1040 Instructions

Step 1 4 Step 2 7 Step 3 8 Step 4 9 Step 5 12 Step 6 43 Step 7 55 Step 8 57 Step 9 79

Other Information What’s New for 2025 3 Before You Begin 4 Who Must File? 5 Conformity with the Internal Revenue Code 6 Filing Status 7 Exemption Credits 8 IA 1040 Schedule 1 64 Third Party Designee 79 Signature 79 Contacts 80 Amending Tax Returns 81 Are You a Resident of Iowa for Tax Purposes? 81 Certified Tax Returns for Nonresidents 82 Confidentiality 82 Credits: Refundable or Nonrefundable - What's the Difference? 83 Do You Owe Tax? Here Are Your Payment Options 83 Estimated Payments 85 Extension Requests 85 Farmers and Commercial Fishers 86 Federal Bonus Depreciation / Section 179 86 Injured Spouse 87 Iowa and Illinois Reciprocal Agreement 87 Iowa Income Tax Responsibilities of Native Americans 88 Iowa Tax Responsibilities of Servicemembers and their Spouses 89 Iowans Paid in Foreign Currency 95 Mailing Address for Returns and Payments 95 Net Operating Losses 96 Nonresidents and Part-Year Residents 96 Nonresidents with Gambling Winnings 96 Record Keeping 97 Refunds May Be Used to Pay Debt 97 Submitting Your Return 97 Use Tax 97 What to Do If You Do Not Receive Your W-2 98

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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.

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Step 1 Before You Begin Step: 1 Step Subject: Name and Address 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. Make sure you have all W-2s, 1099s, and other tax documents needed to prepare your return, including your completed federal 1040. You will need to complete the IA 1040 through line 4 in order to determine if you have an Iowa filing requirement or not. Important: Enter your Social Security Number(s) in the appropriate boxes on the form. Otherwise, we may be unable to process your return. The Iowa Department of Revenue may require proof of any item listed on a return or schedule. Filing Period If your federal filing period is other than calendar year 2025, enter the beginning and ending dates of your federal fiscal tax year on the line provided above the name and address boxes on the return. Name and Mailing Address Enter your name and current mailing address on the tax return. If using a foreign mailing address, include the foreign city, country, and postal code in place of the domestic city, state, ZIP. Provide the Department with your updated address if you move after your return is filed. Did you know? You can log into GovConnectIowa to change your individual income account address online. Otherwise, complete the Iowa Change of Address (92-032) and either mail or fax it to the Department. If any information is incomplete or illegible, the form will be returned. County Enter the number of the county you lived in as of December 31, 2025. If you do not know your county number, view a list of districts by county and number. ● Nonresidents and part-year residents who moved out of Iowa before December 31, 2025, should enter "00" as your county number. ● Part-year residents who moved into Iowa should enter the number of the Iowa county in which you lived on December 31, 2025. ● Servicemembers should enter the county number of their Iowa residence, even if the servicemember is not physically present in Iowa on the last day of the tax year. School District Number Enter the district in which you lived on December 31, 2025. View a list of districts by county and number. This is not necessarily the district where your children attended school. Even if you do not have children, you must enter this number. 4

Other possible resources to identify your school district information include: ● Your voter registration card ● Search “school surtax” from the Iowa Tax Mapper ● Your county assessor’s website Nonresidents, Part-Year Residents, and Servicemembers ● Nonresidents: Those who did not live in Iowa at all during 2025 should enter "0000" for the school district number. You are not subject to school district surtax on line 19. ● Part-year residents who moved into Iowa should enter the Iowa school district in which you lived on the last day of 2025. You may be subject to school district surtax on line 19. ● Part-year residents who moved out of Iowa before December 31, 2025, should enter "9999." You are not subject to school district surtax on line 19. ● Servicemembers should enter the school district number of their Iowa residence, even if the servicemember is not physically present in Iowa on the last day of the tax year. You may be subject to school district surtax on line 19. Foreign Currency Taxpayers who are paid in foreign currency must convert the currency to U.S. dollars as required for federal tax purposes. Who Must File? You must file an Iowa return if... you were a resident or part-year resident of Iowa in 2025 and meet any of the following requirements. Nonresidents, see items f. and g. The following items must be added for the taxpayer (and spouse, if applicable) to determine if there is a filing requirement: ● Iowa taxable income from IA 1040, line 4 ● Standard deduction or itemized deductions from IA 1040, line 1d not to exceed the amount included in IA 1040, line 2. ● Personal exemption allowed for federal purposes from federal Schedule 1-A, line 37 ● Qualified business income deduction from IA 1040, line 1e ● Any amount of lump-sum tax distributions of taxable income ● Carryover of net operating loss claimed on the IA 1040 Schedule 1, line 17 Married couples filing jointly: Incomes of both spouses must be included when determining who must file. a. You are using filing status single or married filing separately and the total of the lines listed above is more than $9,000. ($24,000 if 65 or older on 12/31/25) b. You are using filing status married filing jointly, head of household, or qualifying surviving spouse, and the total of the lines listed above is more than $13,500. ($32,000 if you or your spouse was 65 or older on 12/31/25) c. You were claimed as a dependent on another person’s Iowa return and had Iowa taxable income (IA 1040, line 4) of $5,000 or more. NOTE: You do not need to add the items listed above to IA 1040, line 4 in determination of this filing requirement. d. You were in the military service with Iowa shown as your legal residence even though stationed outside of Iowa unless you are below the income thresholds above. For information about military spouses, see Tax Responsibilities of Military Personnel. 5

e. You were subject to Iowa lump-sum tax. f. You were a nonresident or part-year resident and your Iowa-source net income IA 126, line 27, (pdf) was $1,000 or more, unless below the income thresholds above. In the case of married nonresidents, the spouses' combined income is used to determine if their income is high enough to require them to file an Iowa return. To understand “Iowa-source income,” see the instructions for IA 126, lines 1 through 27. Common examples of Iowa-source income include: ■ Wages earned in Iowa ■ Income from Iowa property ■ Rental income ■ Capital gain on the sale of property ■ Farming income from Iowa farmland activities and land rent ■ Self-employment income earned while working in Iowa ■ Iowa unemployment benefits ■ Iowa gambling winnings ■ Income from an IA K-1 issued by pass-through entities, such as partnerships and S-corporations g. You were a nonresident or part-year resident and subject to Iowa lump-sum tax (even if Iowa-source net income is less than $1,000). NOTE: If you do not meet any of the above requirements but you had Iowa tax withheld and you wish to receive a refund, you must file an Iowa return.

Conformity with the Internal Revenue Code For tax years beginning on or after January 1, 2023, the starting point for taxation is federal taxable income. Iowa has also adopted rolling conformity, meaning the state will automatically conform with any changes made to the Internal Revenue Code in the calculation of federal taxable income, except as specified by Iowa law. The calculation of Iowa taxable income is the same as the calculation for federal taxable income,with certain exceptions which are described in the income tax instructions. Examples of the differences between federal and Iowa taxable income include but are not limited to: depreciation for certain assets placed in service before tax year 2021, section 179 special election deductions, and the business interest expense limitation.

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Step 2 Filing Status Step: 2 Step Subject: Filing Status Your filing status on the Iowa return is the same filing status as on your federal return. Status 1. Single Check filing status 1 if you used the single filing status on your federal return. All single filers must answer the question, "Were you claimed as a dependent on another person's Iowa return?" If this question is not answered, you will be taxed as a dependent. Status 2. Married Filing Jointly Check filing status 2 if you used the married filing jointly status on your federal return.. Use the same filing status as your federal return, even if only one spouse had income from Iowa sources. Both spouses must sign the return. Joint and several liability Both spouses are jointly and severally liable for the total tax due on the return, except when one spouse is eligible for relief from joint and several liability under criteria established pursuant to section 6015 of the Internal Revenue Code. Spouse with debts If a spouse has outstanding debt that may be automatically paid (setoff) with your refund, be sure to read our Refunds May Be Used to Pay Debt information. Status 3. Married Filing Separately Check filing status 3 if you and your spouse filed separate federal tax returns. Use the same filing status as your federal return, even if only one spouse had income from Iowa sources. Write your spouse's name and Social Security Number in the spaces provided at the top of the return in Step 1. If you are claiming the low-income exemption or alternate tax calculation, write your spouse’s net income (for information on how to calculate the net income, see line 1g of the Alternate Tax Worksheet, 41-145) in the space provided in Step 2. The processing of refunds, alternate tax calculations, and low-income exemptions will be delayed without this information or supporting schedules. Taxpayers using filing status 3 may have to prorate (divide) certain items between them on the return. This information is included with instructions for each line of the return. Married taxpayers using filing status 3 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 back or 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 back or forward, then the other can claim the low-income exemption. A statement must be attached to the return saying that the spouse with the net operating loss will not carry it back or forward. Status 4. Head of Household Check filing status 4 if you are filing as head of household for federal income tax purposes. If you have a qualifying person (as defined by the Internal Revenue Service) living with you who you did not claim as a dependent on this return, enter the person's full legal name in Step 2. Status 5. Qualifying Surviving Spouse Check filing status 5 if you meet the federal filing requirements for qualifying surviving spouse. Enter the dependent’s information in Step 3. Enter the child’s full legal name in Step 2 if the qualifying person is a child but not your dependent. 7

Step 3 Exemption Credits Step: 3 Step Subject: Exemption Credits a. Personal Credit If you are filing single (status 1), married filing separately (status 3), or qualifying surviving spouse (status 5), enter 1 in the Personal Credit space. If you are filing married filing jointly (status 2) or head of household (status 4), you are eligible for an extra credit and should enter 2 in the Personal Credit space. Add the number of personal credits and multiply by $40. Enter this amount on the line. Note to dependents filing their own returns: You may claim a $40 personal exemption credit even if you are claimed as a dependent on another person's Iowa return. b. Additional Personal Credit: 65 or older or blind If you were 65 or older on or before January 1, 2026, you may take an additional personal credit. If your spouse was 65 or older on or before January 1, 2026, and you are filing a joint return (status 2), you may take an additional personal credit for your spouse. If you were blind on December 31, 2025, you may take an additional personal credit. If your spouse was blind on December 31, 2025, and you are filing a joint return (status 2), you may take an additional personal credit for your spouse. Add the number of credits for 65 or older and blind and multiply by $20. Enter this amount on the line. c. Dependents: Consult IRS Publication 17 to learn who qualifies as a dependent. Enter the number of dependent children and other dependents you are claiming for federal income tax purposes. Add the number of dependent credits and multiply by $40. Enter this amount on the line. Federal tax law determines whether or not a person is a dependent. Consult IRS Publication 17 to learn who qualifies as a dependent. The IRS has guidelines that also determine which parent/guardian can claim a dependent when separate returns are filed (such as in the case of divorced parents). The Iowa tax law follows federal guidelines. d. Total Add the dollar amounts and enter on Step 3, line d and on line 8. Dependent(s) Enter the first name, last name, social security number, and relationship to you for each dependent claimed on the tax return. If you have more than four dependents, check the box and include a separate page listing any additional dependents with this return. Married Separate Filers: You must report the same dependents you claimed on your federal income tax return. 8

