Line 05: Iowa Tax

Topics:

Expanded Instructions
  • Line: 5
  • Step: 5
  • Step Subject: Tax, Non-refundable Credits & Checkoff Contributions
  • Instruction Year: 2023

Iowa tax from tax rate schedule or alternate tax

Tax from tax rate schedule: Use the Tax Calculation Worksheet (41-026) or the 2023 IA 1040 Tax Calculator.

Alternate tax calculation: You may owe less tax by completing the worksheet below. All filing statuses except filing status 1, Single, may qualify for the Iowa alternate tax computation. Single taxpayers may be eligible for the Iowa income tax reduction; see Iowa Income Tax Reduction Worksheet.

If you are using alternate tax calculation on IA 1040 in lieu of the tax rate calculation, check the box in IA 1040, Step 5.

Special instructions for filing status 3, Married filing separately:

  • The combined Iowa taxable incomes of both spouses must be used.
  • The alternate tax between spouses must be prorated in the ratio of the Iowa taxable income of each spouse to the combined Iowa taxable income of both spouses using lines 7-11.
  • If you are married filing separately and one spouse has a net operating loss that will be carried forward, then you cannot use the alternate tax computation. If the spouse with the net operating loss elects not to carry the net operating loss forward, then you can use the alternate tax computation.
  • If you do not provide the other spouse’s income on the IA 1040, Step 2, you will not be allowed to use the alternate tax calculation.

1. Enter: 

  1. Iowa taxable income from IA 1040, line 4
  2. Itemized/standard deduction from federal form 1040, line 12
  3. Personal exemption deduction allowed for federal purposes ($0 for 2023)
  4. QBI deduction from federal form 1040, line 13
  5. Net operating loss carryover from IA 1040 Schedule 1, line 17, column B
  6. Lump-Sum distributions of taxable income reported on federal form 4972, line 8
  7. Add lines a through f
    Total of line g, columns A and B

2. Enter $13,500 ($32,000 if you or your spouse was 65 or older on 12/31/23)

3. Income subject to alternate tax calculation. Subtract line 2 from line 1

4. Multiply line 3 by 6% (.06)

5. Using the tax tables, determine the tax on the taxable income from the IA 1040, line 5.
(Status 3 filers: Calculate tax separately and combine the amounts)

6. Compare the amounts on line 4 and line 5. Enter the smaller amount. If using filing statuses 2, 4, and 5, also enter on IA 1040, line 5. If using filing status 3 and line 4 is less than line 5, continue to line 7. If using status 3 and line 5 is less than line 4, then enter each spouse’s tax from the tax rate schedule on IA 1040,   line 5. 6.

7. Taxable income of both spouses from line 1g above

8. Total adjusted Iowa taxable income, add lines 7a and 7b      

9. Divide the amount on line 7a by the amount of line 8. Enter to the nearest tenth of a percent

10. Multiply line 6 by the percentage on line 9. Enter here and on IA 1040, line 5

11. Subtract line 10 from line 6. Enter here and on IA 1040, line 5 of your spouse’s return