- Instruction Year: 2025
What's New for 2025:
Before you Begin
Prior to completing the IA 1040, complete either the federal 1040 or 1040-SR. The federal form must be completed even if there is no federal filing requirement, for purposes of completing the IA 1040. Also, note that the line references are the same on the federal 1040 and 1040-SR.
Rounding off to Whole Dollars: You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3. If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total. If you are entering amounts that include cents, make sure to include the decimal point. If the Department needs to adjust your tax return, the adjustment will be calculated to the cent.
Rounding of IA 148 credits: The Department cannot allow IA 148 credits for more than what is calculated or awarded. If your software does not allow the calculation of tax credits to the cent, the processing of your return may be delayed if the credit is rounded up to a higher amount than what is specifically allowed or awarded.
Line 1f: The new federal “Enhanced Deduction for Seniors” has been added to the IA 1040. This line does not directly affect the calculation of Iowa taxable income as the deduction is already included in your federal taxable income. However, for Iowa purposes this deduction is considered a personal exemption that must be added back when calculating the low-income exemption (filing thresholds), alternate tax, tax reduction, or taxable income for purposes of the health insurance deduction; and has been added to the IA 1040 for this purpose.
Line 5: Iowa now has a flat tax rate of 3.8%.
Line 6: A lump-sum amount received from a governmental or other pension or retirement plan, including defined benefit or defined contribution plans, annuities, individual retirement accounts, plans maintained or contributed to by an employer, or maintained or contributed to by a self-employed person as an employer, and deferred compensation plans or any earnings attributable to a deferred compensation plan is not subject to Iowa lump-sum tax if the recipient is disabled, fifty-five years of age or older, or is the surviving spouse of an individual or is a survivor having an insurable interest in an individual who would have qualified.
Iowa Modifications (Schedule 1)
- College Savings Iowa or Iowa Advisor 529 Education Savings Plan: Beginning in tax year 2025, include any amounts contributed to a college savings Iowa account or Iowa Advisor 529 Education Savings Plan up to $5,800 per beneficiary on Schedule 1, line 14.
- Income from a farm tenancy agreement: Beginning in tax year 2025, include the net income from a farm tenancy agreement that qualifies for the exclusion on Schedule 1, line 18.
UPCOMING FOR 2026:
Threshold for estimated tax payments: Starting with tax year 2026, the tax threshold for when an individual is required to make estimated tax payments has been raised from $200 to $1000. See 2026 IA 1040ES Iowa Individual Estimated Income Tax Instructions (45-009) for more information on estimated tax payments for 2026.
Track Your Return: Use Where's My Refund to check the status of individual income tax returns and amended individual income tax returns you've filed within the last year or over the phone at 515-281-3114 or 800-367-3388.