Step 4 Federal Total Income Line: 1 Step: 4 Step Subject: Taxable Income Line 1a: Federal total income. Enter federal total income as reported on federal 1040, line 9. If you were not required to file a federal return you must enter on line 1a the amount that would have been reported on federal 1040, line 9, if a return was required to be filed. Line 1b: Federal adjustments to income. Enter federal adjustments to income as reported on federal 1040, line 10. Line 1c: Federal adjusted gross income. Enter federal adjusted gross income as reported on federal 1040, line 11a. Line 1d: Standard deduction or itemized deductions. Enter the standard deduction or itemized deductions, if applicable, as reported on federal 1040, line 12e. This information may be needed for taxpayers who claim the low-income exemption, alternate tax calculation, tax reduction, or taxable income for purposes of the health insurance deduction. Line 1e: Qualified business income deduction. Enter the qualified business income deduction as reported on federal 1040, line 13a. This information may be needed for taxpayers who claim the low-income exemption, alternate tax calculation, tax reduction, or taxable income for purposes of the health insurance deduction. Line 1f: Enhanced Deduction for Seniors. Enter the enhanced deduction for seniors from federal 1040, Schedule 1-A, line 37. For Iowa purposes, this deduction is considered a personal exemption. 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 must be added back when calculating the low-income exemption, 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. Federal Taxable Income Line: 2 Step: 4 Step Subject: Taxable Income Enter your federal taxable income as reported on federal 1040, line 15. If the amount of federal taxable income is zero, subtract the amount reported on IA 1040 lines 1d and 1e, and federal form 1040 line 13b from the amount reported on IA 1040, line 1c and report this amount (this amount can be negative). If you were not required to file a federal return you must enter on line 2 the amount that would have been reported on federal 1040, line 15, if a return was required to be filed. If the amount of federal taxable income 9

would have been zero, subtract the amount reported on IA 1040 lines 1d and 1e, and federal form 1040 line 13b from the amount reported on IA 1040, line 1c and report this amount (this amount can be negative). In other words, for either scenario above, if the calculation on federal form 1040 line 15 would have been a negative number if not for the limitation listed on the federal form to enter zero if the amount calculated for line 15 is zero or less, this negative number can be used for Iowa purposes only on IA 1040 Line 2. Net Iowa Modifications Line: 3 Step: 4 Step Subject: Taxable Income Enter amount from IA 1040, Schedule 1, line 21. This amount may be positive or negative. Schedule 1 Schedule 1 is used to report Iowa modifications to federal taxable income. Amounts should only be reported if there is a difference between the federal and Iowa reportable amounts. Column A should be used to report additions to federal taxable income and Column B should be used to report subtractions from federal taxable income. Report all amounts on lines 1-12 (Column A or B) and 14-19 as a positive number. If line 21 is negative, enter as negative on the IA 1040, line 3. Iowa Taxable Income Line: 4 Step: 4 Step Subject: Taxable Income Add lines 2 and 3. Do not include lines 1a through 1f. 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 from federal Schedule 1-A, line 37 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

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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: a. 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 12/31/25) b. 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: a. Your Iowa taxable income from all sources, IA 1040, line 4, with the additions above, is $9,000 or less. b. 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. c. 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 12/31/25). 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.

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Step 5 Iowa Tax Line: 5 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Iowa tax or alternate tax Iowa now has a flat tax rate of 3.8%. 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. The most common taxpayers who benefit from the alternate tax calculation are individuals who claim a head of household filing status, are age 65 and older, and have a filing requirement. 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. B. Spouse A. You or Joint 1a. Iowa taxable income from IA 1040, line 4

1b. Itemized/standard deduction from IA 1040, line 1d

1c. Personal exemption deduction allowed for federal purposes

1d. QBI deduction from IA 1040, line 1e

1e. Net operating loss carryover from IA 1040 Schedule 1, line 17, column B

1f. Lump-Sum distributions of taxable income reported on federal form 4972, line 8 1g. Add lines a through f

1. Total of Line g, columns A and B 1. 2. Enter $13,500 ($32,000 if you or your spouse was 65 or older on 12/31/2024) 2. 3. Income subject to alternate tax calculation. Subtract line 2 from line 1 3. 4. Multiply line 3 by 4.3% (.043) 4. 5. Using the tax rate, determine the tax on the taxable income from the IA 1040, line 5. (Status 5. 12

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 7b. 7a. 8. Total adjusted Iowa taxable income, add lines 7a and 7b 8. 9. Divide the amount on line 7a by the amount of line 8. Enter to the nearest tenth of a percent 9. 10. Multiply line 6 by the percentage on line 9. Enter here and on IA 1040, line 5 10. (You) 11. Subtract line 10 from line 6. Enter here and on IA 1040, line 5 of your spouse’s return 11. (Spouse)

Iowa Lump-Sum Tax Line: 6 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions A lump-sum distribution occurs when, in one tax year, you receive the total balance from a pension or profit-sharing plan of an employer due to termination of employment, termination of the plan, or death of the employee. Iowa lump-sum tax applies only if federal form 4972 was used to compute the federal tax on any portion of the lump-sum distribution. If there is no federal lump-sum tax, then there is no Iowa lump-sum tax. NOTE: 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 Residents: Enter 25% of the federal tax from federal form 4972 on the IA 1040, line 6. Include federal form 4972. Part-Year Residents: If a lump-sum distribution reported on federal form 4972 was received while an Iowa resident, 25% of the federal tax from form 4972 must be entered on IA 1040, line 6. Part-year residents who receive a lump-sum distribution while not an Iowa resident are not subject to Iowa lump-sum tax on that distribution. A copy of the federal form 4972 must be included. Nonresidents: Nonresidents receiving lump-sum distributions are not subject to Iowa lump-sum tax. Married Separate Filers: Lump-sum tax is reported by the spouse who received the distribution. 13

Total Tax Line: 7 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Add lines 5 and 6. Taxpayers who had a distressed sale in 2025 and have included the gain in Iowa taxable income may be eligible to limit their tax to their net worth immediately prior to the distressed sale. If you qualify, limit the amount on line 7 to your net worth before the distressed sale and include an IA 6251B Balance Sheet or Statement of Net Worth (41-135). Total Exemption Credit Line: 8 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Enter the total exemption credit amount from IA 1040, Step 3, line d. Tuition and Textbook Credit (K-12 Only) Line: 9 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Taxpayers who have one or more dependents receiving private instruction in Iowa, as defined in section 422.12 (also referred to as homeschooling), or attending kindergarten through 12th grade in an accredited Iowa school (under section 256.11, not operated for a profit, and adheres to the provisions of the U.S. Civil Rights Act of 1964) may take a credit for each dependent for amounts paid for tuition and textbooks. NOTE: Purchases made from Students First Educational Savings Account (ESA) funds authorized under Iowa Code section 257.11B are not eligible for the tuition and textbook credit. The credit amount is 25% of the first $2,000 of qualifying expenses paid for each dependent’s tuition and textbooks. In the case of divorced or separated parents, only the spouse claiming the dependent can claim the amounts paid by that spouse for that dependent’s tuition and textbooks. Qualifying expenses paid with 529 account distributions may qualify for the tuition and textbook credit. Calculating the Credit Calculate the proper amount of expenses per dependent, not to exceed $2,000, and multiply the amount by 25% (.25). Keep records of your calculation, showing the name of each dependent, school(s) attended or qualifications for private instruction, and an itemized list of qualifying expenses. Enter the total allowable credit on IA 1040, line 9. Example: Students Karlee and Kurt have qualifying expenses of $2,400 and $1,700 respectively. Their parents can take a credit of $500 (25% of $2,000 maximum) for Karlee and $425 (25% of $1,700) for Kurt, for a total credit of $925. Example: Student Stephen received Students First ESA funds of $7,635 in tax year 2025. Stephen’s parents paid total tuition to an accredited private school in Iowa of $9,000 for the tax year. They cannot claim a credit for 14

the $7,635 in tuition expenses paid with ESA funds. They may claim a credit of $341.25 (25% of $1,365) for the $1,365 in out-of-pocket tuition expenses. Divorced or separated parents Only the parent claiming the dependent can claim the amounts paid by that parent for that dependent’s tuition and textbooks. Married Separate Filers: This credit must be taken by the spouse claiming the dependent. Any unused part of this credit cannot be used by the other spouse. Eligible & Ineligible Expenditures for the Iowa Tuition and Textbook Tax Credit Expense Eligible Expenditures Ineligible Expenditures Tuition Tuition for any K-12 school that is accredited or for competent private instruction as defined in Iowa Code section 299A.2. Any amount for food, lodging, or clothing or amounts paid relating to the teaching of religious tenets, doctrines or worship; amounts for tutoring not paid to a school Textbooks and Publications Textbooks and other instructional materials used in teaching subjects legally and commonly taught in Iowa's public elementary and secondary schools, including those needed for extracurricular activities (including fees for required textbooks and supplies); computers, if required Yearbooks or annuals; textbook fines Required Materials and Supplies Other Than Textbooks Pocket folders, spiral notebooks, pens, pencils, backpacks, rulers, calculators, flash drives and other items on a required supply list issued by the dependent’s school Items on a supply list that are optional Clothing Rental or purchase of “non-street” costumes for a play or special clothing for a concert not suitable for everyday wear; rental of prom dresses and tuxedos Clothes which can be used for street wear, such as T-shirts for extracurricular events; clothing for a play or concert that is suitable for everyday wear; purchase of prom dresses and tuxedos Driver's Education Fees paid for driver’s education

