reglab/statecodes huggingface dataset:
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 301 - Filing Return and Payment of Tax › Rule 701-301.12 - Tax Benefits for Persons in the Armed Forces Deployed Outside the United States and for Certain Other Persons Serving in Support of Those Forces

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Extension of deadlines.
a.
Extension of certain deadlines for certain military personnel.
(1) For tax years ending after August 2,
				1990, the time period to file state income tax returns and to perform certain
				other acts related to the department ("certain other acts related to the
				department" is defined in paragraph 39.12(1)
"e"
below) is
				extended for persons in the armed forces:
1.
				Who serve in an area designated by the President or the Congress as a combat
				zone.
2. Who serve in an area
				designated by the President or the Congress as a qualified hazardous duty
				area.
3. Who were deployed outside
				the United States in an operation designated by the Secretary of Defense as a
				contingency operation as defined in 10 U.S.C. & 101(a)(13), or which became
				a contingency operation by the operation of law. Persons who were deployed in a
				contingency operation who ceased to participate in such operation on or after
				May 21, 2003, are considered to be eligible individuals for purposes of being
				granted additional time to perform certain acts with the department to the
				extent the period for performing an act did not expire prior to May 21, 2003,
				or a later date if the person ceased to participate in the contingency
				operation on a date after May 21, 2003.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 301 - Filing Return and Payment of Tax › Rule 701-301.14 - Tax Benefits for Persons Serving in Support of the Bosnia-herzegovina Hazardous Duty Area

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1995, a number
				  of state tax benefits are authorized for individuals serving in a location
				  designated by the President and Congress as a qualified hazardous duty area or
				  other persons serving in support of the individuals in the hazardous duty area.
				  Public Law No. 104-117 was enacted by Congress on March 20, 1996, and
				  designated Bosnia, Herzegovina, Croatia, and Macedonia as a qualified hazardous
				  duty area so that troops performing peacekeeping duties in the area would be
				  eligible for tax benefits for federal income tax purposes on the same basis
				  they would have been eligible for the same benefits if they had served in a
				  combat zone under prior law.
For Iowa tax purposes, persons serving peacekeeping duties in
				  the hazardous duty area or other persons serving overseas in support of the
				  persons in the hazardous duty area will be eligible for the same tax benefits
				  that were previously only available to persons serving military duties in a
				  combat zone. The tax benefits that are available for persons serving in the
				  hazardous duty area or persons serving overseas in support of the persons in
				  the hazardous duty area are described in rule 39.12(422).
This rule is intended to implement Iowa Code section
				  422.3 as amended by 1996 Iowa
				  Acts, Senate File 2168.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.1 - Net Income Defined

Current through Register Vol. 47, No. 3, July 24, 2024
Net income for state individual income tax purposes shall
				  mean federal adjusted gross income as properly computed under the Internal
				  Revenue Code and shall include the adjustments in
				  701-40.2 (422) to
				  701-40.9 (422). The remaining
				  provisions of this rule and
				  701-40.12 (422) to
				  701-40.79 (422) shall also be
				  applicable in determining net income.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.5 - Military Pay

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
				Reserved.
(2) For income received
				for services performed prior to January 1, 1969, and for services performed for
				tax periods beginning on or after January 1, 1977, but before January 1, 2011.
				An Iowa resident who is on active duty in the armed forces of the United
				States, as defined in Title 10, United States Code, Section 101, shall include
				all income received for such service performed prior to January 1, 1969, and
				for services performed during tax periods beginning on or after January 1,
				1977, but before January 1, 2011. For tax years beginning on or after January
				1, 2011, see rule 701-40.76 (422). However, the
				taxability of this active duty military income shall be terminated for any
				income received for services performed effective the day after either of the
				two following conditions:
a. When universal
				compulsory military service is reinstated by the United States Congress.
				"Compulsory military service" is defined to be the actual act of drafting
				individuals into the military service and not just the registration of
				individuals under the Military Selective Service Act (50 App. U.S.C. 453);
				or
b. When a state of war is
				declared to exist by the United States Congress.
Federal active duty does not include a member of the national
				  guard when called for training by order of the governor through order of the
				  adjutant general. These members are in the service of the state and not on
				  active duty of the United States. Federal active duty also does not include
				  members of the various military reserve programs. A taxpayer must be on active
				  federal duty to qualify for exemption. National guard and reservists who
				  undergo voluntary training are not on active duty in a federal status. National
				  guard and reservist pay does not qualify for the military exemption and such
				  pay is taxable by the state of Iowa.
Compensation received from the United States Government by
				  nonresident members of the armed forces who are temporarily present in the
				  state of Iowa pursuant to military orders is exempt from Iowa income
				  tax.
This rule is intended to implement Iowa Code section
				  422.5.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.6 - Interest and Dividend Income

