Schedule H General Instructions
This schedule must be used when the corporation files as part of a consolidated group for federal
purposes. Use extra pages if necessary to list all companies included in the consolidated federal
return.
Iowa Schedule H has three parts:
Schedule H1 calculates the federal tax deduction/refund.
Information from the consolidating income statements for each company included in the
consolidated federal return is entered on Schedule H2.
Schedule H3 is used to reconcile the consolidating income statements (Schedule H2) with the
consolidated federal return.
Schedule H1 Instructions
List in column A the federal taxable income after the net operating loss and special deductions or in
column B the federal taxable loss for each company computed as if a separate federal corporation
income tax return was filed. Normally, this would be from the federal 1120, line 30.
Complete lines 45 through 49 of Schedule H1 as follows:
Line 45: Show federal taxable income of the profit company(s) reported on this Iowa return.
Line 46: Enter the total from line 42, column A.
Line 47: Enter federal tax from the federal 1120.
Line 49: The allowed federal tax deduction is 50% of the federal income taxes paid or accrued. The
deduction should be computed using one of the following methods.
Accrual basis taxpayers should determine the total tax shown on page 1 of federal form 1120 and
use the formula shown below.
Cash basis taxpayers should compute the sum of federal taxes paid during the current tax period
and federal motor fuel tax credits applied against the tax liability for the current tax period, less any
federal refunds received during the current tax period using the formula shown below on each period
producing payments or refunds.
Total Tax
Separate Company Federal
Reported on
Taxable Income
the
Federal
Sum of all Positive Income
x
Consolidated
x
50%
=
Tax
Producing Companies
Federal Return
Deduction
Included in the Consolidated
(line 31 of the
Taxable Income Statements
1120)
If your company files a consolidated Iowa return, the numerator in the above equation is the sum of
the incomes of the profit companies included in the consolidated Iowa return. This formula is
referred to as the “revenue producer’s formula.” The federal tax deduction is reported on IA 1120,
line 5.
If the federal consolidated return reports a net operating loss which is carried back, the federal
refund is computed substituting loss companies in place of taxable income companies in the above
formula. This formula is known as the “loss producer’s formula.” The federal refund is reported on
IA 1120, line 2, in the loss year.
42-021b (06/18/15)
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