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2013 Iowa 1040 Expanded Instructions
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WHAT'S NEW?

Legislative Update Specific Line Information Other News

Legislative Update

The 2013 Legislative Summary is available online only.

Legislative changes are incorporated in the information below.

NOTE: Iowa did not couple with the bonus depreciation provisions allowed for federal tax purposes for the 2013 tax year.

For Individual Income Tax Filers Only:

  • Allow deduction of educator expenses

  • Allow tuition and fees deduction for higher education

  • Allow election to deduct state sales/use tax as an itemized deduction in lieu of state income tax

  • Allow treatment of mortgage insurance premiums as qualified residence interest

  • Allow tax free distribution from an IRA to certain charities for individuals 70½ and older

  • 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.
  • Maintain increased eligibility for student loan interest deduction

  • Maintain increased expense amount allowed for the child and dependent care credit

  • Coupled with federal earned income tax credit changes

  • Members of the armed forces, armed forces military reserve and the national guard in an active duty status can exclude pay received from the federal government for military service performed.

For Individual Income Tax Filers as well as Corporate Income Tax (including S Corporations), Partnership, Fiduciary and Franchise Tax:

  • 2013 section 179 limit for Iowa is $500,000, which is the same as the federal section 179 limit. The phase-out threshold is $2 million.

  • Do not include any deduction for the small business health insurance tax credit that was not allowed as a deduction on the federal return.


SPECIFIC LINE INFORMATION


Step 1

Dependent Child Health Care Coverage: The indication of whether dependents have health care coverage is mandatory and must be completed for 2013. 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. Dependent children already covered under the Medicaid or hawk-i programs are considered to have health care coverage. Those who indicate they do not have health care coverage will receive information about these programs.


Step 2

Filing Status: Same-sex married couples must use filing status 2, 3, or 4 when filing Iowa returns. For additional information, please see Iowa Tax Treatment of Same-Sex Marriages on our Web site.

Lines 2 & 3 Interest & Dividends – Include all interest & dividend income on schedule, then allows adjustments for federal securities, double-exempt municipal bond interest and other nontaxable interest.

Line 13 Social Security Worksheet - The phase-out of tax on Social Security continues with a 89% reduction established by the Iowa Legislature. This is an increase in the exclusion percentage, which was 77% in 2012. For more information, see the 2006 Legislative Summary for SF 2408-C on our Web site.

Line 14 Bonus Depreciation - Iowa has not coupled with 50% bonus depreciation. The section 179 limit for Iowa for 2013 is $500,000.

Line 23 Iowa Capital Gain Deduction –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.

Line 24 Adjustments

  • College Savings Iowa or Iowa Advisor 529 Plan:
    The deductible amount for tax year 2013 cannot exceed $3,045 per beneficiary.
  • Deductions are available for educator expenses for out-of-pocket expenses and the tuition and fees deduction claimed on the 2013 federal return.
  • Members of the armed forces, armed forces military reserve, and the national guard in an active duty status can exclude pay received from the federal government for military service performed.
  • Do not include any deduction for the small business health insurance tax credit that was not allowed as a deduction on the federal return.

Line 27 Federal Income Tax Refund Received in 2013

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, Adoption Tax Credit.

Federal tax includes the tax on net investment income under Section 1411(a) of the Internal Revenue Code. The 0.9% Medicare tax is not considered a federal income tax.

Line 28 Self-employment/Household Employment Taxes
Federal tax includes the tax on net investment income under Section 1411(a) of the Internal Revenue Code. The 0.9% Medicare tax is not considered a federal income tax and is, therefore, not deductible on the Iowa return. Taxpayers can deduct their entire withholding amount on line 31, but the self-employment tax portion must be added back on line 28.   

Line 31 Federal Tax Withheld
Federal tax includes the tax on net investment income under Section 1411(a) of the Internal Revenue Code. The 0.9% Medicare tax is not considered a federal income tax and is, therefore, not deductible on the Iowa return. Taxpayers can deduct their entire withholding amount on line 31, but the self-employment tax portion must be added back on line 28.   

Line 32  Federal Estimated Tax Payments Made in 2013

Federal tax includes the tax on net investment income under Section 1411(a) of the Internal Revenue Code. The 0.9% Medicare tax is not considered a federal income tax and is, therefore, not deductible on the Iowa return.

Line 33 FICA Amount - FICA payments for tax year 2013 in excess of $7,049.40 for Social Security tax for each person can be deducted as a federal tax payment.