Dues, Fees and Admissions Annual school fees; fees or dues paid for extracurricular activities; booster club dues (for dependent only); fees for athletics; activity ticket or admission for K-12 school or private instruction-related athletic, academic, music, or dramatic events and awards banquets or buffets; fees for a physical education event such as roller skating; advanced placement fees if paid to high school or private instructor; fees for homecoming, winter formal, prom, or similar events; fees required to park at the school and paid to the school Sports-related socials; special education programs like career conferences; special testing like SAT, PSAT, ACT and Iowa talent search tests; fees paid to K-12 schools for college credit or special programs at colleges and universities; advanced placement fees if paid to a college or a university; parking fines 15

Materials for Extracurricular Activities Materials for extracurricular activities, such as sporting events, speech activities, musical or dramatic events, awards banquets, homecoming, prom, and other school or private instruction-related social events Class rings Music Rental of musical instruments for school or private instruction-related band; music / instrument lessons at a school or as part of private instruction; sheet music used in a school or as part of private instruction; music books and materials used in school or private instruction-related bands or orchestras for maintenance of instruments, including reeds, strings, picks, grease, and other consumables Purchase of musical instruments (including rent-to-own contracts); sheet music for private use Religion -------------------- Amounts paid are not allowed if they relate to teaching of religious tenets, doctrines, or worship Shoes Football, soccer, and golf shoes; other shoes with cleats or spikes not suitable for street wear for teams associated with the school or private instruction Basketball shoes and other shoes suitable for everyday wear Supplies for Industrial Arts, Home Economics or Equivalent Classes Cost of required basic materials for classes such as shop class, mechanics class, agricultural class, home economics class, or equivalent classes Optional expenditures or materials used for personal projects of the dependents or for family benefit Travel Fees for transportation to and from school if paid to the school or private instructor; fees for field trips if the trip is during school hours Travel expenses for overnight trips which involve payment for meals and lodging Uniforms School or private instruction-associated band and athletic uniforms --------------- Volunteer Firefighter and Emergency Medical Services Personnel and Reserve Peace Officer Tax Credit Line: 10 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions The Volunteer Firefighter, Volunteer EMS Personnel, and Reserve Peace Officer Tax Credit is available for volunteer firefighters, volunteer EMS personnel, and volunteer reserve peace officers. In order to qualify for the credits, the taxpayer must meet the conditions listed below. Qualifying Conditions For Volunteer Firefighters: ● Must be an active member of an organized volunteer fire department in Iowa. ● Must meet the minimum training standards established by the Fire Service Training Bureau, a division of the Iowa Department of Health and Human Services. ● A paid firefighter who volunteers for another fire department is eligible for the credit. ● A person who volunteers as a firefighter, for a fire department by which they are employed, is eligible for the credit if they are employed in a capacity other than as a firefighter. 16

For Volunteer Emergency Medical Services Personnel: ● Must be trained to provide emergency medical care, certified as a first responder, and must have received a certificate by the Iowa Department of Health and Human Services. ● A paid EMS personnel member who volunteers for another department is eligible for the credit. ● A person who volunteers as an EMS personnel member, for a department by which they are employed, is eligible for the credit if they are employed in a capacity other than as an EMS personnel member. For Reserve Peace Officers: ● Must be a volunteer, non-regular, sworn member of a law enforcement agency who serves with or without compensation, has regular police powers while functioning as a law enforcement agency’s representative, and participates on a regular basis in the law enforcement agency’s activities including crime prevention and control, preservation of the peace, and enforcement of the law. ● Must have met the minimum training standards established by the Iowa Law Enforcement Academy. ● A person who volunteers as a reserve peace officer, for a department by which they are employed, is eligible for the credit if they are employed in a capacity other than as a peace officer. Amount of the Tax Credit The tax credit equals $250 if the volunteer serves for the entire calendar year. If the volunteer does not serve the entire year, the $250 credit will be prorated based on the number of months that the volunteer served, rounded to the nearest dollar. If the volunteer served for a portion of a month, that will be considered as an entire month. The table below provides the qualifying amount of tax credit by months of service for the year. Number of Months of Service Amount of Tax Credit Number of Months of Service Amount of Tax Credit 1 $21 7 $146 2 $42 8 $167 3 $63 9 $188 4 $83 10 $208 5 $104 11 $229 6 $125 12 $250

If an individual serves in more than one position at the same time as a volunteer firefighter, volunteer EMS personnel, and/or reserve peace officer, the credit can only be claimed for one volunteer position. Written Statement Requirements Taxpayers claiming the tax credit are required to have a written statement from the fire chief, the chief of police, sheriff, commissioner of public safety, or other appropriate supervisor verifying that the individual was a volunteer for the number of months that are being claimed. These letters do not have to be included with a filed return, but must be produced by the taxpayer upon request by the Iowa Department of Revenue. It is recommended that the statement contain the following information: Volunteer Name, Fire Department or EMS Service Name or Police Department, Number of Months of Service for the Year, Amount of Qualifying Credit, and the Name, Title, and Signature of the official authorizing the credit. Recordkeeping Recommendations It is recommended that volunteer fire departments, EMS services, or police departments maintain a record of the letters that are authorized in the event that the Department requests a list of authorized credit recipients. It is recommended that these lists be kept for at least 10 years. 17

Married Separate Filers: This credit must be taken by the spouse who qualifies. Any unused part of this credit cannot be used by the other spouse. Total Credits Line: 11 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Add lines 8, 9, and 10. Balance Line: 12 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Subtract line 11 from line 7. If less than zero, enter zero. Tax Reduction Single taxpayers, who are not claimed as a dependent on another person's Iowa tax return, may owe less tax by using the Income Tax Reduction Worksheet (41-146). Credit for Nonresident or Part-Year Resident Line: 13 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Nonresidents or Part-Year Residents: A nonresident or part-year resident of Iowa must complete the IA 1040, lines 1 through 12 prior to completing the IA 126. The nonresident or part-year resident then completes a Schedule IA 126. On the IA 126, only Iowa income is reported and a percentage of Iowa income to total income is determined. The taxpayer receives a credit against the initial tax liability based on the percentage of income from outside Iowa. Therefore, the result of this credit is that only Iowa-source income is taxed. NOTE: The Iowa income percentage is rounded to the nearest ten-thousandth of a percent in accordance with Iowa Administrative Code rule 701—304.5. The final credit from this form is used to reduce the total tax on your IA 1040. Although non-Iowa income is used to calculate the initial tax liability, the non-Iowa income itself is not subject to tax. By using this method, Iowa taxes the Iowa-source income of nonresidents and part-year residents at the same rate it taxes Iowa residents. Enter the amount of your nonresident or part-year resident tax credit from Schedule IA 126, line 34. A copy of Schedule IA 126 and a copy of your federal return must be included.

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General instructions for completing the IA 126: Part-Year Iowa Residents: Iowa-source net income includes all income received while living in Iowa plus any Iowa-source income received while a nonresident. Part-Year Resident Example: Michael lived and worked in Iowa the first six months of the tax year. In addition to Michael’s wages, Michael received interest income from an Iowa bank. Michael then permanently moved to Missouri, where Michael was employed for the rest of the year. Michael continued to receive interest income from the Iowa bank. Michael’s IA 1040, line 1, will report all of the income from both states as all-source income. On the IA 126, Michael will report the wages and interest income earned while an Iowa resident as Iowa-source income. The interest income earned the last half of the year is not considered Iowa-source income since Michael was no longer an Iowa resident. Nonresidents: Iowa-source net income will include all income from Iowa sources. Complete IA 126, lines 1 through 13 using only income from Iowa sources. Nonresident Example 1: Nick is a resident of Nebraska and works in Iowa. Nick’s income includes wages earned in Iowa and interest income from a Nebraska bank. Nick will report the wages and interest on the IA 1040 as all-source income. Nick will list only the Iowa wages on the IA 126 as Iowa-source income. Iowa has a reciprocal agreement with Illinois, which means that wages and salaries are taxed by the individual’s state of residence. All income received from other Iowa sources (gambling, unemployment, etc.) is taxable to Iowa regardless of the person’s state of residence. Nonresident Example 2: Tiana is a resident of Illinois. Tiana earned $25,000 in wages from Iowa and won $5,000 at an Iowa casino. Tiana will report income from all sources on the IA 1040. Only the gambling winnings will be reported on the IA 126 as Tiana’s Iowa-source income. Full-Year Residents (married jointly filers check the corresponding box if one spouse is a full-year Iowa resident) For married taxpayers, if one spouse is a full year Iowa resident, the full year Iowa resident must include all of that spouse’s income from the IA 1040. Married Separate Filers: Divide your Iowa income between spouses using the instructions on each line of the IA 126 below for married separate filers. Reporting Modifications to Iowa Source Income If any income claimed on lines 1-12 are modified by any amounts claimed on IA 1040, Schedule 1, lines 1-11, net out those modifications directly on each applicable line. (Example: if you have Iowa-source wages of $50,000 but all wages were active duty military pay, and you claimed the active duty military pay modification on IA 1040, Schedule 1, line 6; enter $0 on IA 126, line 1). An exception would be K-1 Modifications listed on IA Schedule 1, line 3. See line 12 instructions for more information. 1. Wages, Salaries, Tips, etc. Part-year residents: Include all W-2 income earned or received while an Iowa resident, even if it was earned in another state, and any income for services performed in Iowa while a nonresident of the state. If it was earned 19

in another state, you may also need to fill out the IA 130 if you pay tax to the other state. You will need to check with that state for their filing requirements. Nonresidents: Report only Iowa-source income. If the portion of employee compensation earned in Iowa by a nonresident is not reported separately, allocate the compensation based upon the number of days worked in Iowa to total work days. Nonresidents who earned compensation in Iowa and one or more other states for a railway company, an airline company, a merchant marine company, or an interstate motor carrier are only subject to income tax on that income in their state of residence and should not include these wages on line 1. 2. Taxable Interest Income Part-year residents: Report all taxable interest which accrued while an Iowa resident and any interest received while a nonresident which was derived from a trade, business, or profession carried on within Iowa. Nonresidents: Report only the interest derived from a trade, business, or profession carried on within Iowa. 3. Ordinary Dividend Income Part-year residents: Report all dividends received while an Iowa resident and any dividends received while a nonresident which were derived from a trade, business, or profession carried on within Iowa. Nonresidents: Report the dividends derived from a trade, business, or profession carried on within Iowa. 4. Taxable Alimony Received Part-year residents: Report all taxable alimony or separate maintenance payments received while an Iowa resident. Nonresidents: Do not enter anything on this line. 5. Business Income or (Loss) Part-year residents: Report the amount of business income or loss from federal Schedule 1, line 3 earned while an Iowa resident, and report any portion of the total business income or loss earned while a nonresident using the instructions for nonresidents given below. Nonresidents: Report the portion of business income or loss from federal Schedule 1, line 3 attributable to a trade, business, or profession carried on within Iowa. Include a supporting schedule showing Iowa gross receipts divided by total gross receipts for each business; multiply this ratio times the total net income from the corresponding business. A sale of goods is considered an Iowa sale if goods are delivered or shipped to a point within the state regardless of Freight on Board (F.O.B.) point. A sale of a service is considered an Iowa sale if the recipient of the service receives the benefit of the service in Iowa. 6. Capital Gain or (Loss) Part-year residents: Include 100% of the capital gain or loss from assets sold while an Iowa resident. In addition, capital gain or loss from assets sold while a nonresident of Iowa should be reported on the basis of the instructions for nonresidents that follow. Nonresidents: Include in Iowa income 100% of capital gain or loss from the following: a. Sales of real or tangible personal property if the property was located in Iowa at the time of the sale; or b. Sales of intangible personal property if the taxpayer’s commercial domicile is in Iowa. NOTE: You may have an Iowa-source gain even if you have a net loss on the federal return. 20