Current through Register Vol. 47, No. 3, July 24, 2024
This rule applies to interest and dividends from foreign
				  securities and securities of state and other political subdivisions. Interest
				  and dividends from foreign securities and from securities of state and other
				  political subdivisions are to be included in Iowa taxable income. Certain types
				  of interest and dividends, because of specific exemption, are not included in
				  income for federal tax purposes. To the extent such income has been excluded
				  for federal income tax purposes, unless the term of income is specifically
				  exempted from state taxation by the laws or constitutions of Iowa or of the
				  United States, it must be added to Iowa taxable income.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.7 - Current Year Capital Gains and Losses

Current through Register Vol. 47, No. 3, July 24, 2024
In determining short-term or long-term capital gain or loss
				  the provisions of the Internal Revenue Code are to be followed.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.8 - Gains and Losses on Property Acquired Before January 1, 1934

Current through Register Vol. 47, No. 3, July 24, 2024
When property was acquired prior to January 1, 1934, the
				  basis as of January 1, 1934, for determining capital or other gains or losses
				  is the higher of cost, adjusted for depreciation allowed or allowable to
				  January 1, 1934, or fair market value as of that date.
If, as a result of this provision, a basis is to be used for
				  purposes of Iowa individual income tax which is different from the basis used
				  for purposes of federal income tax, appropriate adjustment must be made and
				  detailed schedules supplied in the computation of Iowa taxable income.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.9 - Work Opportunity Tax Credit and Alcohol and Cellulosic Biofuel Fuels Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Where an individual claims the work opportunity tax credit
				  under Section 51 of the Internal Revenue Code or the alcohol and cellulosic
				  biofuel fuels credit under Section 40 of the Internal Revenue Code, the amount
				  of credit allowable must be used to increase federal taxable income. The amount
				  of credit allowable used to increase federal adjusted gross income is
				  deductible in determining Iowa net income. The work opportunity tax credit
				  applies to eligible individuals who begin work before January 1, 2012. The
				  adjustment for the alcohol and cellulosic biofuel fuels credit is applicable
				  for tax years beginning on or after January 1, 1980.
This rule is intended to implement 2011 Iowa Code Supplement
				  section 422.7 as amended by 2012 Iowa
				  Acts, Senate File 2328.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.12 - Income From Partnerships or Limited Liability Companies

Current through Register Vol. 47, No. 3, July 24, 2024
Residents engaged in a partnership or limited liability
				  company, even if located or doing business outside the state of Iowa, are
				  taxable upon their distributive share of net income of such partnership or
				  limited liability company, whether distributed or not, and are required to
				  include such distributive share in their return. A nonresident individual who
				  is a member of a partnership or limited liability company doing business in
				  Iowa is taxable on that portion of net income which is applicable to the Iowa
				  business activity whether distributed or not. See 701-Chapter 45.
This rule is intended to implement Iowa Code sections
				  422.7,
				  422.8, and
				  422.15.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.13 - Subchapter "s" Income

Current through Register Vol. 47, No. 3, July 24, 2024
Where a corporation elects, under Sections 1371-1379 of the
				  Internal Revenue Code, to distribute the corporation's income to the
				  shareholders, the corporation's income, in its entirety, is subject to
				  individual reporting whether or not actually distributed. Both resident and
				  nonresident shareholders shall report their share of the corporation's net
				  taxable income on their respective Iowa returns.
Isaacson v. Iowa State
				  Tax Commission,
183 N.W.2d 693, Iowa Supreme Court, February 9, 1971.
				  Residents shall report their distributable share in total while nonresidents
				  shall report only their portion of their distributable share which was earned
				  in Iowa. For tax years beginning on or after January 1, 1996, residents should
				  refer to 701-Chapter 50 to determine if they qualify to compute Iowa taxable
				  income by allocation and apportionment. See 701-Chapter 54 for allocation and
				  apportionment of corporate income.
This rule is intended to implement Iowa Code sections
				  422.7,
				  422.8,
				  422.15, and
				  422.36.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.14 - Contract Sales

