IOWA
separate property state

 

Military Income:  Exempt for active duty members, but member must still file a return.

Military Filing Requirement:  Yes, all residents must file a return.

Military Spouse Residency Relief Act:  Service member in state in compliance with military orders. Spouse in state solely to be with service member. Spouse must not be a resident of Iowa. Spouse may claim exemption from Iowa income tax withholding by checking the appropriate box on Form IA W-4, enter the state other than Iowa you are claiming as state of domicile, attach copy of spousal military ID card to the IA W-4 provided to the employer

Forms Used:          

Filing Status:  Spouses may file separate returns.  If nonmilitary spouse is a nonresident, they can file jointly as nonresidents.  Nonresidents and part year residents may file a joint return even if only one spouse had income from Iowa.  If both spouses have income, they may pay less tax by filing married filing separate or married filing separate on a combined return.  Note:  Taxpayer must report, on current year's return,  federal income tax refund received from prior year return.

Attach Copy of Federal Return:  Yes, if there are schedules

Not Taxed:

            Retirement pay:  a portion is excluded.  See instructions if software doesn't automatically compute

Other State Tax Credit:  Available to residents.  Attach Iowa Form IA 130 and copy of other state return.  

Reciprocity StatesIllinois.

Miscellaneous:  Social Security is taxed differently from federal. 

Where to Mail:
Refunds: Tax Due:
Iowa Income Tax 
Refund Processing 
Dept of Revenue and Finance
Hoover State Office Building
Des Moines, IA 50319-0120

Iowa Income Tax
Document Processing
Dept of Revenue and Finance
P O Box 9187
Des Moines, IA 50319-0120

Refund Inquiry: (515) 281-4966 Website:  www.state.ia.us/tax
Other Info: General Information:  (515) 281-3114
Iowa Dept of Rev & Finance
Taxpayer Services
Hoover State Office Building
Des Moines, IA 50306-0457
Electronic Filing:  (515) 242-6359
E-filing Info: Retain IA 8453 for 3 years.  The following CANNOT be filed electronically:
Returns with seed capital credit
Returns claiming S Corp refund credit IA 1040A (use IA 1040)
IA 128
IA 133
IA 2440
IA 1040C
IA 6251
IA 8801

Tax Form Instructions:
Resident Instructions Non-Resident Instructions
Military-  

 

Filing Status Scenarios

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Married or Single - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both Iowa residents, lived at their present location all year, and one or both had income.

Main Info Screen.

W-2 Form.  Iowa grants a military pay exclusion for active duty members.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Iowa 1040 Form.  Married taxpayers may file jointly (status 2), married filing separate on a combined return (status 3), or married filing separately (status 4).  If the taxpayer and the spouse both have income, they may pay less tax by filing status 3 or 4.  Check all three options to see which one benefits the taxpayer more.  In this example, the largest refund was given by filing married filing jointly.  You must complete the County Code and the School District Number.

Iowa1040 Wkt.  Review form to ensure that the military income is exempted on line 18.

Iowa 1040 Form.  Active Duty military income is exempted on line 24. Iowa requires their taxpayers to report their refund or additional taxes paid from last year's Federal Income Tax return.  This amount can be found on the 1040, 1040A, or 1040EZ form for last year.  If the taxpayer does not have a copy of their last year tax return or does not know the correct amount they should contact the IRS at 1-800-829-1040 to find out.  Enter this amount on line 27 of the Iowa 1040 Form as in the example.

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of Iowa, while the other member is a resident of a different state.  A Iowa income tax return must be prepared due to the taxpayer or spouse having Iowa earned income.

Main Info Screen.  If the spouse is a domicile (resident) of another state, the parties can file as nonresidents or the Iowa resident can file a separate resident return.  For this example, the taxpayer is a resident of Iowa while the spouse is a resident of North Dakota.  A married filing separate (status 4) resident return works out to be the best refund.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

W-2 Form.  Iowa grants a military pay exclusion for active duty members.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Iowa 1040 Form.   Married taxpayers may file jointly (status 2), married filing separate on a combined return (status 3), or married filing separately (status 4).  If the taxpayer and the spouse both have income, they may pay less tax by filing status 3 or 4. Check all three options to see which one benefits the taxpayer more.  You must complete the County Code and the School District Number.

Iowa1040 Wkt.  Review form to ensure that the military income is exempted on line 18.

Iowa 1040 Form.  Active Duty military income is exempted on line 24. Iowa requires their taxpayers to report their refund or additional taxes paid from last year's Federal Income Tax return.  This amount can be found on the 1040, 1040A, or 1040EZ form for last year.  If the taxpayer does not have a copy of their last year tax return or does not know the correct amount they should contact the IRS at 1-800-829-1040 to find out.  Enter this amount on line 27 of the Iowa 1040 Form as in the example.

Review the remainder of the Iowa Form 1040 form to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a Iowa tax return due to one or both having Iowa earned income.

Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin but must file a Iowa income tax return because the spouse worked in Iowa.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

To comply with the provisions of the Service Members Civil Relief Act, the nonresident military pay should not be included on Line 1 of the Iowa 1040 as well as it should not be reported on the Iowa 126 form.

