Subtract the amount on line 46 from the amount on line 42. If less than zero, enter zero.
Why Use the Tax Reduction Worksheet
Taxpayers using filing status 1, Single, and not claimed as a dependent on another person's Iowa return may owe less tax by using this worksheet.
Taxpayers using filing status 1 are not eligible to use the alternate tax computation. However, a single taxpayer who is not claimed as a dependent on another person’s Iowa return cannot have a tax amount on the IA 1040, line 47 that would reduce the combination of net income from line 26 plus any pension exclusion from the IA 1040, line 21, any reportable Social Security benefits on line 11 of the Social Security Worksheet, and any lump-sum distribution income subject to tax on federal form 4972 to less than $9,000 ($24,000 if you are 65 or older as of 12/31/22).
If subtracting line 47 from the total of lines 21, 26, reportable Social Security benefits, and any lump-sum distribution income subject to tax on federal form 4972 results in a difference of less than $9,000 ($24,000 if you are 65 or older as of 12/31/22), the entry on line 47 must be reduced as calculated on the worksheet below.
The carryover of a net operating loss claimed on the IA 1040 must be added back to net income, line 26.
Tax Reduction Worksheet
| 1. Enter: (a) Net income from IA 1040, line 26 (b) Pension exclusion from IA 1040, line 21 (c) Reportable Social Security benefits (IA 1040, Step 4) (d) Lump Sum Tax distributions of taxable income reported on federal form 4972 line 8 Total. Add 1a, 1b, 1c, and 1d |
1. |
| 2. Enter $9,000 on this line if you are 64 or younger OR $24,000 if you were 65 or older as of 12/31/22 | 2. |
| 3. Subtract line 2 from line 1 | 3. |
| 4. Enter the amount from IA 1040, line 47 | 4. |
| 5. Compare lines 3 and 4. Enter the smaller number here. If this number is different from the one on IA 1040, line 47, substitute this number. Write “tax reduction” to the left of line 47 | 5. |
Example
John has no pension income, reportable Social Security benefits, or lump-sum distribution income subject to tax on federal form 4972. Tax from line 47 is $120.
| 1. Enter: (a) Net income from IA 1040, line 26: $9,050. (b) Pension exclusion from IA 1040, line 21: N/A (c) Reportable Social Security benefits (IA 1040, Step 4): N/A (d) Lump Sum Tax distributions of taxable income reported on federal form 4972 line 8: N/A Total. Add 1a, 1b, 1c, and 1d |
$9,050 |
| 2. Write $9,000 on this line if you are 64 or younger OR $24,000 if you are 65 or older as of 12/31/21. | $-9,000 |
| 3. Subtract line 2 from line 1. | $50 |
| 4. Enter the amount from IA 1040, line 47. | $120 |
| 5. Compare lines 3 and 4. Enter the smaller number here. If this number is different from the one on IA 1040, line 47, substitute this number. Write "tax reduction" to the left of line 47. | $50 |
View the Tax Reduction Worksheet as a pdf