Current through Register Vol. 47, No. 3, July 24, 2024
Interest derived as income from a land contract is intangible
				  personal property and is assignable to the recipient's domicile. Gains received
				  from the sale or assignment of land contracts are considered to be gains from
				  real property in this state and are assignable to this state. As to
				  nonresidents, see 701-40.16 (422).
This rule is intended to implement Iowa Code sections
				  422.7 and
				  422.8.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.17 - Income of Part-year Residents

Current through Register Vol. 47, No. 3, July 24, 2024
A taxpayer who was a resident of Iowa for only a portion of
				  the taxable year is subject to the following rules of taxation:
1. For that portion of the taxable year for
				which the taxpayer was a nonresident, the taxpayer shall allocate to Iowa only
				the income derived from sources within Iowa.
2. For that portion of the taxable year for
				which the taxpayer was an Iowa resident, the taxpayer shall allocate to Iowa
				all income earned or received whether from sources within or without Iowa.
A taxpayer moving into Iowa may adjust the Iowa-source gross
				  income on Schedule IA 126 by the amount of the moving expense to the extent
				  allowed by Section 217 of the Internal Revenue Code. Any reimbursement of
				  moving expense shall be included in Iowa-source gross income. A taxpayer moving
				  from Iowa to another state or country may not adjust the Iowa-source gross
				  income by the amount of moving expense, nor should any reimbursement of moving
				  expense be allocated to Iowa.
This rule is intended to implement Iowa Code sections
				  422.5,
				  422.7, and
				  422.8.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.18 - Net Operating Loss Carrybacks and Carryovers

Current through Register Vol. 47, No. 3, July 24, 2024
Net operating losses shall be allowed or allowable for Iowa
				  individual income tax purposes and will be computed using a method similar to
				  the method used to compute losses allowed or allowable for federal income tax
				  purposes. In determining the applicable amount of Iowa loss carrybacks and
				  carryovers, the adjustments to net income set forth in Iowa Code section
				  422.7 and the deductions from
				  net income set forth in Iowa Code section
				  422.9 must be considered.
(1)
Treatment of federal income
				taxes.
a. Refund of federal income
				taxes due to net operating loss carrybacks or carryovers shall be reflected in
				the following manner:
(1) Accrual basis
				taxpayers shall accrue refunds of federal income taxes to the year in which the
				net operating loss occurs.
(2) Cash
				basis taxpayers shall reflect refunds of federal income taxes in the return for
				the year in which the refunds are received.
(3) Refunds reported in the year in which the
				net operating loss occurs which contain both business and nonbusiness
				components shall be analyzed and separated accordingly. The amount of refund
				attributable to business income shall be that amount of federal taxes paid on
				business income which are being refunded.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.19 - Casualty Losses

Current through Register Vol. 47, No. 3, July 24, 2024
Casualty losses may be treated in the same manner as net
				  operating losses and may be carried back three years and forward seven years in
				  the event said casualty losses exceed income in the loss year.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.20 - Adjustments to Prior Years

Current through Register Vol. 47, No. 3, July 24, 2024
When Iowa requests for refunds are filed, they shall be
				  allowed only if filed within three years after the tax payment upon which a
				  refund or credit became due, or one year after the tax payment was made,
				  whichever time is the later. Even though a refund may be barred by the statute
				  of limitations, a loss shall be carried back and applied against income on a
				  previous year to determine the correct amount of loss carryforward.
This rule is intended to implement Iowa Code section
				  422.73.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.24 - Lottery Prizes

Current through Register Vol. 47, No. 3, July 24, 2024
Prizes awarded under the Iowa Lottery Act are Iowa earned
				  income. Therefore, individuals who win lottery prizes are subject to Iowa
				  income tax in the aggregate amount of prizes received in the tax year, even if
				  the individuals were not residents of Iowa at the time they received the
				  prizes.
This rule is intended to implement Iowa Code section
				  99E.19.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.27 - Incomes From Distressed Sales of Qualifying Taxpayers

