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Tax Credits, Deductions & Exemptions Guidance

Iowa’s conformity with the federal limitations on  business interest expense deductions imposed by Internal Revenue Code (IRC) section 163(j) varies depending on the year. For tax years beginning on or after January 1, 2019, and before January 1,  2020, Iowa conformed with the federal limitation. At this time Iowa does not conform to the federal limitation for tax years beginning on or after January 1, 2020. Due to these differences in conformity, some taxpayers will need to make certain adjustments to their federal business interest expense deduction to calculate the correct Iowa deduction amount for a given year.