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Additional Federal Tax Paid in 2016

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Line: 
33
Step: 
Step 7
Step Subject: 
Federal Tax Addition and Deduction
Year: 
2016

A. Additional Tax to Enter

Enter the amount of additional federal income tax paid during 2016 for tax year 2015 and any other years before 2015. The amount of additional federal income tax paid is deductible only if Iowa income tax returns were required to be filed for the year for which the additional federal income tax was paid.

Include only the actual federal tax payments made in 2016, but DO NOT include the following:

  • penalties
  • interest

Federal income tax includes the net investment income tax on federal form 8960.

Taxpayers can deduct their entire additional federal tax paid amount on line 33. However, 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

Net investment income tax from federal form 8960 is not added back on line 28.

Refundable Credits

Refundable credits on the federal 1040 may be included on IA 1040, line 33, to the extent federal income tax was paid by applying the federal refundable credits, including:

  • Earned Income Tax Credit
  • Additional Child Tax Credit

Any refundable federal credits that reduce federal income tax liability are allowed as a federal tax deduction — up to the amount of the federal tax paid by the refundable credits — on the Iowa return.

In determining the order of applying the refundable federal tax credits, the federal Earned Income Tax Credit (EITC) should be applied first, followed by the Additional Child Tax Credit, and then any other refundable federal credits.

Example:

The following example illustrates how a refundable federal Earned Income Tax Credit (EITC) on a timely-filed 2015 federal 1040 may affect line 33 of the 2016 Iowa return.

FIRST: Federal Tax Liability For Tax Year 2015

 
Taxpayer's Federal Tax Liability for Tax Year 2015: $2,000
Subtract Taxpayer's Federal Withholding: - 500
Taxpayer's Unpaid Federal Tax Liability for Tax Year 2015: 1,500

 

SECOND: Apply EITC To Unpaid Federal Income Tax Balance

Federal EITC Calculated by Taxpayer for Tax Year 2015: $ 2,500
Subtract the $1,500 Federal Income Tax the Taxpayer Still Owes for Tax Year 2015: -1,500
Taxpayer Will Receive a Federal Refund of EITC: $ 1,000

 

THIRD: Line 33 On Iowa Return For 2016

33. Additional Federal Tax Paid in 2016 for Tax Year 2015 $ 1,500
The $1,500 federal tax liability paid by EITC for Tax Year 2015 is deductible on the 2016 Iowa return.

Married Separate Filers:

The additional federal tax paid must be divided between spouses in the ratio of the spouses' Iowa net incomes for the prior years for which they paid additional federal income tax.

(Examples of how to prorate)

B. FICA Payments

FICA payments in excess of $7,347.00 for Social Security tax for each person and the fuel tax credit from the 2016 federal return can be deducted as a federal tax payment on line 33. Any excess FICA tax and federal fuel tax credit refunded to you must be added back as a federal tax refund in the year received.

If you are self-employed, any self-employment tax you pay cannot cause an excess FICA payment.

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