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1986,
				  taxpayers with gains from sales, exchanges, or transfers of property must
				  exclude those gains from net income, if the gains are considered to be
				  distressed sale transactions.
(1)
Qualifications that must be met for transactions to be considered
				distressed sales.
There are a number of qualifications that must be
				met before a transaction can be considered to be a distressed sale. The
				transaction must involve forfeiture of an installment real estate contract, the
				transfer of real or personal property securing a debt to a creditor in
				cancellation of that debt, or from the sale or exchange of property as a result
				of actual notice of foreclosure. The following three additional qualifications
				need to have been met.
a. The forfeiture,
				transfer, or sale or exchange was done for the purpose of establishing a
				positive cash flow.
b. Immediately
				before the forfeiture, transfer, or sale or exchange, the taxpayer's
				debt-to-asset ratio exceeded 90 percent as computed under generally accepted
				accounting principles.
c. The
				taxpayer's net worth at the end of the tax year was less than $75,000.
In determining the taxpayer's debt-to-asset ratio immediately
				  before the forfeiture, transfer, or sale or exchange and at the end of the tax
				  year, the taxpayer must include any asset transferred within 120 days prior to
				  the transaction or within 120 days prior to the end of the tax year without
				  adequate and full consideration in money or money's worth.
Proof of forfeiture of the installment real estate contract,
				  proof of transfer of property to a creditor in cancellation of a debt, or a
				  copy of the notice of foreclosure constitutes documentation of the distressed
				  sale and must be made a part of the return. Balance sheets showing the
				  taxpayer's debt-to-asset ratio immediately before the distressed sale
				  transaction and the taxpayer's net worth at the end of the tax year must also
				  be included with the income tax return. The balance sheets supporting the
				  debt-to-asset ratio and the net worth must list the taxpayer's personal assets
				  and liabilities as well as the assets and liabilities of the taxpayer's farm or
				  other business.
For purposes of this provision, in the case of married
				  taxpayers, except in the instance when the husband and wife live apart at all
				  times during the tax year, the assets and liabilities of both spouses must be
				  considered in determining the taxpayers' net worth or the taxpayers'
				  debt-to-asset ratio.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.29 - Intangible Drilling Costs

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1986, but
				  before January 1, 1987, intangible drilling and development costs which pertain
				  to any well for the production of oil, gas, or geothermal energy, and which are
				  incurred after the commencement of the installation of the production casing
				  for the well, are not allowed as an expense in the tax year when the costs were
				  paid or incurred and must be added to net income. Instead of expensing the
				  intangible drilling and development costs which are incurred after the
				  commencement of the installation of the production casing for a well, the
				  expenses must be amortized over a 26-month period, beginning in the month in
				  which the costs are paid or incurred if the costs were incurred for a well
				  which is located in the United States, the District of Columbia, and those
				  continental shelf areas which are adjacent to United States territorial waters
				  and over which the United States has exclusive rights with respect to the
				  exploration and exploitation of natural resources as provided in Section 638 of
				  the Internal Revenue Code.
In the case of intangible drilling and development costs
				  which are incurred for oil or gas wells outside the United States, those costs
				  must be recovered over a ten-year straight-line amortization period beginning
				  in the year the costs are paid or incurred. However, in lieu of amortization of
				  the costs, the taxpayer may elect to add these costs to the basis of the
				  property for cost depletion purposes.
For tax years beginning on or after January 1, 1987, the
				  intangible drilling costs, which are an addition to income subject to
				  amortization, are the intangible drilling costs described in Section 57(a)(2)
				  of the Internal Revenue Code. These intangible drilling costs are an item of
				  tax preference for federal minimum tax purposes for tax years beginning after
				  December 31, 1986.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.30 - Percentage Depletion

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1987, the
				  percentage depletion that is an addition to net income is the depletion
				  described in Section 57(a)(1) of the Internal Revenue Code only to the extent
				  the depletion applies to an oil, gas, or geothermal well. This depletion is an
				  item of tax preference for federal minimum tax purposes for tax years beginning
				  after December 31, 1986.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.31 - Away-from-home Expenses of State Legislators

