On June 8, 2021, Governor Kim Reynolds signed 2021 Iowa Acts, Senate File 608. Division II of that legislation made extensive changes to Iowa’s composite return and nonresident withholding requirements for pass-through entities and their nonresident members. These changes apply to tax years beginning on or after January 1, 2022 (“tax year 2022”). This guidance describes those changes. The Department has released a new 2022 IA PTE-C Composite Return 41-174, and related instructions, and has adopted new Administrative Rule Chapter 405, to implement the composite return changes enacted in Senate File 608 and described in this guidance.
For information on Iowa’s composite return and nonresident withholding requirements for pass-through entities and their nonresident members in effect before tax year 2022, see the IA 1040C (composite individual income tax return for nonresidents), as well as Iowa Administrative Code rule 701—chapter 404 (composite returns) and Iowa Administrative Code 701—307.4 (withholding on nonresidents).