7. Other Gains or (Losses) Part-year residents: Report 100% of gains or losses from assets sold or exchanged while an Iowa resident and any gains or losses while a nonresident if the property was located in Iowa at the time of sale or exchange. Nonresidents: Report any gains or losses reported if the property was located in Iowa at the time of sale or exchange. NOTE: You may have an Iowa-source gain even if you have a net loss on the federal return. 8. Rents, Royalties, Partnerships, Estates, etc. Part-year residents: Report the amount of rents, royalties, and income from partnerships or estates from federal Schedule 1, line 5 which was earned or received while an Iowa resident, and report any portion of the total income earned or received while a nonresident using the instructions for nonresidents below. Nonresidents: Report all rents and royalties from federal Schedule 1, line 5 from Iowa sources. Report the portion of partnership or S corporation income or loss from federal Schedule 1, line 5 attributable to business conducted in Iowa. Include a supporting schedule for the business calculated in the same manner as the instructions for nonresidents given for line 5 above. 9. Farm Income or (Loss) Part-year residents: Report all net farm income from federal Schedule 1, line 6 earned or received while an Iowa resident. Also report all net income from Iowa farm activities while a nonresident using the instructions for nonresidents given below. Nonresidents: Report the total net income from federal Schedule 1, line 6 from Iowa farm activities. If farm activities were conducted both within and without Iowa, provide a separate schedule showing allocation of the income and expenses to Iowa. 10. Unemployment Compensation Railroad unemployment income: Prior to entering any income on line 10, subtract any amount of modification claimed on IA 1040, Schedule 1, line 8 that is attributable to Iowa. Part-year residents: Report all unemployment benefits received while an Iowa resident and those benefits received the rest of the year that relate to past employment in Iowa. Nonresidents: Report the unemployment benefits that relate to employment in Iowa. If the unemployment benefits relate to employment in Iowa and employment in another state, report the benefits to Iowa in the ratio of Iowa salaries and wages to total salaries and wages. 11. Gambling Winnings Part-year residents: Report any gambling winnings which were received while an Iowa resident or income from Iowa sources while a nonresident. Do not include any losses from gambling. Nonresidents: Report all gambling winnings from Iowa sources. Do not include any losses from gambling. 12. Other Income Part-year residents: Report any other income including income on IA 1040 Schedule 1, lines 9 and 11, which was earned in Iowa or received while an Iowa resident. This includes any federal nonconformity adjustments including the depreciation/section 179 adjustment from the IA 4562A. This also includes non-exempt pension, annuity, and IRA income received while an Iowa resident. Report IA source K-1 modifications from IA 1040 Schedule 1, line 3 on this line using code “ee”. 21

Nonresidents: Report all other income from IA 1040, Schedule 1, lines 9 and 11 from Iowa sources. This includes the bonus depreciation and section 179 adjustment attributable to Iowa from the IA 4562A. Where this other income or adjustment relates to income allocated to Iowa on another line of this form, include such other income or adjustments in the same ratio as the income to which it relates was allocated to Iowa. Report the Iowa-source amount of your IA K-1 modifications from IA 1040 Schedule 1, line 3, and Iowa allocated income from your IA 1065 K-1, line 20(b), or IA 1120S K-1, line 17(b), on this line using code “ee”. 13. Iowa-Source Gross Income Add lines 1-12 14. Federal Total Income from IA 1040, line 1a Enter federal total income from IA 1040, line 1a. 15. Iowa Modifications to Federal Total Income Enter the amount of Iowa modifications to federal total income reported on IA 1040 Schedule 1, line 13, less the amount of federal net operating loss reported on IA 1040, Schedule 1, line 10. 16. Total Add lines 14 and 15. 17. Payments to an IRA, KEOGH, or SEP Column A: Enter all-source modifications from federal Schedule 1, lines 16 and 20. Column B: Deduct payments made to an IRA, Keogh, or Simplified Employment Plan (SEP) plan: ● Part-year residents: while an Iowa resident. ● Nonresidents: Do not report anything in Column B. 18. Deductible Part of Self-Employment Tax Column A: Enter all-source modifications from federal Schedule 1, line 15. Column B: Deduct the portion of the self-employment tax: ● Part-year residents: attributable to the self-employment income earned while an Iowa resident. ● Nonresidents: in the ratio of your Iowa self-employment income to your total self-employment income. 19. Health Insurance Deduction Column A: Enter the total of any amounts from IA 1040, Schedule 1, line 15 and federal form 1040, Schedule 1, line 17. Column B: Enter 100% of the health insurance premiums: ● Part-year residents: ○ paid by a self-employed individual while an Iowa resident, ○ not withheld from your wages on a pretax basis while an Iowa resident, or ○ that you paid while an Iowa resident. ● Nonresidents: ○ paid by a self-employed individual in the ratio of Iowa self-employment income to total self-employment income, or ○ not withheld from your wages on a pretax basis in the ratio of Iowa wages to total wages. 22

20. Penalty on Early Withdrawal of Savings Column A: Enter all-source modifications from federal schedule 1, line 18. Column B: Deduct the amount of any penalty you were charged because you withdrew funds from your time savings deposit before its maturity: ● Part-year Residents: while an Iowa resident or what was derived from an Iowa trade, business, or profession. ● Nonresidents: that was derived from an Iowa trade, business, or profession. 21. Alimony Paid Column A: Enter all-source modifications from federal Schedule 1, line 19a Column B: Deduct alimony paid: ● Part-year residents: while an Iowa resident. ● Nonresidents: Do not report anything in Column B. 22. College Savings Iowa or Iowa Advisor 529 Education Savings Plan Enter amount from IA 1040, Schedule 1, line 14 in Columns A and B. 23. Iowa Capital Gain Deduction Enter amount from IA 1040, Schedule 1, line 14 in Columns A and B 24. Farm Tenancy Income Exclusion Enter amount from IA 1040, Schedule 1, line 18 in Columns A and B. 25. Other Adjustments Column A: Enter amounts from IA 1040, Schedule 1, line 19 and any other federal adjustments from federal Schedule 1, Part II, prior to the calculation of federal adjusted gross income (federal form 1040, line 11) not taken elsewhere on the IA 126 (other adjustment code ‘dd’). Column B: Of the amounts on Column A, deduct miscellaneous adjustments to income in the same ratio as the income to which the adjustment relates was allocated to Iowa. NOTE: Any deductions from federal form 1040, Schedule 1-A (such as no tax on tips, overtime, or car loan interest; or the enhanced deduction for seniors) should not be claimed as an adjustment on IA 126. 26. Total Adjustments Add lines 17-25 27. Iowa-Source Net Income Subtract line 26, column B from line 13 and enter the difference on this line. If line 27 is $1,000 or more, or if you are subject to Iowa lump-sum tax, complete lines 28 through 34. If line 27 is less than $1,000 and you are not subject to Iowa lump-sum tax, you are not required to file an Iowa income tax return and are exempt from Iowa tax. Married taxpayers filing separately must combine their Iowa income amounts for purposes of the $1,000 filing threshold. If you had Iowa tax withheld and are requesting a refund, or you choose to file an Iowa return even if you are not required to do so, enter 100% on line 30, complete the remainder of the schedule, and enter the credit amount on the IA 1040, line 13. 23

28. All Source Net Income Subtract line 26, column A from line 16. 29. Iowa Income Percentage Divide line 27 by line 28. Enter percentage rounded to the nearest ten-thousandth of a percent (e.g. 12.3456%).This can be no more than 100.0% and no less than 0.0% 30. Nonresident or Part-year resident credit percentage Subtract the percentage on line 29 from 100.0%. Enter percentage rounded to nearest ten-thousandth of a percent (e.g. 12.3456%). 31. Iowa tax on total income from IA 1040 Enter the amount from IA 1040, line 5. 32. Total Credits from IA 1040 Enter the amount from IA 1040, line 11. 33. Tax After Credits Subtract line 32 from line 31. Single taxpayers (filing status 1) who used the Tax Reduction Worksheet to calculate the amount on IA 1040, line 12 should enter the amount from IA 1040, line 12 on the IA 126, line 33. 34. Nonresident or part-year resident credit. Multiply line 33 by the percentage on line 30. Enter this amount on IA 1040, line 13 Balance Line: 14 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Subtract line 13 from line 12. Out-of-State Tax Credit Line: 15 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions For additional information on the Iowa out-of-state tax credit, see Iowa Administrative Code rule 701—304.6. Who May Use the IA 130? Only Iowa residents or part-year residents with an income tax liability in another state, local jurisdiction outside of Iowa, or foreign country may reduce their Iowa tax liability by claiming an Iowa Out-of-State Tax Credit. Part-year residents of Iowa may claim this credit only if any income earned while an Iowa resident was also taxed by another state, local jurisdiction outside of Iowa, or foreign country. Only income included on the IA 126, and taxed by another state, local jurisdiction outside of Iowa, or foreign country, may qualify for this credit. Nonresidents of Iowa may NOT claim this credit. 24

