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48. IOWA EARNED INCOME CREDIT.

The Iowa Earned Income Credit reduces the Iowa tax due, but it cannot be refunded.

This credit is only available to taxpayers who qualify for the Federal Earned Income Credit (EIC).

To calculate the Iowa Earned Income Credit, multiply the Federal EIC by .065 (6.5%).

You may wish to review the instructions for the Federal 1040 or 1040A to determine if you are eligible to claim the Federal EIC. For additional Federal information, contact the IRS at 1-800-829-1040.

MARRIED SEPARATE FILERS: The Iowa Earned Income Credit 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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