Iowa Additions to Income
Taxable Interest Income
Include the same amounts of interest income reported on your federal return. For additional information pertaining to Iowa taxable interest income and modifications, please click here.
Note: Married Separate Filers: Divide interest income based on registered ownership of stock.
- Jointly held: Divide equally between spouses.
- Held in the name of only one spouse: Allocate interest wholly to that spouse.
Ordinary Dividend Income
Report the same dividends as you reported on your federal return. For additional information pertaining to Iowa ordinary dividends, please click here.
Note: Married Separate Filers: Divide dividends based on registered ownership of stock.
- Jointly held: Divide equally.
- Held in the name of only one spouse: Allocate dividends wholly to that spouse.
Include the same alimony as is shown on your federal return. Note: Married Separate Filers: reported by the spouse who received the alimony.
Report the net business income or loss from federal Schedule C or C-EZ. Attach a copy of the federal form. If one spouse has a loss, the couple may want to determine if filing status 2 is to their advantage. Note: Married Separate filers: reported by the spouse deriving the income or loss.
Capital Gain (Loss)
Enter 100% of any capital gain or loss as reported on line 13 of your federal 1040. Do not subtract any Iowa's capital gain deduction on this line. Must include a federal Schedule D.
Note: Married Separate filers: taxpayers who filed separate federal returns should report capital gain or loss as reported for federal tax purposes. If a joint federal return was filed, each spouse must report capital gain on the basis of ownership of the property sold or exchanged. The combined net capital gain or loss must be the same as reported on the joint federal return.
Other Gain (Loss)
If you sold or exchanged assets used in a trade or business and completed federal form 4797, enter 100% of the gain or loss.
Note: Married Separate filers: divide gains or losses based on ownership of the asset sold or exchanged.
Taxable IRA Distributions
Enter the amount of taxable IRA distributions as shown on your federal return. Taxpayers age 70 1/2 and older can distribute up to $100,000 from their individual retirement account to certain charitable organizations without including the distribution in gross income.
Note: Married Separate filers: Taxable IRA distributions should be reported by the spouse whose name is on the account.
Taxable Pensions and Annuities
The same amounts of pensions and annuities are taxable for Iowa as are taxable on your federal return, except Railroad Retirement benefits paid by the Railroad Retirement Board. These are not taxable on the Iowa return. Do not subtract any Iowa pension exclusion on this line.
Note: Married Separate Filers: The taxable portion of pensions and annuities is reported by the spouse who received the income.
Rents, Royalties, Partnerships, Estates, Etc.
Report the income or loss from federal Schedule E and include a copy with the state return. Note: Married Separate filers: Divide income or loss from Schedule E based on ownership of the asset-producing income or partnership interest or individual named as beneficiary.
Farm Income (Loss)
Enter the income or loss from federal Schedule F and include a copy with the state return. Note: Married Separate Filers: Farm income must be reported by the spouse who claims it for self-employment tax purposes on the federal Schedule SE. If the other spouse claims a share of the farm income, then that spouse must attach a worksheet showing how that share was determined based on capital contribution, management and control, and services rendered.
Enter the amount of unemployment compensation benefits that was taxable on your federal return with the following modifications:
- Add back any amount of unemployment compensation excluded on your federal return.
- Do not include unemployment compensation and sickness insurance benefits paid by the Railroad Retirement Board.
Note: Married Separate Filers: If both spouses received unemployment benefits, each of the spouses should report the benefits received as shown on the 1099-G for each spouse.
Taxable Social Security Benefits
Iowa does not tax Social Security benefits in the same manner as the Internal Revenue Service. Iowa is implementing a gradual phase-out of the tax on Social Security income. For tax year 2014 the phase-out percentage is 89%. To compute the amount of Social Security benefits see the worksheet included with the long form instructions.
Note: Married Separate Filers: a) If both spouses received Social Security benefits, the taxable amount is allocated between the spouses in the ration of the benefits received by one spouse to the total benefits received. b) If only one spouse received benefits, that spouse should report the portion of the benefits that is taxable.
For a list of Other Income to report within your Iowa state return, please see Other Income.