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Deduction

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Line: 
37
Step: 
Step 8
Step Subject: 
Taxable Income
Year: 
2016

You may itemize deductions or claim the Iowa standard deduction. You may itemize deductions on your Iowa return even if you did not itemize deductions on your federal return.

Standard Deduction

If you use the Iowa standard deduction check the standard box on line 37 and enter your standard deduction.

  • $1,970 for filing statuses 1, 3, and 4
  • $4,860 for filing statuses 2, 5, and 6

Itemized Deduction

If you itemize, complete the Iowa Schedule A, check the itemized box on line 37 and enter your total itemized deduction. Include your Iowa Schedule A with your return. The federal Schedule A cannot be used with the Iowa return. 

General Instructions

Medical, Dental, and Insurance Expenses

Other State and Local Income Taxes

Vehicle Registration Fee Deduction

Qualified Mortgage Insurance Premiums (not currently available for 2016)

Job Expenses and Misc. Deductions

IA Schedule A Line 26

Other Deductions

Married Filing Separately for Iowa

State Sales / Use Tax (not currently available for 2016)

Exceptions to Federal Schedule A:

General Instructions

Iowa follows federal guidelines for Schedule A itemized deductions with certain exceptions.

To complete the Iowa Schedule A (pdf), refer to the federal 1040 instruction booklet.

Medical, Dental, and Insurance Expenses

Health insurance premiums, line 1:

100% of the amount paid for health insurance premiums is deductible on line 18 of the IA 1040. It may be to your advantage to take this deduction on line 18 instead of the Iowa Schedule A. If health insurance premiums were used as a deduction on line 18, they cannot be used on the Iowa Schedule A.

The Iowa 1040 departs from the federal 1040 in the treatment of health insurance premiums by allowing taxpayers to elect to deduct qualifying health insurance premiums as an adjustment to Iowa gross income.  The Iowa return allows a deduction for health insurance premiums on line 18 of the IA 1040, rather than reporting those same premiums as a medical expense deduction on the Iowa Schedule A for Iowa Itemized Deductions. 

If the deduction is taken on the Iowa Schedule A, then the federal tax guidance should be followed when addressing the complications due to the impact of the federal excess advance premium tax credit repayment and the net premium tax credit.

However, if the deduction is taken on line 18 of the IA 1040, then the IA 1040, rather than the Iowa Schedule A, must reflect the impact of the federal excess advance premium tax credit repayment and the net premium tax credit.  The Iowa expanded instructions for lines 14 and 18 of the IA 1040 set forth the Department’s guidance for the correct reporting of these amounts.  

Schedule A, line 2:

Certain itemized deductions are allowed only to the extent that the deductions exceed a percentage of federal adjusted gross income. These include medical and dental expenses that exceed 10% (or 7.5% if taxpayer or spouse is 65 or older) of federal adjusted gross income. The federal adjusted gross income used to determine these deductions is the taxpayer's federal adjusted gross income plus any bonus depreciation / section 179 adjustment from line 14 of the IA 1040.

Other State and Local Income Taxes

Iowa state income tax is not deductible on the Iowa return. The School District Surtax and the Emergency Medical Services Surtax are deductible on the Iowa return.

State Sales / Use Tax

Not currently available for 2016.

Vehicle Registration Fee Deduction and Worksheet

If you itemize deductions, a portion of the automobile or multipurpose vehicle annual registration fee you paid in 2016 may be deducted as personal property tax on your Iowa Schedule A, line 6, and federal Schedule A, line 8.

This deduction is for annual registration fees paid based on the value of qualifying automobiles and multipurpose vehicles. Multipurpose vehicles are defined as motor vehicles designed to carry not more than 10 people, and constructed either on a truck chassis or with special features for occasional off-road operation [Iowa Code section 321.1(44)].

Annual registration fees on the following vehicles are not deductible: pickups (model year 2009 or older), motor trucks, work vans, ambulances, hearses, non-passenger-carrying vans, campers, motorcycles, or motor bikes.

This deduction applies only to the annual vehicle registration fee.  It does not apply to the 5% one-time registration fee/fee for new registration that is imposed on the initial registration of a vehicle.  That 5% fee is only deductible on the Iowa Schedule A if Iowa adopts the federal provision for deducting state sales and use tax paid and if the taxpayer claimed an itemized deduction for state sales and use tax paid on the Federal return.   

Newer Vehicles:

Use the following worksheet to calculate the deductible amount of annual registration fees paid in 2016 for qualifying automobiles and multipurpose vehicles (model year 2006 or newer), and for pickups (model year 2010 or newer).*

* For tax years 2008 and earlier, pickup truck registration fees could not be taken as an itemized deduction, because the fees were structured as a flat fee and were not based on value. However, beginning with the 2009 tax year, there was a change in the registration fee structure for pickups.

More specifically, only model year 2010 and newer trucks that weigh in at 10,000 pounds or less when empty are registered based on weight, list price, and model year. All other trucks are still subject to a registration fee based on weight. Consequently, certain 2010 model year and newer trucks may use the Vehicle Registration Deduction Worksheet.

1. Enter the actual annual registration fee paid. 1.  
2. Take the weight of your automobile and divide it by 250. The weight is found on your automobile registration certificate. 2.  
3. Subtract line 2 from line 1. This is the deductible amount for line 37. 3.  


Example

Malia purchased an automobile from Jennifer.
The actual fee Malia paid to register the automobile at the courthouse was $150.
The weight of the automobile is 3,000 pounds.
The deductible amount is calculated as follows:

1. Enter the actual annual registration fee paid. 1. 150
2. Take the weight of your automobile and divide it by 250. The weight is found on your automobile registration certificate. 2. 12
3. Subtract line 2 from line 1. This is the deductible amount. 3. 138

Older Vehicles:

For qualifying automobiles and multipurpose vehicles (model year 2005 or older) the deductible amount is 60% of the annual registration fees paid in 2016.