Caution: Shareholders of S corporations who have income from the corporation that was apportioned outside Iowa through a claim to the IA 134 S Corporation Apportionment Tax Credit may NOT claim an out-of-state credit on this S corporation income. Filing Requirements Complete a separate IA 130 for each state, local jurisdiction outside of Iowa, or foreign country. Separate IA 130s are not required for foreign taxes paid by mutual funds or other regulated investment companies. The credit or portion of the credit must not exceed the amount of the Iowa tax imposed on the same income that was taxed by the other state, local jurisdiction outside of Iowa, or foreign country. When filing your IA 1040, include all IA 130 schedules, the income tax return you filed with the other state, local jurisdiction outside of Iowa, or foreign country, the supplemental schedule that was provided by your pass-through entity if you are claiming income taxes paid by your pass-through entity, and federal form 1116, Foreign Tax Credit, if you are claiming income taxes paid to a foreign country and it is required with your federal return. Married Filing Separate Filers If a taxpayer is married filing separately in Iowa but married filing jointly in another state, only the taxpayer’s portion of the income taxed by the other state may be used in calculating the out-of-state tax credit. The spouse’s income should be excluded from any amount of income reported on IA 130. Lump-Sum Distribution Tax Do not include any lump-sum distribution tax when computing this credit for regular income tax paid. You must compute this credit separately for regular income tax and special lump-sum distribution tax. For more information, see the special instructions for lump-sum distribution tax at the end of these instructions. Line Instructions for IA 130 Part 1: Iowa-Source Income Taxed by Another State or Jurisdiction 1. Wages, Salaries, Tips, Etc. Include all W-2 income earned or received while an Iowa resident and taxed in another state, local jurisdiction outside of Iowa, or foreign country. For Iowa residents with W-2 income from Illinois, see Iowa - Illinois Reciprocal Agreement. Married Separate Filers: W-2 income is reported by the spouse earning the income. 2. Taxable Interest Income Report all interest shown on the IA 1040 that accrued while an Iowa resident which was derived from a trade, business, or profession carried on outside of Iowa and taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Divide interest income based on ownership of the account or certificate. ● Jointly held: Divide equally between spouses. ● Held in the name of only one spouse: Allocate interest wholly to that spouse. 3. Dividend Income Report all dividends received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. 25

4. Alimony Received Report all taxable alimony or separate maintenance payments received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Reported by the spouse who received the alimony. 5. Business Income or (Loss) From the total business income or loss shown on the federal Schedule 1, line 3, report the amount earned while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Reported by the spouse deriving the income or loss. 6. Capital Gain or (Loss) Include 100% of the capital gain or loss from assets sold while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Taxpayers should report capital gain or loss as reported for federal tax purposes. 7. Other Gains or (Losses) Report 100% of gains or losses from assets sold or exchanged while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Divide gains or losses based on ownership of the asset sold or exchanged. 8. Rents, Royalties, Partnerships, Estates, Trusts, Etc. Report all income shown on federal Schedule E that was earned or received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Divide income or loss from Schedule E based upon ownership of the assets or business interest producing the income or loss, or the individual named as beneficiary. 9. Farm Income or (Loss) Report all net farm income earned or received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: Farm income must be reported by the spouse who claims it for self-employment tax purposes on the federal Schedule SE. If the other spouse claims a share of the farm income, then that spouse must attach a worksheet showing how that share was determined based on capital contribution, management and control, and services rendered. 10. Unemployment Compensation Report all unemployment benefits received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: If both spouses received unemployment benefits, each of the spouses should report the benefits received as shown on the 1099-G(s) for each spouse. 26

11. Gambling Winnings Report any gambling winnings that were received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country Married Separate Filers: The spouse to whom the income was paid must report that income. 12. Other Income Report any income on the IA 1040, Schedule 1, line 11 which was received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. This includes any federal nonconformity adjustments including the depreciation/section 179 adjustment from the IA 4562A. This also includes non-exempt pension, annuity, and IRA income received while an Iowa resident that was taxed in another state, local jurisdiction outside of Iowa, or foreign country. Married Separate Filers: The spouse to whom the income was paid must report that income. Modifications to partnership and S corporation income are allocated between spouses in the same manner as that income was divided on IA 1040, line 1. 13. Iowa Gross Income Taxed by Another Jurisdiction Add lines 1 through 12. Part II: Calculation of Credit 14. Federal Total Income - Enter amount from IA 1040, line 1. 15. Iowa Modifications to Federal Total Income - Enter amount from IA Schedule 1, line 13, less federal net operating loss from IA 1040, Schedule 1, line 10. 16. Total Iowa Income - Add lines 14 and 15 (or IA 126, line 13 for part-year residents). 17. Divide line 13 by line 16 and enter the percentage rounded to the nearest ten-thousandth of a percent (e.g. 12.3456%). Do not exceed 100.0%. 18. Amount from IA 1040, line 14. 19. Multiply line 18 by the percentage on line 17. 20. Enter the income tax imposed by the other state or jurisdiction, paid by you on income included on line 13. Enter the income tax actually shown due and paid by you as calculated from the tax formula/tables on the other state, local jurisdiction outside of Iowa, or foreign country's tax return you filed, less any nonrefundable credits, and less any refundable credit provided to you for entity-level taxes paid by a pass-through entity (see example for line 21 below). This is not the amount withheld from your wages or paid as estimated income tax payments, and does not include taxes deemed to be paid to another jurisdiction for purposes of computing the federal foreign tax credit on your federal form 1116. Caution: Do not include on this line any income tax paid on any income from an S corporation if you are claiming an IA 134 S Corporation Apportionment Tax Credit for that S corporation. 21. Enter the income tax imposed by the other state or jurisdiction and paid by your pass-through entity or mutual fund on income included on line 13. If your distributive share of income from a pass-through entity was taxed by another state, local jurisdiction outside of Iowa, or foreign country but reported on a composite return, or if a pass-through entity was subject to an entity-level income tax in another state, local jurisdiction outside of Iowa, or foreign country on your 27

distributive share of income also taxed by Iowa, your pro-rata share of this income tax will be identified on a schedule provided to you by your pass-through entity. Enter your reported pro-rata share of the income tax on this line. This will be your pro-rata share of the income tax actually shown due and paid by the pass-through entity as calculated from the tax formula/tables on the other state, local jurisdiction outside of Iowa, or foreign country’s tax return filed by the pass-through entity, less any nonrefundable credits. This is not the amount withheld or paid as estimated income tax payments. However, if you receive a refundable tax credit in the other state, local jurisdiction outside of Iowa, or foreign country for all or part of the entity-level income tax paid by a pass-through entity, the amount of the refund attributable to that refundable credit reduces the income tax paid by the pass-through entity. Example: Individual B, a 50% owner of Partnership P doing business in State Z, receives a statement from Partnership P showing that P paid $500 of entity-level income tax to State Z, and B’s pro-rata share of that income tax is $250. B also received a $250 refundable tax credit from State Z for B’s share of the entity-level income tax paid by partnership P. B files an income tax return in State Z to report their pro-rata share of income from Partnership P and calculates tentative income tax of $200. B applies their $250 refundable tax credit against that tentative income tax, resulting in an income tax liability of $0 and a refund of $50. Therefore, B enters $0 on IA 130, line 20, and must also reduce their pro-rata share of the entity-level income tax paid by partnership P by $50 as reported on line 21. B enters $200 ($250 - $50) on line 21. If you do not receive a schedule from your pass-through entity reporting your pro-rata share of composite return or entity-level income taxes paid to the other state, local jurisdiction outside of Iowa, or foreign country, you are not eligible to claim the Iowa Out-of-State Tax Credit. Include a copy of that schedule with your IA 1040. If your mutual fund or other regulated investment company paid foreign income tax and passed the amount through to you, your share of this income will be identified on the Form 1099-DIV or similar statement provided to you. If you do not receive such a form or statement, you are not eligible to claim the Iowa Out-of-State Tax Credit. Caution: Do not include on this line any income tax paid by an S corporation, or reported to you by an S corporation, if you are claiming an IA 134 S Corporation Apportionment Tax Credit for that S corporation. 22. Enter the sum of lines 20 and 21 Full-Year Residents (part-year residents skip) 23. Enter the smaller of lines 19 or 22 and enter this amount on IA 1040, line 15. This is your Out-of-State Tax Credit. Part-Year Residents 24. Enter the total amount of gross income taxed by the other state or jurisdiction. 25. Divide line 13 by line 24 and round to the nearest ten-thousandth of a percent (e.g. 12.3456%). Do not exceed 100.0%. 26. Multiply line 22 by the percentage on line 25. 27. Enter the smaller of lines 19 or 26 and enter this amount on IA 1040, line 15. This is your Out-of-State Tax Credit. Special Instructions for Lump-Sum Distribution Tax Compute Separately: If you were assessed a special tax on a lump-sum distribution by another state or local jurisdiction outside of Iowa on items similarly taxed on your Iowa return, you must complete a separate IA 130 for these items. Do not include a special lump-sum tax when computing the regular tax credit. Please write 28

