Electronic Filing Requirement for Businesses, Trusts, and Estates

The following are the thresholds for determining whether a taxpayer is subject to the electronic filing requirement. Impacted returns that are not properly eFiled will be invalid. Taxpayers who meet any of these thresholds and still file paper returns will be treated as nonfilers. Such taxpayers may incur late-file and other penalties, and the statute of limitations for the Department to review the return and assess tax will not begin to run until the taxpayer files the required electronic return(s).

All income and franchise taxpayers (IA 1120, IA 1065, IA 1120S, IA 1120F, IA 1041)

• Gross receipts $250,000+
• Iowa tax credits reported on the return $25,000+

Pass throughs (IA 1065, IA 1120S, IA 1041)

• Required to issue 10+ Iowa K-1s 

Consolidated Iowa return (IA 1120, status 3)

• Always required

Moneys and Credits

• Always required

Requests for Exceptions

Exceptions to the electronic filing requirement may be granted for good cause.

• Good cause includes:
• Religious objections
• Act of God or casualty
• MeF portal permanently closed for the tax year
• Good cause does not include:
• Inadequate tax preparation software (i.e. software that does not support all forms necessary to file a complete return)

Taxpayers may request exceptions by submitting the Electronic Filing Requirement Exception Request (78-641) before the return is filed. Do not include the request with your return. Requests must be submitted by:

Email: idrcorptax@iowa.gov
Mail: Iowa Department of Revenue, PO Box 10465, Des Moines, IA 50306-0465
Fax: 515-281-0763

The Department will notify the taxpayer in writing of whether their request for exception has been approved or denied. Requests will be deemed accepted if the Department does not respond within 90 days of receipt of the taxpayer’s request for exception.

Temporary Transition Relief

If a return subject to the electronic filing requirement is improperly filed on paper, the Department will send the taxpayer a letter instructing them to file a proper electronic return within 30 days. If the taxpayer files a proper electronic return within that time, the Department will deem the original paper-filed return a valid return.
This relief only applies to tax years ending on or before 12/31/23
A taxpayer may only benefit from this relief for one return

More detailed information may be found in Iowa Administrative Code rule 701—8.7 

On February 17, 2023 Iowa Department of Revenue Director Kraig Paulsen signed Order 2023-01 offering limited relief from the requirement that certain business entities file their Iowa income, franchise, and composite tax returns in an electronic format.

The Order provides electronic filing relief for “qualified filers”, which are taxpayers who meet all of the following criteria:

• The taxpayer is required to file an IA 1065, IA 1120, IA 1120S, IA 1120F, or IA PTE-C return with an original due date in calendar year 2023,
• The taxpayer is subject to the electronic filing requirement for that return as described in Iowa Administrative Code rule 701—8.7,
• The taxpayer’s commercial tax preparation software does not support electronic filing of one or more forms required by the taxpayer to file a complete and proper Iowa return as of the date the taxpayer completes that return,
• Before filing that tax return, the taxpayer submits an Electronic Filing Exception Request form (78-641).
• When completing the Exception Request form, the taxpayer must:
• Select “other” as the reason for the exception, write “Order 2023-01” in the space provided.
• List their tax preparation software provider and the required form or forms their software did not support at the time that return was completed.
• Submit the form as directed in the instructions. Exception Request forms submitted in the same envelope as the paper return will not be accepted.
• The taxpayer files that Iowa return on or before the original due date not including extensions.

Electronic Filing Exception Request forms (78-641) that are received or postmarked on the same day as the qualifying filer’s return will be considered submitted “before” the return as required by Iowa Administrative Code rule 701—8.7(5)(a)(2).