Line 04: Iowa Taxable Income

Topics:

Expanded Instructions
  • Line: 4
  • Step: 4
  • Step Subject: Taxable Income
  • Instruction Year: 2024

Add lines 2 and 3. Do not include lines 1a through 1e. 

Check the box only if using low-income exemption, alternate tax, or tax reduction. The box should not be checked if using the standard tax rate calculation from the Tax Calculation Worksheet, even if you used either worksheet to determine that the standard tax rate calculation was more beneficial.

The following items must be added for the taxpayer (and spouse, if applicable) to determine if you qualify for low-income exemption, alternate tax, or tax reduction:

  1. Iowa taxable income from IA 1040, line 4
  2. Standard deduction or itemized deductions from IA 1040, line 1d not to exceed the amount that is included in IA 1040, line 2
  3. Personal exemption allowed for federal purposes ($0 for 2024)
  4. Qualified business income deduction from IA 1040, line 1e
  5. Any amount of lump-sum distribution separately taxed on federal form 4972
  6. Carryover of net operating loss claimed on the IA 1040 Schedule 1, line 17b

Filing status 1, Single: If you are using filing status 1 (single), you are exempt from Iowa tax if you meet either of the following conditions:

  1. Your Iowa taxable income from all sources, IA 1040, line 4, is $9,000 or less and you are not claimed as a dependent on another person’s Iowa tax return. ($24,000 if you are 65 or older on 12/31/24)
  2. Your Iowa taxable income from all sources, IA 1040, line 4, is less than $5,000 and you are claimed as a dependent on another person’s Iowa return. For purposes of this condition, none of the income listed above is required to be added back to the Iowa taxable income.

Filing status 3, Married Filing Separately: If you are using filing status 3 (married filing separately), you are exempt from Iowa tax if you meet all of the following conditions:

  1. Your Iowa taxable income from all sources, IA 1040, line 4, with the additions above, is $9,000 or less.
  2. You and your spouse’s combined Iowa taxable income from all sources, IA 1040, line 4, with the additions above, is $13,500 or less.
  3. You are not claimed as a dependent on another person’s Iowa return.

All other filing statuses: If you are married filing jointly, head of household, or qualifying surviving spouse, you are exempt from Iowa tax if you meet both of the following conditions:

  1. Your Iowa taxable income from all sources, IA 1040 line 4, is $13,500 or less ($32,000 if you or your spouse was 65 or older on 12/31/24).
  2. You are not claimed as a dependent on another person’s Iowa return.

Nonresidents and Part-Year Residents: In addition to the exemption provisions above, if you were a nonresident or part-year resident and had Iowa-source net income of less than $1,000 (see note below) you are exempt from Iowa tax. For a description of “Iowa-source income”, see the instructions for the IA 126, lines 1 through 24. If you had Iowa taxes withheld and are requesting a refund, or choose to file an Iowa return even though you aren’t required to do so, you must complete the entire IA 1040 and the entire IA 126.

Note: If you were a nonresident or part-year resident and subject to Iowa lump-sum tax (even if Iowa-source income is less than $1,000), you are required to file an Iowa return reporting the lump-sum tax even if you have no regular Iowa income tax liability.

Illinois Residents

See reciprocal agreement

Military Spouses

See Tax Responsibilities of Servicemembers and their Spouses

Married Separate Filers:
Married taxpayers filing married filing separately must use the combined income of both spouses in determining eligibility for exemption from tax.

If either spouse has a net operating loss that is carried forward, then the other spouse cannot use the low income exemption. If the spouse with the net operating loss chooses not to carry the loss forward, then the other can claim the low income exemption. A statement must be included with the return saying that the spouse with the net operating loss will not carry it forward.