Line 04: Iowa Taxable Income

Topics:

Expanded Instructions
  • Line: 4
  • Step: 4
  • Step Subject: Taxable Income
  • Instruction Year: 2023

Add lines 2 and 3.


Check the box if using low-income exemption, alternate tax, or tax reduction. When calculating income for the low-income exemption, the following income must be included:

  1. The incomes of both spouses must be combined to determine if you meet this exemption from tax.
  2. The federal itemized or standard deduction from federal form 1040, line 12 (only include the amount that does not exceed your federal adjusted gross income on federal form 1040, line 11).
  3. Personal exemption deduction allowed for federal purposes ($0 for 2023).
  4. Qualified business income deduction allowed for federal purposes.
  5. Net operating loss carryover from IA 1040 Schedule 1, line 17b.
  6. Any amount of lump-sum distribution separately taxed on federal form 4972.

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 12/31/23)
  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 12/31/23).
  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 26. 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.