Reportable Social Security Benefits
Iowa does not tax Social Security benefits. While Social Security benefits are excluded from income when computing tax, some Social Security benefits are included as income in determining whether a taxpayer has sufficient income to file an Iowa return, and are included as income for purposes of computing the alternate tax on line 39. NOTE: This also affects you if you are single and use the Tax Reduction Worksheet. The reportable Social Security benefit is calculated using the worksheet below and entered on Step 4 of the IA 1040.
SOCIAL SECURITY WORKSHEET
|1. Enter the amount from Box 5 of form(s) SSA-1099. If you filed a joint federal return, enter the totals for both spouses. Do not include Railroad Retirement benefits from form RRB-1099 here.||1.|
|2. Enter one-half of line 1 amount||2.|
|3. Add amounts from the federal form 1040 on lines 1, 2b, 3b, 4b, 5b, 7 and 8||3.|
|4. Add one-half of Railroad Retirement Net Social Security Equivalent benefits from Box 5 of RRB-1099*||4.|
|5. Add any depreciation and section 179 adjustment from IA 1040, line 14 and all other Iowa nonconformity adjustments to compute correct amount||5.|
|6. Enter the amount from your federal 1040, line 2a||6.|
|7. Add lines 2 through 6||7.|
|8. Enter total adjustments from federal form 1040, Schedule 1, lines 11 through 20, line 23, plus the total other adjustments reported on line 26||8.|
|9. Subtract line 8 from line 7||9.|
10. Enter one of the following amounts based on the federal filing status used on form 1040
|11. Subtract line 10 from line 9.
If zero or less, enter -0-. If line 11 is zero, stop here. None of the Social Security benefits are reportable.
If line 11 is more than zero, go to line 12.
|12. Enter one-half of line 11||12.|
|13. Iowa Reportable Social Security benefits: Enter the smaller of line 2 or line 12 and then enter on IA 1040, step 4||13.|
Depreciation / Section 179 / and All Other Iowa Net Income Decoupling
Iowa taxpayers who received Social Security benefits in 2022 and claimed depreciation / section 179 on their federal returns or have other Iowa net income nonconformity may have to recompute their reportable benefits on the worksheet. For other Iowa nonconformity adjustments see line 14 and IA Schedule A.
Those who need to recompute the reportable Social Security benefits should add the adjustment from line 5 of Schedule IA 4562A and all other Iowa net income nonconformity to the other amounts shown on line 5 of the Social Security Worksheet from the federal return and the RRB-1099. The rest of the form is then completed with the amounts normally used to complete the worksheet from the federal 1040.
Include the following incomes or adjustments to income on line 5 if applicable.
(These were excluded from federal AGI.:
- foreign-earned income
- income excluded by residents of Puerto Rico or American Samoa
- proceeds from Savings Bonds used for higher education and
- employer-provided adoption benefits.
Railroad Retirement Benefits
Although Railroad Retirement benefits are not taxable, one-half of the Net Social Security Equivalent Benefits from Box 5 of the RRB-1099 received must be used to determine the amount of Social Security benefits that are reportable to Iowa.
Interest from Federal Securities
For purposes of determining reportable Social Security benefits, you must also include interest from federal securities.
Married Separate Filers:
a. If both spouses received Social Security benefits, the reportable amount is allocated between the spouses in the ratio of the benefits received by one spouse to the total benefits received. (Examples of how to prorate)
b. If only one spouse received benefits, that spouse will report the calculated portion of the benefits.