STEP 6 FEDERAL TAX ADDITION
27. FEDERAL INCOME TAX REFUND RECEIVED
If you received a refund of Federal income
tax during 2002, you must report the amount on this line. It must be reported
even if you used the standard deduction on the prior years Iowa return.
The Federal refund must be included on this line because you benefit from
being able to deduct Federal taxes paid on the prior year's Iowa return which
reduces your Iowa taxable income. Include the refund you received from your
2001 Federal tax return and any refunds received in 2002 for other years that
were amended or filed late.
To find the amount of your Federal refund,
contact the IRS at 1-800-829-1040. This information is not available from
the Iowa Department of Revenue and Finance.
If you chose to have any part of an overpayment
of Federal income tax credited to estimated tax payments for 2002, the
amount should be claimed as 2002 estimated tax paid on line
32. The total Federal overpayment must also be reported on line 27.
A refund of Federal tax received in 2002
is not reported if the tax was not deducted from Iowa income in a prior
year. Some examples of instances in which you do not report a Federal refund
a. You are filing an Iowa return
for 2002 for the first time because you moved into Iowa during the year.
b. 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.
c. Any part of the Federal refund due to the Federal Rate Reduction
Credit, Earned Income Credit or the Additional Child Tax Credit is not reportable
and should be subtracted from the total refund before entering the refund
amount on line 27.
d. You were a nonresident for the tax year of the refund and were
not required to file an Iowa return that tax year.
MARRIED SEPARATE FILERS: If the
refund received in 2002 was from a jointly filed Federal return, it must
be divided between the spouses in the ratio of the spouses net incomes
in the year for which the refund was issued. Example: A 2001 Federal refund
received in 2002 would be prorated using the spouses net incomes
from the 2001 Iowa return.
of how to prorate)
Example of how to prorate:
Wifes income is $10,500
Husbands income is $15,500
Federal refund: $1,200
Divide wifes income by total income:
$10,500 divided by $26,000 = 40%
The husbands income is, therefore, 60% of their combined income.
In this example, line 27 is $720 (60%)
of the Federal refund for the husband, and $480 (40%) of the Federal refund
for the wife.
Go to Line 26
Go to Line 28