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48. IOWA EARNED INCOME CREDIT.

The Iowa Earned Income Credit is not a refund; it reduces the Iowa tax due.

This credit is available to taxpayers who qualify for the Federal Earned Income Credit. To claim the Iowa Earned Income Credit, enter 6.5% of the Federal Earned Income Credit that you claimed on your Federal return.

To calculate the Iowa EIC, multiply the Federal EIC by .065.

If you did not file a Federal income tax return, you may wish to review the instructions for the Federal 1040 or 1040A to determine if you are eligible to claim the Federal Earned Income Credit. For additional Federal information, contact the IRS at 1-800-829-1040.

MARRIED SEPARATE FILERS: The Iowa Earned Income Credit for dependents must be divided between husband and wife in the ratio of each spouse’s earned income to the total earned income of both spouses. Earned income includes wages, salaries, tips or other compensation and net earnings from self-employment. Any unused part of this credit cannot be used by the other spouse.

(Examples of how to prorate)

 

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