Instructions For Form Ia 1040 - Iowa Individual Income Tax Form

Iowa. Part-year residents moving out of Iowa cannot take any deduction

wages earned in Iowa and interest income from a Nebraska bank. Chad

on this line.

will report the wages and interest on the IA 1040 as all-source income. He

Nonresidents: Do not enter anything on this line.

will list his wages only on the IA 126 as his Iowa-source income.

Nonresident Example 2:

23. IOWA CAPITAL GAIN DEDUCTION.

Laura lived in Illinois the entire tax year. She earned $25,000 in wages

Enter 100% of qualifying capital gains attributable to Iowa sources.

from Iowa and won $5,000 at an Iowa casino. She will report all of her

24. OTHER ADJUSTMENTS.

income on the IA 1040 as all-source income. Only the gambling income

Deduct miscellaneous adjustments to income in the same ratio as the

will be reported on the IA 126 as her Iowa-source income.

income to which the adjustment relates was allocated to Iowa.

Iowa has a reciprocal agreement with Illinois, which means that wages

26. IOWA NET INCOME.

and salaries are taxed by the individual’s state of residence. All income

Subtract line 25 from line 15 and enter the difference on this line. If

received from gambling in Iowa is taxable to Iowa regardless of the

line 26 is $1,000 or more or you are subject to Iowa lump-sum or

person’s state of residence.

minimum tax, complete lines 27 through 33. If line 26 is less than

Part-year Resident Example:

$1,000 and you are not subject to Iowa lump-sum or minimum tax,

Jill lived and worked in Iowa the first six months of the tax year. In

you are not required to file an Iowa income tax return. Married taxpayers

addition to her wages, she received interest income from an Iowa bank.

must combine their Iowa income amounts for purposes of the $1,000 filing

Jill then moved to Missouri, where she was employed for the rest of

threshold. However, if you had Iowa tax withheld and are requesting a

the year. She continued to receive interest income from the Iowa bank.

refund, or choose to file an Iowa return even if you aren’t required to do

Jill will report all of her income from both states on the IA 1040 as all-

so, put 100% on line 29, complete the remainder of the schedule, and put

source income. On the IA 126, she will report only the wages and

the credit amount on line 48 of the IA 1040.

interest income earned while an Iowa resident as Iowa-source income.

Nonresident Example 1:

The interest income earned the last half of the year is not considered

Chad is a resident of Nebraska and works in Iowa. His income includes

Iowa-source income since Jill was no longer an Iowa resident.

IOWA SCHEDULE IA 130

Out-of-state Tax Credit

Schedule IA 130, the Iowa Out-of-state Credit Computation, is only for residents or part-year residents of Iowa who earned income while an Iowa

resident which was taxed by another state or foreign country.

Example 2 - Part-Year Iowa Residents Only

Example 1 - Full-Year Iowa Residents Only

Benny lived in Iowa until the end of June. July 1 he moved to Missouri. He

Jennifer lived in Iowa all year but worked in both Iowa and Nebraska. She

worked all year in the state of Missouri. Benny earned a salary of $30,000

earned $10,000 in Iowa. She also earned $15,000 in Nebraska that was

for the year, $15,000 while he lived in Iowa and $15,000 while he lived in

taxed by Nebraska. Jennifer will report $25,000 on line 15 of the IA 1040

Missouri. Benny also earned $10,000 farm rental income from farmland

as gross income. Line 51 of the IA 1040 is $1,050. On the Nebraska state

located in Iowa. Line 51 of the IA 1040 is $1,292. On the Missouri state

return the tax imposed* on her income was $450.

return, the tax imposed* on his income was $1,000.

Column B

Column A

Spouse

You or Joint

Column B

Column A

Status 3 Only

Spouse

You or Joint

Status 3 Only

1. Amount of gross income you

received that was taxed by Iowa and

taxed by the other state/foreign country. ......................... $15,000

taxed by the other state/foreign country. ........................ $15,000

2. Gross taxable income for residents from

2. Gross taxable income for part-year residents

line 15, IA 1040. ................................................................... 25,000

from line 15, IA 126 ............................................................ 25,000

3. Divide line 1 by line 2 and enter the

percentage (not to exceed 100.0%) .......................................... 60%

percentage (not to exceed 100.0%) ......................................... 60%

4. Tax from line 51, IA 1040 (less lump-sum

tax and minimum tax) ............................................................. 1,050

tax and minimum tax) ............................................................ 1,292

5. Multiply line 4 by percentage on

line 3 ........................................................................................... 630

line 3 .......................................................................................... 775

6. Enter the tax imposed* by the other

state or foreign country .............................................................. 450

state or foreign country .......................................................... 1,000

7. Enter the smaller of line 5 or 6. This

7. Enter the total amount of gross

is your Out-of-state Tax Credit. Enter

income taxed by the other state/

this amount on line 57, IA 1040 ................................................... 450

foreign country. ................................................................... 30,000

* “Tax imposed” is the tax calculated from the tax formula/tables

8. Divide line 1 by line 7 and enter the

on the other state/foreign country’s tax return, less any non-

percentage (not to exceed 100.0%) ......................................... 50%

refundable credits. Do not reduce this figure by the tax withheld

9. Multiply line 6 by the percentage on

or estimated tax payment made to the other state/foreign country.

line 8. ........................................................................................ 500

10. Enter the smaller of line 5 or 9. This

is your Out-of-state Tax Credit. Enter

this amount on line 57, IA 1040. .................................................. 500



Expanded Instructions are at

41-002k (08/15/13)

Instructions For Form Ia 1040 - Iowa Individual Income Tax Form - 2013 Page 11

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