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33. ADDITIONAL FEDERAL TAX PAID IN 2009.

A. Enter the amount of additional federal income tax paid during 2009 for tax year 2008 and any other years before 2008. 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 2009, but DO NOT include the following:

  • 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 by applying the federal refundable credits, such as:

  • Earned Income Tax Credit
  • Additional Child Tax Credit
  • Others (do not include the amount of any Recovery Rebate Credit)

Any refundable federal credits (except the Recovery Rebate Credit) 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 Tax Credit (EITC) 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 Tax Credit (EITC) on a timely-filed 2008 federal 1040 may affect line 33 of the 2009 Iowa return.

FIRST: Federal Tax Liability For Tax Year 2008
Taxpayer's Federal Tax Liability for Tax Year 2008:
$ 2,000
Subtract Taxpayer's Federal Withholding:
— 500
 
Taxpayer's Unpaid Federal Tax Liability for Tax Year 2008:
1,500

SECOND: Apply EITC To Unpaid Federal Income Tax Balance
Federal EITC Calculated by Taxpayer for Tax Year 2008:
$ 2,500
Subtract the $1,500 Federal in Federal Income Tax the Taxpayer Still Owes for Tax Year 2008:
— 1,500
 
Taxpayer Will Receive a Federal Refund of EITC:
$ 1,000

THIRD: Line 33 On Iowa Return For 2009
33. Additional federal tax paid in 2009 for Tax Year 2008
$ 1,500
The $1,500 federal tax liability paid by EITC for Tax Year 2008
is deductible on the 2009 Iowa return.

Married Separate Filers: The additional federal tax paid must be divided between 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 $6,621.60 for Social Security tax for each person and the Motor Fuel Tax Credit from the 2009 federal return 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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