURE
Returns are not processed and refunds are not issued if returns are not signed. If you and your spouse file a joint or combined return, both of you must sign. Deceased Taxpayer: If your spouse died and you are filing a joint or combined return, write on the deceased's signature line "Filing as a surviving spouse," check the box, and enter the date of death. Also, enclose any forms required to be filed with your federal return, such as federal form 1310 or a copy of the court certificate showing your appointment as a personal representative of the decedent.