“Lump-sum Tax” next to the amount on IA 130, line 18 and next to the state or other jurisdiction in the header of the form. Lump-sum Distribution: Enter $0 for IA 130, lines 1-11. Report on IA 130, lines 12 and 13 the amount of distribution subject to special lump-sum tax by Iowa and the other state or jurisdiction. Do not include a distribution taxed by the other state or local jurisdiction outside of Iowa as part of gross income. Report on IA 130, line 14 the total federal lump-sum distribution amount and enter $0 on IA 130, line 15. Report on IA 130, line 18 the Iowa lump-sum distribution tax from IA 1040, line 6. Report on IA 130, line 20 only the amount of tax imposed on the lump-sum distribution imposed by the other state or jurisdiction. For part-year residents, only enter the amount of the lump-sum distribution taxed by the other state or jurisdiction on IA 130, line 24. Complete the rest of the form as instructed on the form. NOTE: The below examples are abbreviated versions of the IA 130. You must fill out the entire IA 130 and include it with your return. Example 1: Full-Year Iowa Residents Only Terry lived in Iowa all year but worked in both Iowa and Nebraska. Terry earned $10,000 in Iowa, and also earned $15,000 in Nebraska that was taxed by Nebraska. Terry has no Iowa modifications from Schedule 1. Terry files as a single taxpayer and claims the standard deduction. 1. Iowa gross income taxed by another jurisdiction. (IA 130, line 13) $15,000 2. Total Iowa income. (IA 130, line 16) $25,000 3. Divide step 11 by step 2 and enter the percentage (not to exceed 100.0%) (IA 130, line 17) 60.0000% 4. Amount from IA 1040, line 14 (less lump sum tax)(IA 130, line 18) $311.12 5. Multiply step 4 by the percentage on step 3 (IA 130, line 19) $187 6. Enter the income tax imposed* by the other state, local jurisdiction outside of Iowa , or foreign country, and paid by you (IA 130, line 20) $250 7. Enter the income tax imposed** by the other state, local jurisdiction outside of Iowa, or foreign country, and paid by your pass-through entity or mutual fund (IA 130, line 21) $0 8. Enter the sum of steps 6 and 7 (IA 130, line 22) $250 9. Enter the lesser of step 5 or 8. This is your out-of-state tax credit. Enter this amount on IA 1040, line 15 $187 *“Tax imposed” is the income tax calculated from the tax formula/tables on the other state, local jurisdiction outside of Iowa, or foreign country's tax return, less any nonrefundable credits, and less any refundable credit for entity-level taxes paid by a pass-through entity. Do not reduce this figure by the tax withheld or estimated tax payment made to the other state, local jurisdiction outside of Iowa, or foreign country. **”Tax imposed” is your pro-rata share of the income tax of the pass-through entity calculated from the tax formula /tables on the other state, local jurisdiction outside of Iowa, or foreign country’s tax return filed by the pass-through entity, less any nonrefundable credits of the pass-through entity, and less any refund attributable to a refundable credit provided to you for entity level taxes paid by a pass-through entity. Do not reduce this figure by the tax withheld or estimated tax payment made to the other state, local jurisdiction outside of Iowa, or foreign country. 29

Example 2: Part-year Iowa Residents Only Bradley lived in Iowa until the end of June. On July 1, Bradley moved to Missouri. Bradley worked all year in the state of Missouri. They earned a salary of $30,000 for the year, $15,000 while residing in Iowa and $15,000 while residing in Missouri. Bradley also earned $10,000 farm rental income from farmland located in Iowa. Bradley has no Iowa modifications from Schedule 1. Bradley files as a single taxpayer and claims the standard deduction. 1. Iowa gross income taxed by another jurisdiction. (IA 130, line 13) $15,000 2. Total Iowa income. (IA 130, line 16) $25,000 3. Divide step 1 by step 2 and enter the percentage (not to exceed 100.0%) (IA 130, line 17) 60.0000% 4. Amount from IA 1040, line 14 (less lump sum tax) (IA 130, line 18) $881.50 5. Multiply step 4 by percentage on step 3 (IA 130, line 19) $529 6. Enter the tax imposed* by the other state, local jurisdiction outside of Iowa, or foreign country and paid by you (IA 130, line 20) $500 7. Enter the tax imposed** by the other state, local jurisdiction outside of Iowa, or foreign country and paid by your pass-through entity or mutual fund (IA 130, line 21) $0 8. Enter the sum of lines 6 and 7 (IA 130, line 22) $500 9. Enter the total amount of gross income taxed by the other state, local jurisdiction outside of Iowa, or foreign country. (IA 130, line 24) $30,000 10. Divide step 1 by step 9 and enter the percentage (not to exceed 100.0%) (IA 130, line 25) 50.0000% 11. Multiply step 8 by the percentage on step 10. (IA 130, line 26) $250 12. Enter the lesser of step 5 or 11. This is your out-of-state tax credit. Enter this amount on IA 1040, line 15. (IA 130, line 27) $250 *“Tax imposed” is the income tax calculated from the tax formula / tables on the other state, local jurisdiction outside of Iowa, or foreign country's tax return, less any nonrefundable credits, and less any refundable credit for entity-level taxes paid by a pass-through entity. Do not reduce this figure by the tax withheld or estimated tax payment made to the other state, local jurisdiction outside of Iowa, or foreign country. **”Tax imposed” is your pro-rata share of the income tax of the pass-through entity calculated from the tax formula/tables on the other state, local jurisdiction outside of Iowa, or foreign country’s tax return filed by the pass-through entity, less any nonrefundable credits of the pass-through entity, and less any refund attributable to a refundable credit provided to you for entity level taxes paid by a pass-through entity. Do not reduce this figure by the tax withheld or estimated tax payment made to the other state, local jurisdiction outside of Iowa, or foreign country.

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Balance Line: 16 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Subtract line 15 from 14. Other Nonrefundable Iowa Credits Line: 17 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Enter the total of the credits from Part I of the IA 148 Tax Credits Schedule. IA 148 Tax Credits Schedule (pdf) must be completed. Your credit claim may be denied if the IA 148 Tax Credits Schedule, or any other required tax credit schedule, is not included with your return. Agricultural Assets Transfer Tax Credit An Agricultural Assets Transfer Tax Credit is available for established farmers who lease agricultural assets to beginning farmers to claim against individual and corporation income tax. The agricultural asset transfer tax credit application must have been submitted to the Iowa Agricultural Development Division before May 21, 2019. The tax credit is only allowed for agricultural assets that are subject to a lease or rental agreement for a term of at least two years, but not more than five years. The taxpayer must meet certain qualifications as established by rules adopted by the Iowa Finance Authority. The beginning farmer must meet the requirements listed in Iowa Code section 16.80 (2019). The tax credit equals 5% of the amount paid to the taxpayer under a cash rent agreement or 15% of the crop share payments under an agreement in which the payment is exclusively made from the sale of crops or animals. A tax credit certificate is issued by the Iowa Agricultural Development Division of the Iowa Finance Authority that includes the tax credit certificate number which must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 17. Any tax credit in excess of tax liability, if awarded in tax year 2008 or later can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. A tax credit is not transferable to any other person other than the taxpayer's estate or trust upon the taxpayer's death. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. The lease or rental agreement may be terminated by either the taxpayer or the beginning farmer. If the Iowa Agricultural Development Division determines that the taxpayer is not at fault for the termination, the Division will not issue a tax credit certificate for subsequent years, but any prior tax credit certificates issued will be allowed. If the Division determines that the taxpayer is at fault for the termination, any prior tax credit certificates issued will be disallowed, and the tax credits can be recaptured by the Department of Revenue. Iowa Code sections 16.80 and 422.11M (2019) 31

Beginning Farmer Tax Credit For tax years beginning on or after January 1, 2019, a beginning farmer tax credit is available for established farmers who lease agricultural assets to beginning farmers. The tax credit is available to the established farmer against individual and corporation income tax. The tax credit is only allowed for agricultural assets that are subject to a lease or rental agreement for a term of at least two years, but not more than five years, and that meets certain requirements listed in Iowa Code section 16.79A, and in administrative rules adopted by the Iowa Finance Authority. The taxpayer and the beginning farmer must meet certain qualifications listed in Iowa Code section 16.79, and in administrative rules adopted by the Iowa Finance Authority. The tax credit equals 5% of the amount paid to the taxpayer under a cash rent agreement or 15% of the crop share payments under the agreement using the formula established in administrative rule by the Iowa Finance Authority. If the agreement is made on a flexible basis, the tax credit equals the same 5/15 percent calculation and an additional calculation may be made to the extent the rent payment is adjusted after taking into account all risk-sharing factors provided in the agreement. The Iowa Finance Authority will establish criteria for commonly used risk-sharing factors and adjustment limits. Applications and tax credit awards are reviewed by the Agricultural Development Board. Tax credit certificates issued by the Iowa Agricultural Development Division of the Iowa Finance Authority pursuant to a tax credit award include the tax credit certificate number which must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 17. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. A tax credit is not transferable to any other person other than the taxpayer's estate or trust upon the taxpayer's death. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the individual’s pro rata share of the income of the entity. The lease or rental agreement may be terminated by either the taxpayer or the beginning farmer. If the Iowa Agricultural Development Division determines that the taxpayer is not at fault for the termination, the Division will not issue a tax credit certificate for subsequent years, but any prior tax credit certificates issued will be allowed. If the Division determines that the taxpayer is at fault for the termination, tax credits claimed for the year during which the termination occurs will be disallowed and recaptured by the Department of Revenue. Iowa Code sections 16.77 through 16.82A, section 422.11E Charitable Conservation Contribution Tax Credit A Charitable Conservation Contribution Tax Credit is available for individual income and corporation income taxpayers equal to 50% of the fair market value of a qualified real property interest located in Iowa that is conveyed as an unconditional charitable donation in perpetuity by the taxpayer to a qualified organization exclusively for conservation purposes. The maximum amount of the credit is $100,000. The amount of the contribution for which the tax credit is claimed is not deductible as an itemized deduction for Iowa income tax purposes. The terms “conservation purpose,” “qualified organization,” and “qualified real property interest” mean the same as set forth in section 170(h) of the Internal Revenue Code. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following 20 years or until depleted, whichever is earlier. Taxpayers filing credit claims for the Charitable Conservation Contribution Tax Credit are required to include a copy of federal Form 8283 – Noncash Charitable Contribution with the Iowa return. If a qualified appraisal of the property or other relevant information is required to be included with the federal Form 8283 for federal 32

tax purposes, the appraisal and other relevant information must also be included with the Iowa return. The credit claimed must be reported on the IA 148 Tax Credits Schedule using tax credit code 20. Iowa Code section 422.11W Custom Farming Contract Tax Credit A Custom Farming Contract Tax Credit was available for landowners who hired a beginning farmer to do custom work during 2015-2017. A tax credit certificate was issued by the Iowa Agricultural Development Division of the Iowa Finance Authority that includes the tax credit certificate number which must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 24. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. If the tax credit was issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 16.78 through 16.82 and 422.11M (2017) Employer Child Care Tax Credit An Iowa Employer Child Care Tax Credit is available for taxpayers who qualified for the federal employer-provided child care tax credit authorized under Internal Revenue Code section 45F. The credit is equal to the proportion of the federal credit attributable to expenditures made in Iowa. The Iowa Economic Development Authority (IEDA) is responsible for evaluating credit applications and verifying eligibility. The Iowa Economic Development Authority will issue a tax credit certificate to qualifying taxpayers. Taxpayers must calculate their total amount of eligible credits by completing the IA 8882. This form must be submitted with the taxpayer’s return, including the tax credit certificate number provided by IEDA. The tax credit is repealed for tax years beginning on or after January 1, 2026. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. A tax credit awarded to a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed to the individual, shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 8882, line 22 and on the IA 148 Tax Credit Schedule using tax credit code 30 and the tax credit certificate number. Iowa Code sections 237A.31 and 422.12O Endow Iowa Tax Credit An Endow Iowa Tax Credit is equal to 25% of a taxpayer's endowment gift to a qualified community foundation. The gift must be for a permanent endowment fund established to benefit a charitable cause in Iowa. The Iowa Economic Development Authority is responsible for registering, authorizing, and controlling the distribution of these tax credits. The amount of the contribution cannot be taken as an itemized deduction for charitable contributions for Iowa income tax purposes. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. 33