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1987, state
				  legislators whose personal residences in their legislative districts are more
				  than 50 miles from the state capitol may claim the same deductions for
				  away-from-home expenses as are allowed on their federal income tax returns
				  under Section 162(h)(1)(B) of the Internal Revenue Code. These individuals may
				  claim deductions for meals and lodging per "legislative day" in the amount of
				  per diem allowance for federal employees in effect for the tax year. The
				  portion of this per diem allowance which is equal to the daily expense
				  allowance authorized for state legislators in Iowa Code section
				  2.10 may be claimed as an
				  adjustment to income. The balance of the per diem allowance for federal
				  employees must be allocated between lodging expenses and meal expenses and is
				  deductible as a miscellaneous itemized deduction. However, only 50 percent of
				  the amount attributable to meal expenses may be deducted for tax years
				  beginning on or after January 1, 1994.
State legislators whose personal residences in their
				  legislative districts are 50 miles or less from the state capitol may claim a
				  deduction for meals and lodging of $50 per "legislative day." However, in lieu
				  of either of the deduction methods previously described in this rule, any state
				  legislator may elect to itemize adjustments to income for amounts incurred for
				  meals and lodging for the "legislative days" of the state legislator.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.32 - Interest and Dividends From Regulated Investment Companies Which Are Exempt From Federal Income Tax

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1987, interest
				  and dividends from regulated investment companies which are exempt from federal
				  income tax under the Internal Revenue Code are subject to Iowa income tax. See
				  rule 701-40.52 (422) for a discussion
				  of the Iowa income tax exemption of some interest and dividends from regulated
				  investment companies that invest in certain obligations of the state of Iowa
				  and its political subdivisions the interest from which is exempt from Iowa
				  income tax. To the extent that a loss on the sale or exchange of stock in a
				  regulated investment company was disallowed on an individual's federal income
				  tax return pursuant to Section 852(b)(4)(B) of the Internal Revenue Code
				  because the taxpayer held the stock six months or less and because the
				  regulated investment company had invested in federal tax-exempt securities, the
				  loss is allowed for purposes of computation of net income.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.34 - Exemption of Restitution Payments for Persons of Japanese Ancestry

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1988,
				  restitution payments authorized by
				  P.L.
				  100-383 to individuals of Japanese ancestry who
				  were interned during World War II are exempt from Iowa income tax to the extent
				  the payments are included in federal adjusted gross income.
				  P.L.
				  100-383 provides for a payment of $20,000 for each
				  qualifying individual who was alive on August 10, 1988. In cases where the
				  qualifying individuals have died prior to the time that the restitution
				  payments were received, the restitution payments received by the survivors of
				  the interned individuals are also exempt from Iowa income tax.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.35 - Exemption of Agent Orange Settlement Proceeds Received by Disabled Veterans or Beneficiaries of Disabled Veterans

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 1989, proceeds
				  from settlement of a lawsuit against the manufacturer or distributor of a
				  Vietnam herbicide received by a disabled veteran or the beneficiary of a
				  disabled veteran for damages from exposure to the herbicide are exempt from
				  Iowa income tax to the extent the proceeds are included in federal adjusted
				  gross income. For purposes of this rule, Vietnam herbicide means a herbicide,
				  defoliant, or other causative agent containing a dioxin, including, but not
				  limited to, Agent Orange used in the Vietnam conflict beginning December 22,
				  1961, and ending May 7, 1975.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.36 - Exemption of Interest Earned on Bonds Issued to Finance Beginning Farmer Loan Program

Current through Register Vol. 47, No. 3, July 24, 2024
Interest earned on or after July 1, 1989, from bonds or notes
				  issued by the agricultural development authority to finance the beginning
				  farmer loan program is exempt from the state income tax.
This rule is intended to implement Iowa Code sections
				  175.17 and
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.37 - Exemption of Interest From Bonds Issued by the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board

Current through Register Vol. 47, No. 3, July 24, 2024
Interest received from bonds issued by the Iowa comprehensive
				  petroleum underground storage tank fund board is exempt from state individual
				  income tax. This is effective for interest received from these bonds on or
				  after May 5, 1989, but before July 1, 2009.
This rule is intended to implement Iowa Code section
				  455G.6.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.39 - Exemption of Interest From Bonds or Notes Issued to Fund the 911 Emergency Telephone System

