2015 Tax Year Information
NOTE: Iowa did not couple with the bonus depreciation provisions allowed for federal tax purposes for the 2015 tax year.
For Individual Income Tax Filers Only:
- While social security benefits are not subject to Iowa income tax, the reportable Social Security benefit amount is included in the alternate tax calculation worksheet and the tax reduction worksheet, as well as the calculation of whether sufficient income was earned in order to file an Iowa return. See the Social Security Worksheet under Step 4 of the IA 1040 instruction booklet.
- Military retirement pay is not included on line 9 since it is not subject to Iowa income tax.
- The following are allowed on Iowa returns:
- 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 70 ½ and older
- Taxpayers claiming adoption expenses on line 27 of the Iowa Schedule A must exclude those expenses eligible for the Iowa adoption tax credit in calculating the deduction.
- The IA100 capital gain deduction form, which is available on the Department’s website under “individual income tax forms,” must be included with any return claiming the Iowa capital gain deduction.
- College Savings Iowa or Iowa Advisor 529 Plan: The deductible amount for tax year 2015 cannot exceed $3,163 per beneficiary. Beginning with tax year 2015, individuals making a contribution on or before the Iowa income tax return filing deadline (April 30 for calendar year tax filers), excluding extensions, can elect to have that contribution treated as though it was made on the last day of the preceding calendar year, which allows them to claim the income tax deduction for the most recently completed tax year. Prior to tax year 2015, contributions had to be made during the calendar year in order to be deductible on the Iowa return for that year.
- Federal income tax includes the net investment income tax on Federal Form 8960 and additional Medicare tax withholding from line 24 of Federal Form 8959. Taxpayers can deduct their entire withholding, estimated payment, and additional federal tax paid amounts on lines 31, 32, and 33, but certain amounts must be added back on line 28, including the following:
- Excess advance premium tax credit repayment reported on line 46 of the federal 1040
- Federal self-employment tax reported on line 57 of the federal 1040
- Unreported Social Security and Medicare tax on line 58 of the federal 1040
- Additional tax on IRAs and other qualified retirement plans reported on line 59 of the federal 1040
- Federal household employment tax reported on line 60a of the federal 1040
- First-time homebuyer credit repayment reported on line 60b of the federal 1040
- Individual responsibility payment reported on line 61 of the federal 1040
- Additional Medicare tax from federal form 8959 reported on line 62a of the federal 1040
- Other additional federal taxes reported on line 62c of the federal 1040
- Out-of-State Tax Credit: 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 will be entered on line 50 of the IA 1040. 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.
For Individual Income Tax Filers as well as Corporation Income Tax (including S corporations), Partnership and Fiduciary Income tax:
- Bonus Depreciation: Iowa is not coupled with federal bonus depreciation for assets acquired in 2015.
- The section 179 limit for Iowa for the 2015 tax year is $500,000, which is the same as the federal section 179 limit. The phase-out threshold is $2 million. Iowa has not coupled with federal section 179 amounts for tax years after 2015.