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What's New?

Legislative Update Line Changes on the IA 1040 Other News

LEGISLATIVE UPDATE

The 2008 Legislative Summary is available online only.

Legislative changes are incorporated in the information below.

Dependent Child Health Care Coverage: A section has been added to the IA 1040 and IA 1040A. On the paper form, the box is located in the upper right corner of the first page. Taxpayers who do not have health care coverage for their children may be eligible for the state medical assistance program or the hawk-i program. Those who indicate they do not have health care coverage will receive information about these programs.

Bonus Depreciation: Iowa did not adopt the 50 percent “bonus depreciation” provisions of the federal Economic Stimulus Act of 2008 passed by Congress in February 2008 for assets acquired during 2008. The adjustment for depreciation should be made on form IA 4562A to account for the difference between federal and Iowa depreciation.

Small Business Expensing: Iowa did adopt the provisions of the federal Economic Stimulus Act of 2008 relating to increasing the expensing amount under Section 179 of the Internal Revenue Code to $250,000 for the 2008 tax year.

LINE CHANGES

Line 13 Social Security Worksheet

The phase-out of tax on Social Security continues with a 32% reduction established by the Iowa Legislature. For more information, see the 2006 Legislative Summary for SF 2408-C.

Line 24 Adjustments

  • College Savings Iowa or Iowa Advisor 529 Plan:
    The deductible amount for tax year 2008 cannot exceed $2,685 per beneficiary.
  • Vietnam Conflict Bonus: This bonus is available for persons who served on active duty in the United States armed forces from July 1, 1958, through May 31, 1975.

Important: See current Iowa Status on Educator Expenses and Tuition and Fees Deductions

Reminder - The following are available for 2008:

  • Educator expenses
  • Tuition and fees deduction

Line 26 Reminder - Filing thresholds for taxpayers 65 and older

An Iowa return is not required for single persons with income of $18,000 or less, and an Iowa return is not required for all other filers with income of $24,000 or less. In the case of married persons, the higher threshold amounts apply even if only one spouse is 65 years or older as of December 31 of the tax year.

To claim this benefit, taxpayers must check an informational box. On the paper form, the box is located in the upper right corner of the first page of the IA 1040.

Additional information can be found in the 2006 Legislative Summary SF 2408-A.

Line 27 Federal income tax refund received in 2008

Do not include the federal rebate / economic stimulus check.

Line 33 FICA amount

FICA payments for tax year 2008 in excess of $6,324 for Social Security tax for each person can be deducted as a federal tax payment.

Line 37 Itemized Deductions

For itemized deduction calculations dependent upon federal Adjusted Gross Income (AGI), the federal AGI thresholds for tax year 2008 are $159,950 and $79,975.

Important: See current Iowa Status on State Sales Tax Deduction

The itemized deduction for state sales and use tax paid is allowed on the 2008 federal and Iowa Schedule A. The itemized deduction for state sales and use tax paid is allowed on the Iowa Schedule A only if the taxpayer claimed an itemized deduction for state sales and use tax paid on the federal return.

Line 11 of the Iowa Schedule A has the same deduction for qualified mortgage insurance premiums as taken on the federal Schedule A.

School Tuition Organization Tax Credit Contributions: Do not include as an itemized deduction any contributions for which a credit is claimed on line 53 of the IA 1040.

Injured Veterans Grant Program Contributions: These contributions do not qualify as itemized deductions.

Charitable Conservation Contribution Tax Credit: Do not include as an itemized deduction any contributions for which a credit is claimed on line 53 of the IA 1040.

Line 40 Charitable mileage

Iowa charitable mileage formula uses 39 cents.

Line 41 Standard Deduction for tax year 2008:

Filing Status 1: $1,750
Filing Status 3 & 4: $1,750
Filing Status 2, 5 or 6: $4,310

Line 43 Reminder - Alternate tax calculation for taxpayers 65 or older

Taxpayers who are 65 years of age or older - except taxpayers filing Status 1 - who have income just above the threshold amount of $24,000 should complete the alternate tax calculation worksheet for taxpayers 65 or older. In the case of married persons, the alternate tax can be applied even if only one spouse is 65 years or older as of December 31 of the tax year.

Additional information can be found in the 2006 Legislative Summary SF 2408-B.

Line 53 Other Iowa Credits

Form IA 148 Tax Credits Schedule must be completed and attached.

Wind Energy Production Tax Credit: Placed in service on or after July 1, 2005, but before July 1, 2012. Valid use includes on-site consumption.

Charitable Conservation Contribution Tax Credit: A tax credit for conveying real property as an unconditional charitable donation in perpetuity to a qualified organization exclusively for conversation purposes. The tax credit is for 50 percent of the fair market value of a qualified real property interest located in Iowa, up to a maximum amount of $100,000.

Line 58 Checkoffs

New: Child Abuse Prevention

Combined: Veterans Trust / Firefighters

Others:

  • Fish and Wildlife Fund
  • Iowa State Fair Foundation

Line 65 Reminder - Iowa Earned Income Credit

This credit is 7.0% of the federal Earned Income Credit. The Iowa EIC is refundable.

Line 66 Other Refundable Credits

Form IA 148 Tax Credits Schedule must be completed and attached.

Soy-based Transformer Tax Credits: Costs must be incurred after June 30, 2006, and before January 1, 2009.

Line 74 Interest rate 2009

8% per year; 0.7% per month; 0.021918% per day

OTHER NEWS

Due date: April 30, 2009

Farmers and fishers due date: If at least 2/3 of income is from farming or commercial fishing, penalty for underpayment of estimated tax may be avoided in one of the following ways: (1) Pay the estimated tax in one payment on or before January 15, 2009, and file the Iowa income tax return by April 30, or (2) File the Iowa income tax return and pay the tax due in full on or before March 2, 2009.

Military

Tax Rate Schedules (pdf)

Payment Options

  • ePay (direct debit) individual income tax estimated payments and final payment of individual income tax through the Department's eFile & Pay system free of charge.
  • Credit card
  • Check/money order: Send with 1040V (pdf) payment voucher.

Power of Attorney Form (pdf)

The federal power of attorney form is accepted by the Iowa Department of Revenue. You must write a statement on the federal form that indicates you are submitting it for use with State of Iowa forms. The statement needs to be initialed by the taxpayer.