Taxpayers can deduct their entire withholding, estimated payment, and additional federal tax paid amounts on line 31. However, certain amounts must be added back on line 28, including the following:
- Excess advance premium tax credit repayment reported on the federal 1040, Schedule 2, line 2
- Federal self-employment tax reported on the federal 1040, Schedule 2, line 4
- Total additional Social Security and Medicare tax reported on the federal 1040, Schedule 2, line 7
- Additional tax on IRAs or other tax-favored accounts reported on the federal 1040, Schedule 2, line 8
- Federal household employment taxes reported on the federal 1040, Schedule 2, line 9
- Repayment of first-time homebuyer credit reported on the federal 1040, Schedule 2, line 10
- Additional Medicare tax from federal form 8959 reported on the federal 1040, Schedule 2, line 11
- Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance from Form W-2, box 12, reported on the federal 1040, Schedule 2, line 13
- Interest on tax due on installment income from the sale of certain residential lots and timeshares reported on the federal 1040, Schedule 2, line 14
- Interest on the deferred tax on gain from certain installment sales with a sales price over $150,000 reported on the federal 1040, Schedule 2, line 15
- Recapture of low-income housing credit reported on the federal 1040, Schedule 2, line 16
- Other additional federal taxes reported on the federal 1040, Schedule 2, line 18
Additional Medicare tax withholding from line 24 of federal form 8959, net investment income tax from federal form 8960, and federal section 965 net tax liability payments are not added back on line 28.
If a taxpayer has elected to pay federal section 965 net tax liability in installments for federal purposes, that taxpayer may only include the actual amount of the federal installment payment paid in 2022 in calculating the Iowa deduction for 2022.
It is acceptable to report on line 28 either the current year’s self-employment / household employment tax / other federal taxes or the prior year’s, as long as the reporting method is consistent from one year to the next.
Married Separate Filers:
Federal taxes attributable to a specific spouse are claimed by that spouse. For example, each spouse must claim their own federal self-employment tax. Federal taxes not attributable to any one spouse must be prorated between the spouses based on the net income of the year for which they are paying the federal tax. For example, the household employment taxes are divided between spouses in the ratio of their respective net incomes. (Examples of how to prorate)