33. ADDITIONAL FEDERAL TAX PAID IN 2005.

A. Enter the amount of additional Federal income tax paid during 2005 for tax year 2004 and any other years before 2004. The amount of additional Federal income tax paid is deductible only if Iowa income tax returns were required to be filed for the year for which the additional Federal income tax was paid. Include only the actual Federal tax payments made in 2005, but DO NOT include penalties and interest.

DO NOT include

• penalties
• interest
• excise tax on early withdrawal of qualified plans

REFUNDABLE CREDITS on the Federal 1040 may be included on
IA 1040, line 33, to the extent Federal income tax was paid with the Federal refundable credits, such as:

• earned income credit
• additional child tax credit
• others

Any refundable Federal credits that reduce Federal income tax liability are allowed as a Federal tax deduction — up to the amount of the Federal tax paid by the refundable credits — on the Iowa return.

In determining the order of applying the refundable Federal tax credits, the Federal Earned Income Credit (EIC) should be applied first, followed by the additional child tax credit, and then any other refundable Federal credits.

EXAMPLE:

The following example illustrates how a refundable Federal Earned Income Credit (EIC) on a timely-filed 2004 Federal 1040 may affect line 33 of the 2005 Iowa return.

FIRST: FEDERAL TAX LIABILITY FOR TAX YEAR 2003
Taxpayer's Federal Tax Liability for Tax Year 2004:	$ 2,000
Subtract Taxpayer's Federal Withholding:	— 500
Taxpayer's Unpaid Federal Tax Liability for Tax Year 2004:	1,500
SECOND: APPLY EIC TO UNPAID FEDERAL INCOME TAX BALANCE
Federal EIC Calculated by Taxpayer for Tax Year 2004:	$ 2,500
Subtract the $1,500 in Federal Income Tax the Taxpayer Still Owes for Tax Year 2004:	— 1,500
Taxpayer Will Receive a Federal Refund of EIC:	$ 1,000
THIRD: LINE 33 ON IOWA RETURN FOR 2004
33. Additional Federal tax paid in 2005 for Tax Year 2004	$ 1,500
The $1,500 tax liability paid by EIC for Tax Year 2004 is deductible on the 2005 Iowa return.

Married Separate Filers: The additional Federal tax paid must be divided between the spouses in the ratio of the spouses’ Iowa net incomes for the prior years for which they paid additional Federal income tax. (Examples of how to prorate)

B. FICA payments in excess of $5,580.00 for Social Security tax for each person and Federal fuel tax credit can be deducted as a Federal tax payment on line 33. Any excess FICA tax and Federal fuel tax refunded to you must be added back as a Federal tax refund in the year received. If you are self-employed, any self-employment tax you pay cannot cause an excess FICA payment.

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Go to Line 34