Current through Register Vol. 47, No. 3, July 24, 2024
Interest received on or after May 4, 1990, from bonds or
				  notes issued by the Iowa finance authority to fund the 911 emergency telephone
				  system is exempt from the state income tax.
This rule is intended to implement Iowa Code sections
				  422.7 and
				  477B.20.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.40 - Exemption of Active-duty Military Pay of National Guard Personnel and Armed Forces Reserve Personnel Received for Services Related to Operation Desert Shield

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years ending on or after August 2, 1990, military pay
				  received by persons in the national guard and persons in the armed forces
				  military reserve is exempt from state income tax to the extent the military pay
				  is not otherwise excluded from taxation and the military pay is for active-duty
				  military service on or after August 2, 1990, pursuant to military orders
				  related to Operation Desert Shield. The exemption applies to individuals called
				  to active duty in Iowa to replace other persons who were in military units who
				  were called to serve on active duty outside Iowa provided the military orders
				  specify that the active duty assignment in Iowa pertains to Operation Desert
				  Shield.
Persons filing original returns or amended returns on Form IA
				  1040X for tax years where the exempt income was received should print the
				  notation, "Operation Desert Shield" at the top of the original return form or
				  amended return form. A copy of the military orders showing the person was
				  called to active duty and was called in support of Operation Desert Shield
				  should be attached to the original return form or amended return form to
				  support the exemption of the active duty military pay.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.41 - Capital Gain Exclusion for Elected Employee-owned Stock in a Qualified Corporation

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
In
				general
. Employee-owners may make a single, irrevocable lifetime
				election to exclude from net income the net capital gain from the sale or
				exchange of capital stock from a qualified corporation at the following rates:
a. For tax years beginning in the 2023
				calendar year, 33 percent.
b. For
				tax years beginning in the 2024 calendar year, 66 percent.
c. For tax years beginning on or after
				January 1, 2025, 100 percent.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.42 - Depreciation of Speculative Shell Buildings

Current through Register Vol. 47, No. 3, July 24, 2024
(1) For tax years beginning on or after
				January 1, 1992, speculative shell buildings constructed or reconstructed after
				that date may be depreciated as 15-year property under the accelerated cost
				recovery system of the Internal Revenue Code. If the taxpayer has deducted
				depreciation on the speculative shell building on the taxpayer's federal income
				tax return, that amount of depreciation must be added to the federal adjusted
				gross income in order to deduct depreciation computed under this
				rule.
(2) On sale or other
				disposition of the speculative building, the taxpayer must report on the
				taxpayer's Iowa individual income tax return the same gain or loss as is
				reported on the taxpayer's federal individual income tax return. If, while
				owned by the taxpayer, the building is converted from a speculative shell
				building to another use, the taxpayer must deduct the same amount of
				depreciation on the taxpayer's Iowa tax return as is deducted on the taxpayer's
				federal tax return.
(3) For the
				purposes of this rule, the term "speculative shell building" means a building
				as defined in Iowa Code section
				427.1(27)
"c."
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.43 - Retroactive Exemption for Payments Received for Providing Unskilled In-home Health Care Services to a Relative

Current through Register Vol. 47, No. 3, July 24, 2024
Retroactive to January 1, 1988, for tax years beginning on or
				  after that date, supplemental assistance payments authorized under Iowa Code
				  section 249.3(2)
"a"
(2) which are received by an individual providing unskilled
				  in-home health care services to a member of the caregiver's family are exempt
				  from state income tax to the extent that the individual caregiver is not a
				  licensed health care professional designated in Iowa Code section
				  147.13, subsections 1 to
				  10.
For purposes of this exemption, a member of the caregiver's
				  family includes a spouse, parent, stepparent, child, stepchild, brother,
				  stepbrother, sister, stepsister, lineal ancestor such as grandparent and
				  great-grandparent, and lineal descendant such as grandchild and
				  great-grandchild, and those previously described relatives who are related by
				  marriage or adoption. Those licensed health care professionals who are not
				  eligible for this exemption include medical doctors, doctors of osteopathy,
				  physician assistants, psychologists, podiatrists, chiropractors, physical
				  therapists, occupational therapists, nurses, dentists, dental hygienists,
				  optometrists, speech pathologists, audiologists, and other similar licensed
				  health care professionals.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.44 - Individual Development Accounts