Iowa Form 1040.   Married taxpayers may file jointly (status 2), married filing separate on a combined return (status 3), or married filing separately (status 4).  If the taxpayer and the spouse both have income, they may pay less tax by filing status 3 or 4. Check all three options to see which one benefits the taxpayer more.  You must complete the County Code and the School District Number.

In order to exempt the nonresident military income you enter the amount in the appropriate column under line 1.

Iowa 1040 Form.  Iowa requires their taxpayers to report their refund or additional taxes paid from last year's Federal Income Tax return.  This amount can be found on the 1040, 1040A, or 1040EZ form for last year.  If the taxpayer does not have a copy of their last year tax return or does not know the correct amount they should contact the IRS at 1-800-829-1040 to find out.  Enter this amount on line 27 of the Iowa 1040 Form as in the example.

Review the remainder of the Iowa Form 1040 and 126 forms to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from Iowa during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of Iowa.  The Spouse and taxpayer must file a Iowa tax return due to one or both of them having Iowa earned income and possibly income from another state.

Main Info Screen.  For this example, the taxpayer is in the military and a resident of North Carolina.  The taxpayer and spouse moved from Iowa to North Dakota during the year.  The spouse was a resident of Iowa but is now changing their residency to North Dakota for tax purposes.  The spouse therefore was a part-year resident of both Iowa and North Dakota and must file a Iowa income tax return because the spouse worked in Iowa.

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Iowa Form 1040.   Married taxpayers may file jointly (status 2), married filing separate on a combined return (status 3), or married filing separately (status 4).  If the taxpayer and the spouse both have income, they may pay less tax by filing status 3 or 4.  Check all three options to see which one benefits the taxpayer more.  You must complete the County Code and the School District Number.

In order to exempt the nonresident military income you enter the amount in the appropriate column under line 1.

Iowa 1040 Form.  Iowa requires their taxpayers to report how much Federal Income Tax Refund they received on last year's tax return.  This amount can be found on the 1040, 1040A, or 1040EZ form for last year.  If the taxpayer does not have a copy of their last year tax return or does not know how much refund they received they should contact the IRS at 1-800-829-1040 to find out.  If the refund received in the prior year was from a jointly filed tax return, it must be divided between the spouses in the ratio of the spouse's net incomes in the year  or which the refund was issued.  If you are not able to figure this out, as a last resort split the prior year's refund equally between the spouses.  Enter this amount on line 27 of the Iowa 1040 Form as in the example.

Iowa Form 126 - Nonresident and Part-year Resident Credit Schedule will be generated. This form is used to subtract out all the other-states (North Carolina and North Dakota) income.   You must enter the residency status and dates of residency as in the example. NOTE:  In this example we have to override the taxpayer and spouse fields for both the nonresident and part-year portions to correctly indicate their status.

Review the remainder of the Iowa Form 1040 and 126 forms to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Married or Single Military Resident of Iowa with Income from Another State  - Taxpayer is single.  The taxpayer must file a Iowa tax return due to him or her having Iowa earned income.

Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of Iowa.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

W-2 Form.  Iowa grants a military pay exclusion for active duty members.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Iowa 1040 Form.  A resident Iowa income tax return is prepared.  Iowa taxes residents on income from all sources, even income earned while living in another state (North Dakota as in this example).  you must complete the County Code and the School District Number.

Iowa1040 Wkt.  Review form to ensure that the military income is exempted on line 18.

Iowa 1040 Form.  Active Duty military income is exempted on line 24. Iowa requires their taxpayers to report their refund or additional taxes paid from last year's Federal Income Tax return.  This amount can be found on the 1040, 1040A, or 1040EZ form for last year.  If the taxpayer does not have a copy of their last year tax return or does not know the correct amount they should contact the IRS at 1-800-829-1040 to find out.  Enter this amount on line 27 of the Iowa 1040 Form as in the example.

Iowa 130 Form, Out-of-State Tax Credit Computation.  Iowa 130 Form must be added to the tax return.  Full Year Iowa Resident's Only section must be prepared to give a credit for taxes paid to another state (North Dakota). You must complete the other states tax return first, then enter the amount of tax from the other states tax return.  This is not the amount the taxpayer had withheld from his or her pay but the amount of tax imposed on them.  Line 1 is the amount of income earned in the other state (North Dakota).  Line 6 is the amount of income tax liability on the (North Dakota) tax return.  A copy of the other state's return must be attached to the Iowa return if not e-filed.

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended Iowa return must be filed because the taxpayer received new tax information after their Iowa return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Iowa 1040X - Amended Individual Income Tax Return.  Add the Iowa 1040X Form to the return.  Indicate the reason for the amendment as in the example.  You must check the box to lock in the original tax due or refund, before making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

Iowa 1040X - Amended Individual Income Tax Return.  Return to the Iowa 1040X form to determine if the taxpayer is receiving an additional refund or owes money.  Enter the current date in the Date field.

Iowa 1040X - Amended Individual Income Tax Return, Page 2.  On Page 2 you must enter an explanation for why the Amended Return is being prepared. 

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.