IA130
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IA 130 GENERAL INSTRUCTIONS

IA 130 Form Section I Section II
Additional examples that include completed forms

Also see instructions for line 63, IA 1040.

Nonresidents of Iowa may not claim this credit.

Part-year residents of Iowa may claim this credit ONLY if any income earned while an Iowa resident was also taxed by another state or foreign country.

The tax imposed on your income is the tax shown on the income tax return you filed with that state or foreign country. “Tax imposed” is the tax calculated from the tax formula/tables on the other state/foreign country’s tax return, less any non-refundable credits. Do not reduce this figure by the tax withheld or estimated tax payment made to the other state/foreign country.

You must complete a separate IA 130 for each state or foreign country.

Note: The credit or portion of the credit must not exceed the amount of the Iowa tax imposed on the same income which was taxed by the other state or foreign country.

Shareholders of S corporations who have income from the corporation that was apportioned outside Iowa and not taxed by Iowa cannot claim an out-of-state credit on this income.

Attach the following to your Iowa return:

  • The IA 130
  • The income tax return you filed with the other state
  • If you are claiming the credit for taxes paid to a foreign country, include Federal form 1116, Computation of Foreign Tax Credit if it is required with your Federal return.

If you were assessed a minimum tax or a special tax on a lump sum distribution by another state, see the following special instructions.

SPECIAL INSTRUCTIONS FOR MINIMUM TAX OR LUMP-SUM DISTRIBUTION TAX:

  • If you were assessed a minimum tax or a special tax on a lump-sum distribution by another state or items similarly taxed on your Iowa return, you must separately compute an out-of-state credit for each of these items. Do not include minimum tax or a special lump-sum tax in computation of regular tax credit.
  • Minimum Tax -- Report the amount of preference items taxed by the other state on line 1. However, a preference item may be included in line 1 only if it is also a preference item for Iowa purposes. Enter on line 2 the amount of Iowa preference items. Report on line 4 the minimum tax figure from line 45, IA 1040. On line 6, report only the portion of the minimum tax liability from the other state which applies to preference items which were also taxed in Iowa.
  • Lump-Sum Distribution -- Report on line 1 the amount of distribution subject to special lump-sum tax by other state (do not include distribution taxed by other state as part of gross income). Enter on line 2 the total lump-sum distribution taxed by Iowa. Report on line 4 the Iowa Lump-Sum Distribution Tax from line 44, IA 1040.

 


Section 1 - Full Year Iowa Residents Only

1. Amount of gross income you received that was taxed by the other state or foreign country. This is the amount of income that is not only taxable to Iowa but taxable to another state or foreign country because they consider that income to be derived from their state or foreign country.

2. Gross income for residents from line 15 of the IA1040.

3. Divide line 1 by line 2 and enter the percentage. This cannot exceed 100%.

4. Tax from line 55 of the IA1040 less any lump sum tax and minimum tax.

5. Multiply line 4 by the percentage on line 3.

6. Enter the tax imposed by the other state or foreign country. “Tax imposed” is the tax calculated from the tax formula or tax tables on the other state or foreign country’s tax return, less any non-refundable credits. Do not reduce this amount by the tax withheld or estimated tax payment made to the other state or foreign country.

7. Enter the SMALLER of lines 5 or 6. This is your out-of-state tax credit. Enter this amount on line 63 of the IA1040.

EXAMPLE 1: FULL-YEAR IOWA RESIDENTS ONLY

Jennifer lived in Iowa all year but worked in both Iowa and Nebraska. She earned $10,000 in Iowa. She also earned $15,000 in Nebraska that was taxed by Nebraska. Jennifer would report $25,000 on line 15 of the IA1040 as gross income. Line 55 of the IA1040 would be $1,050. On the Nebraska state return the tax imposed* on her income was $450.

 
Column B Spouse
Status 3 Only
Column A You or Joint
1. Amount of gross income you received that was taxed by the other state/foreign country.  
$15,000
2. Gross income for residents from line 15, IA1040.  
25,000
3. Divide line 1 by line 2 and enter the percentage (not to exceed 100.0%)  
60%
4. Tax from line 55, IA1040 (less lump sum tax and minimum tax)  
1,050
5. Multiply line 4 by percentage on line 3  
630
6. Enter the tax imposed* by the other state or foreign country  
450
7. Enter the smaller of line 5 or 6. This is your out-of-state tax credit. Enter this amount on line 63, IA1040  
450


Section 2 - Part-Year Iowa Residents Only

1. Amount of gross income you received while you were an Iowa resident that was taxed by the other state or foreign country. This is the amount of income that, while you were an Iowa resident, is not only taxable to Iowa but taxable to another state or foreign country because they consider that income to be derived from their state or foreign country.

2. Gross income for part-year residents from line 15 of the IA126.

3. Divide line 1 by line 2 and enter the percentage. This cannot exceed 100%.

4. Tax from line 55 of the IA1040 less any lump sum tax and minimum tax.

5. Multiply line 4 by the percentage on line 3.

6. Enter the tax imposed by the other state or foreign country. “Tax imposed” is the tax calculated from the tax formula or tax tables on the other state or foreign country’s tax return, less any non-refundable credits. Do not reduce this amount by the tax withheld or estimated tax payment made to the other state or foreign country.

7. Enter the total amount of gross income taxed by the other state or foreign country. This is the amount of income that is not only taxable to Iowa, but taxable to another state or foreign country because they consider that income to be derived from their state or foreign country.

8. Divide line 1 by line 7 and enter the percentage. This cannot exceed 100.0%

9. Multiply line 6 by the percentage on line 8.

10. Enter the SMALLER of lines 5 or 9. This is your out-of-state tax credit. Enter this amount on line 63 of the IA1040.

EXAMPLE 2: PART-YEAR IOWA RESIDENTS ONLY

Benny lived in Iowa until the end of June. July 1 he moved to Missouri. He worked all year in the state of Missouri. Benny earned a salary of $30,000 for the year, $15,000 while he lived in Iowa and $15,000 while he lived in Missouri. Benny also earned $10,000 farm rental income from farmland located in Iowa. Line 55 of the IA1040 would be $1,292. On the Missouri state return, the tax imposed* on his income was $1,000.

 
Column B Spouse
Status 3 Only
Column A You or Joint
1. Amount of gross income you received that was taxed by the other state/foreign country.  
$15,000
2. Gross income for part-year residents from line 15, IA126  
25,000
3. Divide line 1 by line 2 and enter the percentage (not to exceed 100.0%)  
60%
4. Tax from line 55, IA1040 (less lump sum tax and minimum tax)  
1,292
5. Multiply line 4 by percentage on line 3  
775
6. Enter the tax imposed* by the other state or foreign country  
1,000
7. Enter the total amount of gross income taxed by the other state/foreign country.  
30,000
8. Divide line 1 by line 7 and enter the percentage (not to exceed 100.0%)  
50%
9. Multiply line 6 by the percentage on line 8.  
500
10. Enter the smaller of line 5 or 9. This is your out-of-state tax credit. Enter this amount on line 63, IA1040.  
500

* “Tax imposed” is the tax calculated from the tax formula/tables on the other state/foreign country’s tax return, less any non-refundable credits. Do not reduce this figure by the tax withheld or estimated tax payment made to the other state/foreign country.

Additional examples that include completed forms


IA 1040 Tax Tables

School District Surtax List