Current through Register Vol. 47, No. 3, July 24, 2024
Individual development accounts are authorized for low-income
				  taxpayers for tax years beginning on or after January 1, 1994. Additions to the
				  accounts are described in the following subrule:
(1)
Exemption of additions to
				individual development accounts.
The following additions to individual
				development accounts are exempt from the state income tax of the owners of the
				accounts to the extent the additions were subject to federal income tax:
a. The amount of contributions made in the
				tax year to an account by persons and entities other than the owner of the
				account.
b. The amount of any
				savings refund or state match payments made in the tax year to an account as
				authorized for contributions made to the accounts by the owner of the
				account.
c. Earnings on the account
				in the tax year or interest earned on the account.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.47 - Exclusion of Pensions and Other Retirement Benefits for Disabled Individuals, Individuals Who Are 55 Years of Age or Older, Surviving Spouses, and Survivors

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 2023, an
				  individual who is disabled, is 55 years of age or older, is a surviving spouse,
				  or is a survivor with an insurable interest in an individual who would have
				  qualified for the exclusion at the time of death is eligible for an exclusion
				  of retirement benefits received in the tax year. More information can be found
				  in rule 701-302.80 (422) for the
				  exclusion of military retirement pay and rule
				  701-302.23 (422) for the
				  exclusion of Social Security benefits.
(1)
Retirement income.
a.
Qualifying retirement
				income.
Generally, distributions from documented retirement plans
				meeting the qualification requirements in the Internal Revenue Code qualify for
				the retirement income exclusion. The following is a nonexclusive list of plans
				that qualify for the retirement income exclusion:
(1) Traditional individual retirement account
				(IRA) authorized under Internal Revenue Code Section 408(a).
(2) Roth individual retirement account (Roth
				IRA) authorized under Internal Revenue Code Section 408A.
(3) Roth conversion income.
(4) Simplified employee pension individual
				retirement arrangement (SEP-IRA) defined in Internal Revenue Code Section
				408(k).
(5) Savings incentive match
				plan for employees (SIMPLE IRA) defined under Internal Revenue Code Section
				408(p).
(6) Qualified deferred
				compensation plans including those authorized under Internal Revenue Code
				Section 401(k).
(7) Eligible
				deferred compensation plans including those authorized under Internal Revenue
				Code Section 457(b).
(8) A defined
				benefit plan, pension plan, profit-sharing plan, or stock bonus plan qualified
				under Internal Revenue Code Section 401 including IPERS and employee stock
				ownership plans (ESOPs).
(9) Keogh
				plans or HR 10 plans.
(10) Eligible
				combined plans described in Internal Revenue Code Section 414(x).
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.49 - Employer Social Security Credit for Tips

Current through Register Vol. 47, No. 3, July 24, 2024
Employers in the food and beverage industry are allowed a
				  credit under Section 45B of the Internal Revenue Code for a portion of the
				  social security taxes paid or incurred after 1993 on employee tips. The credit
				  is equal to the employer's FICA obligation attributable to tips received which
				  exceed tips treated as wages for purposes of satisfying minimum wage standards
				  of the Fair Labor Standards Act. The credit is allowed only for tips received
				  by an employee in the course of employment from customers on the premises of a
				  business for which the tipping of employees serving food or beverages is
				  customary. To the extent that an employer takes the credit for a portion of the
				  social security taxes paid or incurred, the employer's deduction for the social
				  security tax is reduced accordingly. For Iowa income tax purposes, the full
				  deduction for the social security tax paid or incurred is allowed for tax years
				  beginning on or after January 1, 1994.
This rule is intended to implement Iowa Code Supplement
				  section 422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.51 - Exemption of Active-duty Military Pay of National Guard Personnel and Armed Forces Military Reserve Personnel for Overseas Services Pursuant to Military Orders for Peacekeeping in the Bosnia-herzegovina Area

Current through Register Vol. 47, No. 3, July 24, 2024
For active duty military pay received on or after November
				  21, 1995, by national guard personnel and by armed forces military reserve
				  personnel, the pay is exempt from state income tax to the extent the military
				  pay was earned overseas for services performed pursuant to military orders
				  related to peacekeeping in the Bosnia-Herzegovina area. In order for the active
				  duty pay to qualify for exemption from tax, the military service had to have
				  been performed outside the United States, but not necessarily in the
				  Bosnia-Herzegovina area.
This rule is intended to implement Iowa Code section
				  422.7 as amended by 1997 Iowa
				  Acts, House File 355.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.52 - Mutual Funds

