Processing IA 1139 Refund Claims
If the refund claim is not complete, we request the missing information in writing. Interest will not start until all the required information is received. In most cases, a copy of the federal 1139 is required.
A federal 1139 is not applicable in some cases. If Iowa deductions create the loss, the federal 1139 is not required, and interest accrues from the date the claim was mailed.
If the consolidated group for a company with filing status 2 or 3 has taxable income, send a copy of pages 1 through 4 of the consolidated return with the IA 1139.
We do not require information verifying the IRS accepted or adjusted the federal 1139 to be attached to the IA 1139. We will request this on a case-by-case basis.
If you have questions, please contact the Department by e-mail.
Federal Domestic Production Activities Deduction
Beginning with tax year 2005, the federal domestic production activities deduction under federal section 199 is generally not allowed when computing any corporation net operating loss carryback on the claim for refund for IA 1139. The domestic production activities deduction should be added back in total in the carryback years when the net operating loss eliminates the entire net income in the carryback year.
If the net operating loss does not eliminate the entire net income in the carryback year, then the domestic production activities deduction must be adjusted proportionately. For example, if the net operating loss reduces the net income in the carryback year by 40 percent, then 40 percent of the domestic production activities deduction must be added back.
December 18, 2008