New for 2007:
The Iowa Earned Income Tax Credit is now
a refundable credit.
This credit is only available to taxpayers who qualify for the Federal
Earned Income Tax Credit (EITC).
To find out if you qualify for Federal EITC, see the IRS
EITC information or call the IRS at 1-800-829-1040.
To calculate the Iowa Earned Income Tax Credit, multiply your Federal
EITC by .07 (7.0%).
If you qualify for the low income exemption as explained in the instructions for line 26, and are filing an Iowa return only to claim a refund of the Earned Income Tax Credit, enter the words “low income exemption” in the area to the left of your net income figure on line 26. Enter zero on line 59. Enter the amount of your Iowa Earned Income Tax Credit on lines 65, 67, 68, 69, and 70.
NONRESIDENTS AND PART-YEAR RESIDENTS: The Iowa Earned Income Credit
must be adjusted using the following formula:
|Iowa net income (line 26, IA 126)
All-source net income of you and spouse
(line 26, IA 1040)
||Iowa Earned Income Credit
||credit on line 65