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e-News
March 2014 ------------------------------------------------------------------------------------------------------------------------------------------------

In This Issue

Iowa Taxpayers Trust Fund Tax Credit

Beginning with tax year 2013, a new taxpayers trust fund tax credit is available for each taxpayer who files a 2013 Iowa 1040 return by October 31, 2014. The credit is taken on line 64 of the IA 1040 and is limited to the lesser of the amount shown on line 63 of the IA 1040 or $54.  

This credit is available to all individual income tax filers. Taxpayers who file a joint return or married filing separately on a combined return may claim the credit for each spouse.  Taxpayers choosing the filing status of married filing separately on this combined return will look to each spouse’s separate tax on line 63 to separately determine each spouse’s credit.  Taxpayers choosing the filing status of married filing a joint return will look to the joint tax figure on line 63 to determine the total credit which is the lesser of line 63 or $108.  Each taxpayer may qualify for the credit; however, the credit on the taxpayer’s IA 1040 is not based on the number of dependents.  The credit is available to qualifying residents, nonresidents, and part-year residents.  The credit will increase your refund or decrease the amount of tax you owe, but there is no carry forward of any excess credit that is unused.

If you have filed your 2013 Iowa income tax return and failed to claim the taxpayers trust fund tax credit, the Department will determine the correct amount of credit when processing your return.  Please do not amend your 2013 Iowa income tax return if the only error was failure to calculate the new credit.  Please wait until your return has processed to determine if the credit has not resulted in an adjustment of your calculated refund or tax due.

Protect Yourself from Identity Theft

Did you receive a phone call, e-mail or letter about your Iowa taxes? How do you know if the communication you received is official and from the Iowa Department of Revenue?

  • The Iowa Department of Revenue will always identify itself.
  • You will NEVER be asked to provide your full Social Security Number by e-mail or regular mail.
  • The Department does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels

If you are unsure the communication you received is official, follow these simple steps:

1. Do not provide any personal or confidential information.

2. Contact us directly at 515-281-3114 and we will confirm whether the communication you received was from the Iowa Department of Revenue.  


IA 1040A and IA 1120A Short Forms Discontinued for 2013

The short forms for Iowa individual income tax (IA 1040A) and Iowa corporation income tax (IA 1120A) were discontinued as of tax year 2013. Taxpayers who may have used these forms in the past will need to use the IA 1040 or IA 1120 beginning in tax year 2013.

This step is being taken due to declining use of the short forms, as well as to allow more taxpayers to file electronically. Iowa short forms weren’t eligible for electronic filing. It is estimated that 97% of current IA 1040A users can eFile for free.

While the IA 1040 and IA 1120 have more lines and schedules than the short forms, taxpayers who were eligible to file a short form in the past will have no need to use most of those additional lines / schedules. Therefore, filing should still be relatively easy.  

Itemized Deductions - Use Iowa Schedule A for 2013

The option to substitute the Federal Schedule A for individuals who itemize deductions on their Iowa returns is not available for tax year 2013. All taxpayers who itemize deductions on the Iowa return must use the Iowa Schedule A beginning with 2013.

Previously, taxpayers who used the Federal Schedule A for Iowa purposes may have been required to make adjustments to the amounts on the federal schedule. It is believed the use of Iowa’s Schedule A for all taxpayers will reduce the possibility of errors connected with those adjustments. In addition, the Iowa Schedule A includes lines for a proration calculation for married taxpayers using filing status 3 or 4. Lines for that calculation are not part of the Federal Schedule A.  

Volunteer Firefighter & EMS Personnel Tax Credit

The Iowa Department of Revenue has added a webpage regarding the new Volunteer Firefighter and EMS Personnel Tax Credit. That page is found at http://www.iowa.gov/tax/educate/Firefighter_EMS_Credit.html.  The tax credit is available beginning in tax year 2013.

Iowa Farm to Food Donation Tax Credit

The Iowa Department of Revenue has added a webpage committed to the new Iowa Farm to Food Donation Tax Credit found at http://www.iowa.gov/tax/taxlaw/farmtofood.html. The tax credit is available beginning in tax year 2014. This credit encourages food producers to donate food commodities to food banks and emergency feeding organizations.  The website provides information as well as interactivity for individuals and organizations interested in the Farm to Food Donation Tax Credit Program.

Statute of Limitations is three years for refunds on income tax returns

If you have a refund coming, you must file your original or amended return within three years of the due date. After that time, no refund will be granted. However, you may still be required by law to file.

So for a 2010 individual income tax return originally filed by the April 30, 2011 due date, an amended return requesting a refund must be filed by April 30, 2014 for the refund to be issued.

Internal Revenue Code (IRC) Coupling

Effective with the enactment of Senate File 106 on February 14, 2013, Iowa tax provisions are coupled with federal provisions for the 2013 tax year in most areas. Iowa did not couple with the federal 50% bonus depreciation provisions for assets acquired in 2013. See for additional details: http://iowa.gov/tax/educate/TY2013Changes.html

Iowa Department of Revenue Launches Facebook Site

New this year – join us on Facebook!  Like us, and share tax news and information with others.  https://www.facebook.com/iowadepartmentofrevenue

Income Tax Return Extensions and Payment Plans

Automatic Extension of Time to File Income Tax Returns
Iowa does not have an application to extend the time to file your income tax return. In addition, we do not accept a federal extension.

Instead, if you have paid at least 90 percent of the tax you owe by the due date of your return, you automatically have an additional six months to file your return and pay the additional tax due with no penalty. Interest continues to accrue on unpaid tax during the extension period.

If you need to make a payment to meet the 90 percent requirement, it must be paid or postmarked by April 30 for calendar year filers. You can make your payment electronically through our eFile & Pay system or by mail using form 41-137 (pdf) for individuals, or form 42-019 (pdf) for corporations.

Payment Plans
Iowa does not have a payment plan option for tax shown due on the return. Pay as much as you can, and you will be billed for the balance due. Payment plans can be established only after a bill has been issued and has gone to our collections section for action.

Even if you cannot pay the amount due, file the return on time anyway. Filing the return by the due date will reduce any late payment penalty from 10 percent to 5 percent.

2014 Webinar Schedule Coming Soon

The Iowa Department of Revenue has partnered with MyEntre.Net to provide tax Webinars to small business owners on IASourceLink.

Please watch our Online Training page for details.


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