2013 Tax Information
NOTE: The United States Supreme Court decision issued on May 18, 2015, in the Comptroller of the Treasury of Maryland v. Wynne case, impacted many states, including Iowa. For Iowa purposes, the decision requires the out-of-state tax credit to be applied prior to other nonrefundable Iowa tax credits and before calculation of any school district surtax or EMS surtax. Therefore, the out-of-state tax credit calculated on form IA 130 should be entered on line 50 of the IA 1040, rather than on line 57. In addition, a credit can also now be claimed on the IA 130 for income taxes paid to local jurisdictions in other states. For additional details see The Wynne Decision.
Iowa Is Not Coupled With The Following:
- Federal 50% bonus depreciation provisions for assets acquired in 2013
- Contributions under Philippines Charitable Giving Assistance Act are not deductible on 2013 Iowa return. Contributions made in 2014 may only be deducted on the 2014 Iowa tax return.
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 the areas listed below.
For Individual Income Tax Filers Only:
- Deduction of Educator Expenses
- Tuition and Fees Deduction for Higher Education
- Election to Deduct State Sales/Use Tax as an Itemized Deduction in lieu of State Income Tax
- Treatment of mortgage insurance premiums as qualified residence interest
- Tax Free Distribution from an IRA to Certain Charities for Individuals 70½ and Older
- A capital gain deduction worksheet is available which can be included with any return claiming the Iowa capital gains deduction
- A volunteer firefighter and volunteer emergency medical services personnel tax credit of up to $50 is available
- The Iowa earned income tax credit is 14% of the federal earned income tax credit
- A taxpayers trust fund tax credit of $54 is available for each taxpayer who files a 2013 Iowa 1040 return by October 31, 2014. The credit is limited to the lesser of the amount shown on line 63 or $54.
- All taxpayers choosing to itemize deductions must complete the IA Schedule A. There is a limitation on the amount of itemized deductions that can be claimed for certain high-income taxpayers. The calculation is done on the Iowa Itemized Deductions Worksheet, form IA104.
For Individual Income Tax Filers as well as Corporate Income Tax (including S Corporations), Partnership, Fiduciary and Franchise Tax:
- 2013 section 179 limit for Iowa is $500,000, which is the same as the federal section 179 limit. The phase-out threshold is $2 million.
- A custom farming contract tax credit can be awarded to landowners who hire a beginning farmer to do custom farm work
- Federal tax includes the tax on net investment income under Section 1411(a) of the Internal Revenue Code