Iowa Income Tax Information - 2012 (Page 5 of 11) in pdf

MARRIED SEPARATE FILERS: If both spouses have pension income,

Claim of Right Deduction may be taken on line 24 or line 66,

but not both

and both meet the eligibility requirements, the exclusion of up to

g. College Savings Iowa or Iowa Advisor 529 Plan, up to $2,975 per

$12,000 is prorated between them in the ratio that each spouse’s pension

beneficiary

relates to the total pension received by both spouses. If only one spouse

h. Disability income exclusion, attach IA 2440

has pension income and meets the eligibility requirements, that spouse

Domestic production activities deduction, see federal return

takes the entire exclusion of up to $12,000. The spouse who has no

Employee benefits for same-sex married couples

pension income receives no exclusion.

k. Employer Social Security credit from federal return

LINE 22. Moving Expense Deduction. Enter the deduction for moving

Federal alcohol and cellulosic biofuel fuels credit from federal

expenses incurred in 2012. Attach a copy of federal form 3903.

return

MARRIED SEPARATE FILERS: This deduction must be divided

m. Foreign-earned income exclusion and/or foreign housing deduction

between spouses based on earned income received after their move. If

from federal return

one spouse can show that the move was made for that spouse, that

n. Gains or losses from distressed sale transactions

spouse is entitled to the entire deduction.

o. Health savings account deduction from federal return

LINE 23. Iowa Capital Gain Deduction - for certain business/farm

p. Injured veterans program, contributions to (do not put on IA Sch. A)

assets ONLY. Gains on the sale of stocks or bonds do not qualify for

q. Injured veterans program, grants from

the capital gain deduction. This is a 100% deduction of qualifying net

In-home health care

capital gain realized in 2012. Capital gains from the sale of investment

s. Iowa Veterans Trust Fund

property does not qualify for the capital gain deduction, even if sold

Military exemptions, including active duty pay

to lineal descendants of the owners of the property. Non-farm rental

u. Net operating loss, Iowa

property may qualify. Material participation and holding period

v. Organ transplant expenses

requirements, plus a flowchart to assist in determining if a gain qualifies,

w. Partnership income and/or S corporation income: Modifications that

may be found in the online Expanded Instructions. For gains related to

decreased the income

an ESOP, please see the online Expanded Instructions for qualifications.

x. Segal Americorps Education Award Payments

MARRIED SEPARATE FILERS: Divide the capital gain deduction

y. Speculative shell buildings

based on ownership of the asset.

z. Student loan interest deduction from federal 1040, line 33, or from

a. Jointly held: Divide equally between spouses.

federal 1040A, line 18

b. If other than jointly held: Divide between spouses based on percentage

aa. Victim compensation awards

of ownership.

bb. Wages paid to certain individuals

cc. Work Opportunity Credit from federal return

LINE 24. Other Adjustments. Enter the total of other allowable

dd. Other federal adjustments prior to the calculation of federal 1040

adjustments as listed below. Attach an explanation for each adjustment.

line 38 (federal AGI) not already taken on the IA 1040

a. Accrual method

MARRIED SEPARATE FILERS: When the adjustment is attributable

b. Active Duty Military Pay (see online Expanded Instructions)

to a specific spouse, it is taken by that spouse. When the adjustment is

c. Alternative motor vehicle deduction of $2,000 for those completing

not attributable to any one spouse, it must be prorated based on the net

federal form 8910 (Alternative Motor Vehicle Credit)

income amounts on line 26. Calculate through line 26 as if the

d. Capital gain from installment sales reported on the 2001 Iowa return

adjustment in question were excluded. If the adjustment is attributable

using the accrual method

to a dependent, such as the student loan interest deduction, it is prorated

e. Capital or ordinary gain from involuntary conversion related to

based on net income before the adjustment in question.

eminent domain

Line 26 QUALIFICATIONS FOR EXEMPTION FROM TAX: If you qualify for the low income exemption as explained below, enter the words “low

income exemption” in the area to the left of your net income figure on line 26. Enter zero on line 56 and complete the remainder of the return.

a. Your net income from all sources, line 26, is $13,500 or less and

The following income must be included when determining if you are

you are not claimed as a dependent on another person’s Iowa return.

eligible for the $9,000 exemption or the $13,500 exemption ($24,000

($32,000 if you or your spouse is 65 or older on 12/31/12)

or $32,000 if 65 or older on 12/31/12).

MARRIED SEPARATE FILERS: Married taxpayers filing separate

a. The incomes of both spouses must be combined to determine if you

combined or separate returns must use the combined income of both

meet this exemption from tax.

spouses in determining eligibility for exemption from tax. If either

b. The amount of any pension exclusion that is taken on line 21 of the

spouse has a net operating loss that is carried back or forward, then the

IA 1040.

other spouse cannot use the low income exemption. If the spouse with

c. Any Social Security Phase-out amount from line 12 of the Social

the net operating loss chooses not to carry the loss back or forward,

Security Worksheet on page 2.

then the other can claim the low income exemption. A statement must

d. Any amount of lump-sum distribution separately taxed on federal

be attached to the return saying that the spouse with the net operating

form 4972.

loss will not carry it back or forward.

e. Any net operating loss carryover.

Nonresidents and Part-year Residents: In addition to the exemption

FILING STATUS 1, SINGLE: If you are using filing status 1 (single),

provisions above, if you were a nonresident or part-year resident and

you are exempt from Iowa tax if you meet either of the following

had net income from Iowa sources of less than $1,000 (see note below)

conditions:

you are exempt from Iowa tax. To review instructions for “Iowa-source

income,” see the instructions for lines 1-26 of the IA 126. If you had

a. Your net income from all sources, line 26, is $9,000 or less and you

Iowa tax withheld and are requesting a refund, or choose to file an

are not claimed as a dependent on another person’s Iowa return.

Iowa return even though you aren’t required to do so, you must complete

($24,000 if you are 65 or older on 12/31/12)

the entire IA 1040 and the entire IA 126.

b. Your net income from all sources, line 26, is less than $5,000 and

NOTE: If you were a nonresident or part-year resident and subject to

you are claimed as a dependent on another person’s Iowa return.

Iowa lump-sum tax or Iowa minimum tax (even if Iowa-source income

ALL OTHER FILING STATUSES: If you are filing jointly, separate

is less than $1,000), you are required to file an Iowa return reporting

on a combined return, head of household, or qualifying widow(er), you

the lump-sum and/or minimum tax even if you have no regular Iowa

are exempt from Iowa tax if you meet the following condition:

income tax liability.

41-002e (09/14/12)

Iowa Income Tax Information - 2012 Page 5

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