Current through Register Vol. 47, No. 3, July 24, 2024
Iowa does not tax dividend or interest income from regulated
				  investment companies to the extent that such income is derived from interest on
				  United States Government obligations or obligations of this state and its
				  political subdivisions. The exemption is also applicable to income from
				  regulated investment companies which is derived from interest on
				  government-sponsored enterprises and agencies where federal law specifically
				  precludes state taxation of such interest. Income derived from interest on
				  securities which are merely guaranteed by the federal government or from
				  repurchase agreements collateralized by the United States Government
				  obligations is not excluded and is subject to Iowa income tax. There is no
				  distinction between Iowa's tax treatment of interest received by a direct
				  investor as compared with a mutual fund shareholder. The interest retains its
				  same character when it "flows-through" the mutual fund and is subject to
				  taxation accordingly.
Taxpayers may subtract from federal adjusted gross income,
				  income received from any of the obligations listed in subrule 40.2(1) and rule
				  701-40.3 (422) above, even if
				  the obligations are owned indirectly through owning shares in a mutual
				  fund:
1. If the fund invests
				exclusively in these state tax-exempt obligations, the entire amount of the
				distribution (income) from the fund may be subtracted.
2. If the fund invests in both exempt and
				nonexempt obligations, the amount represented by the percentage of the
				distribution that the mutual fund identifies as exempt may be
				subtracted.
3. If the mutual fund
				does not identify an exempt amount or percentage, taxpayers may figure the
				amount to be subtracted by multiplying the distribution by the following
				fraction: as the numerator, the amount invested by the fund in state-exempt
				United States obligations; as the denominator, the fund's total investment. Use
				the year-end amounts to figure the fraction if the percentage ratio has
				remained constant throughout the year. If the percentage ratio has not remained
				constant, take the average of the ratios from the fund's quarterly financial
				reports.
Therefore, if the federal adjusted gross income of an
				  individual, taxable by Iowa, includes dividends or interest of this type, an
				  adjustment must be made deducting the amount of the dividend or
				  interest.
This rule is intended to implement Iowa Code section
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.55 - Exemption of Income Payments for Victims of the Holocaust and Heirs of Victims

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 2000, income
				  payments received by individuals because they were victims of the Holocaust or
				  income payments received by individuals who are heirs of victims of the
				  Holocaust are excluded in the computation of net incomes, to the extent the
				  payments were included in the individuals' federal adjusted gross incomes.
				  Victims of the Holocaust were victims of persecution in the World War II era
				  for racial, ethnic or religious reasons by Nazi Germany or other Axis
				  regime.
Holocaust victims may receive income payments for slave labor
				  performed in the World War II era. Income payments may also be received by
				  Holocaust victims as reparation for assets stolen from, hidden from, or
				  otherwise lost in the World War II era, including proceeds from insurance
				  policies of the victims. The World War II era includes the time of the war and
				  the time immediately before and immediately after the war. However, income from
				  assets acquired with the income payments or from the sale of those assets shall
				  not be excluded from the computation of net income. The exemption of income
				  payments shall only apply to the first recipient of the income payments who was
				  either a victim of persecution by Nazi Germany or any other Axis regime or a
				  person who is an heir of the victim of persecution.
This rule is intended to implement Iowa Code sections
				  217.39 and
				  422.7.
Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 302 - Determination of Net Income › Rule 701-302.56 - Taxation of Income From the Sale of Obligations of the State of Iowa and Its Political Subdivisions

Current through Register Vol. 47, No. 3, July 24, 2024
For tax years beginning on or after January 1, 2001, income
				  from the sale of obligations of the state of Iowa and its political
				  subdivisions shall be added to Iowa net income to the extent not already
				  included. Gains or losses from the sale or other disposition of bonds issued by
				  the state of Iowa or its political subdivisions shall be included in Iowa net
				  income unless the law authorizing these obligations specifically exempts the
				  income from the sale or other disposition of the bonds from the Iowa individual
				  income tax.
This rule is intended to implement Iowa Code section
				  422.7 as amended by 2001 Iowa
				  Acts, chapter 116.