Iowa Subtractions From Income
To enter this information into the TaxSlayer program, go to the State Section > Iowa return > Enter Myself > Subtractions from Income
Payments to an IRA, KEOGH, or SEP
Enter the amount claimed on your federal tax return for payments made to your IRA, Keogh Plan, SEP, SIMPLE, or Qualified Plans. Payments to a Roth IRA are not deductible.
Note: MARRIED SEPARATE FILERS:
* If only one spouse has earned income, that individual can contribute up to $5,500 per year ($6,500 if 50 or older) to an IRA account of the nonworking spouse and up to $5,500 per year ($6,500 if 50 or older) to an IRA account of the individual.
* If both spouses earned income and made contributions to an IRA account, each spouse must claim his or her own contribution, not to exceed $5,500 per spouse ($6,500 if 50 or older).
* If both spouses made contributions to an IRA but only a portion of the contribution is deductible on the federal return, the amount of the IRA deduction that is allowed for federal income tax purposes must be allocated between the spouses in the ratio of the IRA contribution made by each spouse to the total IRA contribution made by both spouses.
* For Keogh Plans, SEPs, SIMPLE, or Qualified Plans, each spouse must claim his or her individual contributions.
Deductible Portion (One-Half) of Self-Employment Tax
Enter the amount of self-employment tax that was deductible on line 27 of your federal 1040 in computing federal adjusted gross income.
Note: MARRIED SEPARATE FILERS: The deduction is allocated in the ratio of self-employment tax paid by each spouse to the total self employment tax paid.
Health Insurance Deduction
Enter 100% of the amount paid for health and dental insurance premiums paid with post-tax funds. This includes supplemental health insurance, such as Medicare B supplemental medical insurance and Medicare D voluntary prescription drug insurance program (note "Medicare tax withheld" on your W-2), and long-term nursing home coverage.
The deductions must be reduced by the amount of any premium reimbursement from Health Reimbursement Arrangements (HRAs). Schedule A may not contain any health insurance premiums which were used as a deduction on line 18. Please click here for additional information about the Health Insurance Deduction and information regarding Married Separate Filers.
Penalty on Early Withdrawal of Savings
Enter the amount of any penalty you were charged because you withdrew funds from your time savings deposit before its maturity.
Note: MARRIED SEPARATE FILERS: Divide the penalty amount between spouses based upon registered ownership of the time deposit.
Enter the amount of alimony payments or separate maintenance payments that were deductible on your federal tax return.
Note: MARRIED SEPARATE FILERS: Only the spouse liable for these payments can deduct the alimony paid.
Pension/Retirement Income Exclusion
If you or your spouse receive a pension, annuity, self-employed retirement plan,deferred compensation, IRA distribution, or other retirement plan benefits, you may be eligible to exclude from Iowa income tax part or all of the retirement income that is taxable on your federal return. Social Security benefits, railroad retirement benefits, and military retirement pay are not included.
The exclusion can be up to $6,000 for individuals who file status 1, 5, or 6 and up to $12,000 for married taxpayers who file status 2, 3, or 4. To take this exclusion the income recipient must meet one of the following conditions:
a. 55 years of age or older on December 31, 2017, or
b. disabled, or
c. a surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion in 2017 on the basis of age or disability.
Note: MARRIED SEPARATE FILERS: If both spouses have pension income, and both meet the eligibility requirements, the exclusion of up to $12,000 is prorated between them in the ratio that each spouse’s pension relates to the total pension received by both spouses. If only one spouse has pension income and meets the eligibility requirements, that spouse takes the entire exclusion of up to $12,000. The spouse who has no pension income receives no exclusion.
Moving Expense Deduction
Enter the deduction for moving expenses incurred in 2017. Attach a copy of federal form 3903.
Note: MARRIED SEPARATE FILERS: This deduction must be divided between spouses based on earned income received after their move. If one spouse can show that the move was made for that spouse, that spouse is entitled to the entire deduction.
Iowa Capital Gain Deduction - for certain business/farm assets ONLY
You must complete and include the applicable IA 100 with your return to claim the Iowa Capital Gain Deduction. Gains on the sale of stocks or bonds do not generally qualify for the capital gain deduction. Capital gains from the sale of investment property do not qualify for the capital gain deduction, even if sold to lineal descendants of the owners of the property. Non-farm rental property may qualify. In addition to the instructions and guidance found in the applicable IA 100, flowcharts to assist in determining if a gain qualifies are found in the Online Expanded Instructions.
Note: MARRIED SEPARATE FILERS: Divide the capital gain deduction based on ownership of the asset.
a. Jointly held: Divide equally between spouses.
b. If other than jointly held: Divide between spouses based on percentage of ownership.
For additional information, please see Iowa Capital Gain Deduction.
College Savings Iowa or Iowa Advisor 529 Education Savings Plans
If you or your spouse participate in the College Savings Iowa 529 Plan (Iowa Educational Savings Plan Trust) or the Iowa Advisor 529 Plan, each may deduct an amount contributed not to exceed $3,239 per beneficiary. A rollover from another state's 529 plan qualifies toward the deduction for Iowa income tax.
To enter this information into the TaxSlayer program, go to the State Section > Iowa return > Enter Myself > Continue > Subtractions from Income > Other Adjustments > Begin > Choose College Savings Iowa from the dropdown menu.
Active Duty Military Pay
Iowa allows its members of the armed forces, armed forces military reserve and the national guard in an active duty status to exclude pay received from the federal government for military service performed, to the extent it was included on line 15 of their Iowa return.
To enter this information into the TaxSlayer program, go to the State Section > Iowa return > Enter Myself > Subtractions from Income > Other Adjustments > Choose Active Duty Military Pay from the dropdown menu for Adjustment Type.
Other Adjustments include:
* Claim of Right Deductions
* Disability Income Exclusion
* Domestic Production Activities
* Employer Social Security Credit
* Federal Alcohol Fuel Credit
* Gains or Losses from Distressed Sale
* In-Home Health Care
* Injured Veterans Program Contributions
* Injured Veterans Program Grants
* Iowa ABLE Savings Plan Trust
* Iowa Net Operating Loss
* Iowa Veterans Trust Fund
* Military Exemptions
* Modifications to Partnerships/ S-Corp Income
* Nonresident Electric Utility Worker
* Organ Transplant Expenses
* Rapid Response to State Disasters
* Segal Americorps Education Award Payments
* Speculative Shell Buildings
* Victim Compensation Awards
* Wages Paid Certain Individuals
* Work Opportunity Credit
To see additional descriptions for the list of "Other Adjustments", please click here.