Line 37 Deduction

Standard Deduction for tax year 2013:

Filing Status 1: $1,900
Filing Status 3 & 4: $1,900 for each spouse
Filing Status 2, 5 or 6: $4,670

Itemized Deduction

All taxpayers choosing to itemize deductions must complete the Iowa Schedule A.  The federal Schedule A can no longer be used with the Iowa return.

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.

The itemized deduction for state sales and use tax in lieu of state income tax is allowed.

For Iowa purposes, the itemized deduction for state sales and use tax paid is allowed only if the taxpayer claimed an itemized deduction for state sales and use tax paid on the Federal return. If a taxpayer claimed state income taxes as an itemized deduction on the Federal return, or claimed the standard deduction on the Federal return, the taxpayer cannot claim an itemized deduction for state sales and use tax paid on the Iowa return.

If one spouse itemizes deductions, then both spouses must itemize, even if separate Iowa returns are filed.

Deductions for the following are taken on line 27 of the Iowa Schedule A:

  • Expenses incurred for care of a disabled relative
  • Adoption expenses
  • Charitable mileage – Iowa charitable mileage formula uses 39 cents.

Line 45  Volunteer Firefighter/EMS Credit

A volunteer firefighter and volunteer emergency medical services personnel tax credit of up to $50 is available.

Line 50 Other Nonrefundable Iowa Credits

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

A custom farming contract tax credit can be awarded to landowners who hire a beginning farmer to do custom farm work.

Line 55 Reminder - Checkoffs

  • Fish & Wildlife Fund
  • Iowa State Fair Foundation
  • Combined:  Veterans Trust Fund / Volunteer Firefighter Preparedness Fund
  • Child Abuse Prevention Program Fun

Line 60 Reminder - Iowa Earned Income Tax Credit

This credit is 14% of the federal Earned Income Tax Credit. The Iowa EITC is refundable.

Line 61 Other Refundable Credits

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

Line 64  Taxpayers Trust Fund 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.

Line 74 Interest Rate 2014

5% per year; 0.4% per month; 0.013699% per day

OTHER NEWS

The IA1040A, Iowa Individual Income Tax Short Form, is no longer available. All Iowa individual income tax filers must use form IA1040.

DUE DATE: April 30, 2014

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, 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.

Military

  • Benefits and requirements, including information about extension of time for certain military personnel to file Iowa income tax returns

  • Reporting county and school district numbers in Step 1

  • Information on the Military Spouses Residency Relief Act

  • Information on the Servicemember Civil Relief Act
  • Members of the armed forces, armed forces military reserve and the national guard in an active duty status can exclude pay received from the federal government for military service performed.

Tax Rate Schedules(pdf)

Payment Options:

Direct Debit payment with the income tax return.

ePay (free direct debit) individual income tax estimated payments and final payment of individual income tax through the Department’s online eFile & Pay system free of charge.
Credit / debit card: Fee is charged by the third-party vendor. Our Web site has information and links.

MoneyGram: Pay with cash at MoneyGram locations.

Check / money order: Send with IA 1040V payment voucher.

Power of Attorney Form: The Federal Power of Attorney form or a Military Power of Attorney is accepted by the Iowa Department of Revenue. To be valid, the Federal or Military form must include a statement that it is applicable for Iowa purposes at the time it is executed. In the case of a previously executed Federal or Military Power
of Attorney subsequently revised to apply for Iowa purposes, it must contain a written statement that indicates it is being submitted for use with State of Iowa forms and the statement needs to be initialed by the taxpayer.

Iowa allows married taxpayers to file one Iowa Power of Attorney form on behalf of both spouses. The IRS requires separate Power of Attorney forms for each spouse. If the Federal Power of Attorney is being used for Iowa purposes by married taxpayers, both federal forms must be submitted to Iowa.

Fillable Forms
Many of the online forms on the Department Web site (http://www.iowa.gov/tax/forms/loadform.html) are fillable.  If using Adobe Reader Version 11, the form can now be saved after it is filled out.

Supporting Documentation:

  • Do not attach supporting information to the IA 1040.
  • Include all necessary supporting information, but do not staple to the return.
  • Place documents in the following order

    1. Check or Money Order
    2. Payment Voucher (1040V)
    3. W-2s/1099s
    4. IA 1040
    5. Schedules/copy of Federal return