A tax credit awarded to a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed to the individual, shall be claimed by the individual based on the pro rata share of the income of the entity. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 03. Iowa Code section 422.11H Farm to Food Donation Tax Credit A Farm to Food Donation Tax Credit can be claimed by a taxpayer who produces a food commodity and donates it to an Iowa food bank or an Iowa emergency feeding organization registered with the Iowa Department of Revenue. The donated food may not be damaged or out-of-condition and unfit for human consumption. A food commodity that meets the requirements for donated foods pursuant to the Federal Emergency Food Assistance Program satisfies this requirement. The tax credit can be claimed against individual and corporation income tax. The tax credit equals 15% of the value of the food commodities donated in the tax year, when valued according to the federal guidelines for charitable contribution of food under Internal Revenue Code section 170(e)(3)(C), or $5,000, whichever is less. The amount of the contribution for which the tax credit is claimed is not allowed as an itemized deduction for Iowa income tax. For a donation to be eligible, an Authorized Food Organization Receipt must be received from the food organization at the time of the donation. The taxpayer then must use those receipts to complete the IA 178 Farm to Food Donation Tax Credit Form and include that form with the taxpayer’s return. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 178, Part II Total, line 2 and on the IA 148 Tax Credit Schedule. Iowa Code section 422.11R Franchise Tax Credit Iowa imposes a franchise tax on all financial institutions. Therefore, the Franchise Tax Credit is allowed to avoid double taxation of income. If a financial institution, as defined in section 581 of the Internal Revenue Code, elects to file as an S corporation for federal income tax purposes and therefore have its income taxed directly to the shareholders, those shareholders qualify for a Franchise Tax Credit. The Franchise Tax Credit is also available to members of a financial institution organized as a limited liability company. The IA 147 (pdf) must be used to calculate the credit and included with the return. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 04. The amount of any unused tax credit may not be carried forward and must be reflected as expired on the IA 148 Tax Credits Schedule. Iowa Code section 422.11

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Geothermal Heat Pump Tax Credit This Tax Credit is not available for residential installations completed after December 31, 2023. Effective for installations between January 1, 2012 and December 31, 2016, and for installations between January 1, 2019 and December 31, 2023, a Geothermal Heat Pump Tax Credit was available for individual income taxpayers equal to 20% of the federal residential energy efficient property tax credit allowed for geothermal heat pumps provided in section 25D(a)(5) of the Internal Revenue Code for residential property located in Iowa. Beginning with 2019 installations, the geothermal tax credit was capped at $1 million total credits per year and is subject to award by the Iowa Department of Revenue. Tax credit applications must have been submitted to the Iowa Department of Revenue by May 1, 2024 or the application will be denied. For installations completed between 2012 and 2016, report the claim on the IA 148 Tax Credits Schedule using tax credit code 23. For installations completed between 2019 and 2023, the Iowa Department of Revenue issued tax credit certificates to approved applicants which have a unique certificate number. Tax credits must be reported on the IA 148 Tax Credits Schedule using tax credit code 23. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. Iowa Code section 422.11I (2018), Iowa Code section 422.12N Geothermal Tax Credit Effective for installations between January 1, 2017 and December 31, 2018, a Geothermal Tax Credit was available for individual income taxpayers equal to 10% of qualified expenditures on a geothermal heat pump on the taxpayer’s residence. The equipment must meet the federal energy star program requirements in effect at the time the expenditure is made. A Geothermal Tax Credit is available for individual income taxpayers equal to 10% of qualified expenditures on a geothermal heat pump on the taxpayer’s residence. The equipment must meet the federal energy star program requirements in effect at the time the expenditure is made. The IA 140 must be used to calculate the credit and included with the return. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 28. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. Iowa Code section 422.10A (2018) Historic Preservation Tax Credit - Nonrefundable A Historic Preservation Tax Credit is available for 25% of the qualified rehabilitation expenditures of eligible property in Iowa. This credit is administered by the Iowa Economic Development Authority and the State Historic Preservation Office. When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 05, if nonrefundable. Applications must be filed during a limited registration period and a scoring system is used to select rehabilitation projects eligible for Historic Preservation Tax Credits. However, credits for small projects defined as projects with qualified rehabilitation expenditures up to $750,000 can apply at any time. The project must be completed within 36 months of the date on which the project agreement was signed. The Historic Preservation Tax Credit can be transferred to any person or entity. Awardees or transferees can choose to receive the award as a nonrefundable tax credit; in that case, the tax credit is claimed on the IA 148 using tax credit code 05. 35

If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. NOTE: For Iowa income tax purposes, the increase in the basis of the rehabilitated property that would otherwise result from the qualified rehabilitation costs will be reduced by the amount of the tax credit received. Iowa Code chapter 404A and Iowa Code section 422.11D Hoover Presidential Library Tax Credit A 25% tax credit is allowed for donations made to the Hoover Presidential Foundation for the Hoover Presidential Library and Museum Renovation Project Fund. The maximum amount granted to a person cannot exceed 5% of the aggregate amount of tax credits granted. 10% of the aggregate amount of tax credits authorized shall be reserved for those donations in amounts of $30,000 or less. The Iowa Economic Development Authority is responsible for registering, authorizing, and controlling the distribution of these tax credits. The amount of the contribution cannot be taken as an itemized deduction for charitable contributions for Iowa income tax purposes. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. A tax credit awarded to a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed to the individual, shall be claimed by the individual based on the pro rata share of the income of the entity. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 29. Iowa Code sections 15E.364 and 422.11T Housing Investment Tax Credit For taxpayers approved by the Iowa Economic Development Authority under the Housing Enterprise Zone Program, a Housing Investment Tax Credit is available equal to 10% of the new investment directly related to the building or rehabilitation of homes in an enterprise zone. The credit is based on a maximum of $140,000 for each single-family home or for each unit of a multiple dwelling. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 06. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. The program was eliminated effective July 1, 2014, and was replaced by the Workforce Housing Investment Tax Incentive Program. Innovation Fund Tax Credit An Innovation Fund Tax Credit equal to 25% of the taxpayer's equity investment in an innovation fund certified by the Iowa Economic Development Authority. The Iowa Economic Development Authority issues tax credit certificates including a tax credit certificate number, that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 25. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. The credit is transferable, but may only be 36

transferred once. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15E.52 and 422.11Z Investment Tax Credit An Investment Tax Credit of up to 10% of the qualifying investment in real property including any buildings and structures located on the real property, cost of machinery and equipment, and the cost of improvements to real property is available to an eligible business. An eligible business must be approved by the Iowa Economic Development Authority under the High Quality Jobs Program. When the tax credit is awarded, the taxpayer receives a tax credit certificate with five tax credit certificate numbers that must be reported separately on the IA 148 Tax Credits Schedule when each tax credit is claimed using tax credit code 07. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.326 through 15.337 and 422.11F(2) MEGA Nonrefundable Investment Tax Credit A tax credit of up to 5% of the qualifying investment made under a Major Economic Growth and Attraction (MEGA) Program project that has been approved by the Iowa Economic Development Authority is available to an eligible business. When the tax credit is awarded, the taxpayer receives a tax credit certificate with five tax credit certificate numbers that must be reported separately on the IA 148 Tax Credits Schedule when each tax credit is claimed using tax credit code 31. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.490 through 15.501 New Jobs Tax Credit A new business or an existing business that has increased employment by at least 10% and has a 260E job training agreement with a community college, may qualify for a New Jobs Tax Credit. The credit can be claimed one time for each new job created as a result of the 260E contract or jobs directly related to those jobs in a tax year when the contract is active and the job growth requirement is met. The New Jobs Tax Credit equals the smaller of 6% of the taxable wages that the employer is required to contribute to the State unemployment compensation fund or 6% of the wages paid to the employees in the eligible jobs. Compute this credit on form IA 133 and include that form with the IA 1040. When the 260E contract is signed, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the New Jobs Tax Credit is claimed using tax credit code 08. For 2025, this tax credit equals up to $2,370 ($39,500 maximum wages times 6% [.06]) for each job created. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers 37

receiving the credit from a pass-through entity should report the credit on the IA 133, line 11 and on the IA 148 Tax Credit Schedule. Iowa Code section 422.11A Redevelopment Tax Credit A Redevelopment Tax Credit equals a percentage of the qualifying investment in redeveloping a brownfield or grayfield site. A brownfield site is defined as an abandoned, idled, or underutilized industrial or commercial facility where expansion or redevelopment is complicated by real or perceived environmental contamination. A grayfield site is defined as a property that has been developed and has infrastructure in place but the property's current use is outdated or prevents a better or more efficient use of the property. Such property includes vacant, blighted, obsolete, or otherwise underutilized property. A higher tax credit rate is available if the redevelopment meets established “green development” standards. Projects must first apply to the Iowa Economic Development Authority to be considered for an award allocation during the annual application process. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 21. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. The Redevelopment Tax Credit can be transferred to any person or entity. Non-profit applicants can receive a refundable, but nontransferable, tax credit, in that case the tax credit is claimed on the IA 148 using tax credit code 67. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. NOTE: For Iowa income tax purposes, the increase in the basis of the redeveloped property that would otherwise result from the qualified redevelopment costs will be reduced by the amount of the tax credit received. Iowa Code sections 15.291,15.293A, 15.293B, 15.294, and 422.11V Renewable Energy Tax Credit A producer or purchaser of renewable energy from a facility approved by the Iowa Utilities Board is entitled to a Renewable Energy Tax Credit equal to 1.5 cents per kilowatt hour of electricity, or $4.50 per million BTUs of heat, refuse-derived fuel, methane gas, or other biogas; or $1.44 per 1,000 standard cubic feet of hydrogen fuel. The facilities approved cannot exceed 363 megawatts of nameplate generating capacity related to wind energy facilities, 63 megawatts of capacity for all other facilities, and 167 billion BTUs of heat related to other facilities. Of those 63 megawatts, 10 megawatts are reserved for solar facilities contracted or owned by certain utility companies. Small wind energy systems operating in a small wind innovation zone are eligible for the renewable energy tax credit of 1.5 cents per kilowatt-hour of electricity. The small wind energy system must have a nameplate generating capacity of 100 kilowatts or less. A political subdivision of the state of Iowa, including but not limited to a city, county, township, school district, community college, area education agency, institution under the control of the state board of regents, or any other local commission, association, or tribal council can seek approval from the Iowa Utilities Board to set up a small wind innovation zone. When the tax credit is awarded by the Iowa Department of Revenue, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed 38