Qualified Mortgage Insurance Premiums

Not currently available for 2016.

Job Expenses and Miscellaneous Deductions

Certain job expenses and miscellaneous deductions are allowed to the extent the deductions are greater than 2% of the taxpayer's federal adjusted gross income.

The federal adjusted gross income used to determine these deductions is the taxpayer's federal adjusted gross income plus any bonus depreciation / section 179 adjustment from line 14 of the IA 1040.

Iowa Schedule A Line 26

The federal adjusted gross income used to determine who must complete the Iowa Itemized Deductions Worksheet (IA 104) is the taxpayer's federal adjusted gross income plus any bonus depreciation / section 179 adjustment from line 14 of the IA 1040.

Other Deductions

Enter the total of all other deductions on line 27 of the Iowa Schedule A.

a. Expenses Incurred for Care of a Disabled Relative

Expenses, not to exceed $5,000, incurred in caring for a disabled relative in your home may be deducted.

Disabled Relative Qualifications

The expenses which may be claimed are those for the care of a person who is your grandchild, child, parent, or grandparent.

The disabled person must be unable, by reason of physical or mental disability, to live independently and must be receiving or be eligible to receive medical assistance benefits under Title XIX of the U.S. Social Security Act.

A statement from a qualified physician certifying that the person with the disability is unable to live independently must be submitted with the return the first year a deduction is taken and every third year thereafter.

Qualifying Items

Qualifying items are those that are not reimbursed. Items may include food, clothing, medical expenses not otherwise deductible, and transportation for medical reasons. See IRS guidelines for medical mileage rate.

An itemized schedule of expenses must be included with the return.

Non-Qualifying Items

Expenses not directly attributable to the care of the relative, such as rent, mortgage payments, interest, utilities, house insurance, and taxes cannot be included.

Married Separate Filers: The total deduction claimed by both spouses for each relative with a disability may not exceed $5,000.

b. Adoption Expenses

You may be eligible to deduct a portion of the adoption expenses you paid in 2016 if you incurred adoption expenses during the tax year, even if the child is not placed in Iowa.

Expenses include medical costs relating to the child's birth, any necessary fees, and all other costs connected with the adoption procedure.  Include a separate schedule listing the adoption expenses.

This deduction is taken in the year that the expenses are paid even if the child is not placed in your home during that year or if the adoption does not occur.

For tax years beginning on or after 1/1/14, there is also an Adoption Tax Credit of up to $2,500 for unreimbursed adoption expenses that can be calculated on the IA 177 and taken on line 62 of the IA 1040 for a child placed in Iowa. Qualifying adoption expenses exceeding 3% of total Iowa net income, less any Adoption Tax Credit claimed, are eligible for deduction. Subtract 3% of your total Iowa net income (and your spouse’s, if married) entered on line 26 from the total of qualifying adoption expense, less any Adoption Tax Credit claimed on IA 1040 Line 62. Enter the result on IA 1040 Schedule A, Line 27.

Example:  Taxpayer has Iowa net income of $100,000 and adoption expenses of $6,000. The taxpayer is eligible for an Adoption Tax Credit on line 62 of $2,500.

            $100,000 (net income) x 3% = $3,000 (expenses not eligible for deduction)

            $6,000 (total adoption expenses) - $2,500 (credit amount) = $3,500 (expenses remaining for possible deduction)

            $3,500 (expenses remaining for possible deduction) - $3,000 (expenses not eligible for deduction) = $500 (deduction allowed on line 27 of IA Sch. A)

c. Mileage Deduction Charitable Purposes

Iowa allows an additional deduction for automobile mileage driven for charitable organizations. Calculate the deduction as follows:

  1. Number of miles x 39¢ / mile
  2. Less charitable mileage deduction already claimed on the Iowa Schedule A
  3. Equals additional mileage deduction for charitable purposes

This information is based on 422.9(2)(d) and 8A.363.

Exceptions to Federal Schedule A

Health Insurance Premiums

100% of the amount paid for health insurance premiums is deductible on line 18 of the IA 1040. It may be to your advantage to take this deduction on line 18 instead of Schedule A. Schedule A may not contain any health insurance premiums which were used as a deduction on line 18.

Injured Veterans Grant Program Contributions

These contributions do not qualify as itemized deductions.

Charitable Conservation Contribution Tax Credit Contributions

Do not include as an itemized deduction any contributions for which a credit is claimed on line 52 of the IA 1040.

Mortgage Interest Credit Deduction

Taxpayers with the mortgage interest credit can claim on their Iowa return a deduction on line 9b of Schedule A for all mortgage interest paid in the tax year and not just the mortgage interest that was deducted on the federal Schedule A.

School Tuition Organization Tax Credit Contributions

Do not include as an itemized deduction any contributions for which a credit is claimed on line 52 of the IA 1040.

Endow Iowa Tax Credit Contributions

Do not include as an itemized deduction any contributions for which a credit is claimed on line 52 of the IA 1040.

Farm to Food Donation Tax Credit Contributions

Do not include as an itemized deduction any contributions for which a credit is claimed on line 52 of the IA 1040.

Married Separate Filers:

If one spouse uses the itemized deduction, then both spouses must use the itemized deduction, even if separate Iowa returns are filed.

Itemized deductions must be divided between spouses in the ratio of their respective net incomes.

(Examples of how to prorate)

Go to Line 36

Go to Line 38