Business Interest Expense Conformity for Tax Year 2019 and Later

Beginning with Tax Year (TY) 2019 Iowa fully conforms with the business interest expense deduction limitations imposed by Internal Revenue Code (IRC) section 163(j). This means that for tax years beginning on or after Jan 1, 2019, the Iowa and federal business interest expense deduction amounts will generally be the same. However, some taxpayers may still need to make certain adjustments to their federal business interest expense deduction to calculate the correct Iowa deduction amount for a given year. The two most common adjustments are explained in greater detail below.