using tax credit code 10. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. The credit can be transferred to any person or entity one time. A producer or purchaser can receive the tax credit certificates for a ten-year period beginning the date the purchaser first purchases eligible energy or the date the producer first uses the energy for on-site consumption. Iowa Code chapter 476C and Iowa Code sections 422.11J and 476.48 S Corporation Apportionment Tax Credit Individual resident shareholders of S corporations that conduct business within and without Iowa can claim an S Corporation Apportionment Tax Credit. The tax credit is structured so that the S corporation is taxed on the greater of income attributable to Iowa under the single sales factor or actual distributions by the S corporation less federal income tax. If the taxpayer chooses to apportion income using the S Corporation Apportionment Tax Credit, the Out-of-State Tax Credit cannot be claimed for any taxes paid on income received from that S corporation. Complete form IA 134 (pdf) and include with the IA 1040. Report the claim on the IA 148 Tax Credits Schedule using tax credit code 11. The amount of any unused tax credit may not be carried forward and must be reflected as expired on the IA 148 Tax Credits Schedule. Iowa Code section 422.8(2)(b) School Tuition Organization Tax Credit A School Tuition Organization Tax Credit is equal to 75% of the amount of a contribution made by a taxpayer to a school tuition organization. The amount of the contribution cannot be taken as an itemized deduction for charitable contributions for Iowa income tax purposes. A school tuition organization must be a charitable organization in Iowa that is exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code that allocates at least 90% of its annual revenue in tuition grants for children who reside in Iowa to allow them to attend a qualified school of their parents' choice. The contribution cannot be used for the direct benefit of any dependent of the taxpayer or any other student designated by the taxpayer. When the tax credit is awarded by a school tuition organization, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 12. The tax credit shall be claimed in the tax year during which the contribution is made. Any tax credit in excess of the tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Married taxpayers who file separate returns or separately on a combined return must allocate the tax credit between the spouses in the ratio of each spouse’s net respective net income to the combined net income of the taxpayers. NONRESIDENTS AND PART-YEAR RESIDENTS Special rules apply to nonresidents and part-year residents, including those who are claiming a tax credit of a partnership, limited liability company, S corporation, estate, or trust of which they are a member. Nonresidents or part-year residents of Iowa must determine their tax credit in the ratio of their Iowa-source net income to their all source net income. Nonresidents or part-year residents who are married and elect to file separate returns or to file separately on a combined return must allocate the tax credit between the spouses in the ratio of each spouse’s Iowa-source net income to the combined Iowa-source net income of the taxpayers. For more specific information see Iowa Code section 422.11S(4). 39

Nonresidents and part-year residents must adjust the school tuition organization tax credit using the following steps: 1. Divide Iowa net income (IA 126, line 27) by all-source net income of you and spouse (IA1040, line 26). 2. Multiply Step 1 above by the amount of tax credit shown on the tax credit certificate. 3. Enter this amount in column D on Part I of the IA 148. 4. Enter the difference between the award and what was entered in column D into column G; this amount of the tax credit is considered expired in the tax year of the award and cannot be claimed. Iowa Code section 422.11S Solar Energy System Tax Credit This Tax Credit is not available for residential installations completed after December 31, 2021. A Solar Energy System Tax Credit was available for the installation costs of solar energy systems in Iowa. In order to claim the tax credit, an application had to be completed by May 1, 2022 and a tax credit certificate had to be received from the Iowa Department of Revenue. For business installations, the Solar Energy System Tax Credit is equal to 50% of the federal energy property tax credit related to solar energy equipment in section 48(a)(2)(A)(i)(II) of the Internal Revenue Code. The Iowa tax credit for business installations cannot exceed $20,000. The federal business credit, and thus the Iowa business credit, is available for property if construction begins on the property before January 1, 2022. The federal business credit is claimed on federal form 3468, Investment Credit. When the tax credit is awarded by the Iowa Department of Revenue, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 22. Any tax credit in excess of tax liability may be carried forward and applied against tax liability for the following ten years or until depleted, whichever is earlier. If the tax credit is awarded to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers who claim this credit are not eligible to receive an award of a Renewable Energy Tax Credit for solar energy production under Iowa Code chapter 476C. Iowa Code sections 422.11L and 476C.2 Third Party Developer Tax Credit Taxpayers who are approved by the Iowa Economic Development Authority under the High Quality Jobs Program can be awarded a Third Party Developer Tax Credit for certain sales taxes paid in completion of a High Quality Jobs Program project. When the tax credit is awarded, the taxpayer must submit an application to the Department of Revenue within one year of project completion date. Upon approving the claim, the Department of Revenue issues another tax credit certificate for the final amount of credit that can be claimed based on the submitted contractor’s statements and invoices, up to the award amount as either a refundable or nonrefundable credit, based on the designation requested by the taxpayer. The taxpayer then claims the credit using its tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 46 or 47 (see certificate for which code applies). Any tax credit in excess of tax liability may be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. 40

If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. For High Quality Jobs Program agreements under Iowa Code section 15.330 entered into on or after January 1, 2023, taxpayers claiming the tax credit must also complete Part V, section A of the IA 148 Tax Credit Schedule before completing Part I of the IA 148. Wind Energy Production Tax Credit A Wind Energy Production Tax Credit is equal to one cent per kilowatt-hours of electricity sold or used for on-site consumption by a wind energy production facility approved by the Iowa Utilities Board. Approved facilities must have been placed in service on or after July 1, 2005, but before July 1, 2012, to qualify for the tax credit and the aggregate of approved facilities are limited to 50 megawatts of nameplate capacity. For applications filed on or after March 1, 2008, the facility must also consist of one or more wind turbines connected to a common gathering line which has a combined nameplate capacity of no less than two megawatts and no more than 30 megawatts. When the tax credit is awarded by the Iowa Department of Revenue, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 16. The Wind Energy Production Tax Credit is transferable. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following seven years or until depleted, whichever is earlier. In cases where the applicant is a partnership, limited liability company, S corporation, estate, trust, or other reporting entity which elects to have income taxed directly to an individual and the applicant is also eligible to receive renewable electricity production tax credits authorized under section 45 of the Internal Revenue Code, the credit does not have to be based upon the individual's pro rata share of earnings from the entity. Iowa Code chapter 476B and Iowa Code section 422.11J Workforce Housing Investment Tax Credit The Workforce Housing Tax Incentives Program replaced the Housing Enterprise Zone Program effective July 1, 2014, offering a tax credit on investment in housing related to acquisition, repair, or redevelopment of a housing project, or related to new construction of housing in a distressed workforce housing community. The project must be approved by the Iowa Economic Development Authority prior to investment. The Workforce Housing Investment Tax Credit award is limited to 10% of $150,000 for each home or individual unit that is part of the housing project, or 20% of such amount if the housing project is located in a small city or certain declared disaster areas. The program contains other requirements related to qualifying housing projects and maximum tax incentives. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 27. Any tax credit in excess of tax liability can be carried forward and applied against tax liability for the following five years or until depleted, whichever is earlier. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. The Workforce Housing Investment Tax Credit is transferable to any person or entity. NOTE: For Iowa income tax purposes, the increase in the basis of the housing property that would otherwise result from the qualified investment will be reduced by the amount of the tax credit received. Iowa Code sections 15.351 through 15.356 and 422.11C 41

Balance Line: 18 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Subtract line 17 from line 16. School District Surtax / Emergency Medical Services Tax Line: 19 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contribution School District Surtax School District Surtax / EMS table (41-027) The applicable school district is the one in which you resided on the last day of the tax year (12/31/2025 for calendar-year filers), not necessarily the district where your children attend school. Taxpayers without children, or without children in public school, are still subject to this tax. Your school district may not be the same as the name of your town. If you do not know your school district name, you can find it on your voter registration card, or by going to tax-mapper.iowa.gov and using the “school surtax” option. Multiply the amount on line 18 by the surtax rate and enter the result. Residents of school districts that do not have a surtax should enter zero on line 19. Emergency Medical Services (EMS) Surtax Counties may impose a countywide Emergency Medical Services (EMS) income surtax. At this time, Appanoose, Cass, Pocahontas, Sac, Shelby, and Winnebago are the only counties that have an EMS surtax. The EMS surtax is included in the school district surtax table. Total State and Local Tax Before Contributions Line: 20 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contribution Add lines 18 and 19. Contributions Line: 21 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Enter your voluntary contributions to any of the following checkoffs on line 21. Please note that you may contribute to any of the checkoffs regardless of whether you are entitled to a refund or owe additional taxes, but your contribution will reduce your refund or add to the amount you owe. Your contribution will qualify as a charitable contribution on your 2026 return if the 2025 return is filed during the 2026 calendar year. If you file an amended return, you cannot change your original contribution. 42

Fish/Wildlife Fund - Chickadee Checkoff You may contribute any amount to the Iowa Fish and Wildlife Protection Fund. Your contribution through this checkoff is the primary support for Iowa's Wildlife Diversity Program which monitors, researches, and manages the state's nongame species of wildlife. According to the Natural Resource Commission policy, 100% of the money donated to this program goes to the Wildlife Diversity Program. Learn more at Iowa DNR Wildlife. Child Abuse Prevention Fund You may contribute any amount of $1 or more to the Child Abuse Prevention fund. Your contributions will go to support the Iowa Child Abuse Prevention Program, which funds crisis and respite child care, parent education, child sexual abuse prevention programs, and young parent support. Learn more at Check Off Child Abuse. Total State and Local Tax and Contributions Line: 22 Step: 5 Step Subject: Tax, Non-refundable Credits, and Check-off Contributions Add lines 20 and 21 and enter the total on line 22

Step 6 Fuel Tax Credit Line: 23 Step: 6 Step Subject: Refundable Credits and Payment Enter the amount of Fuel Tax Credit from IA 4136, line 9. The federal form 4136 cannot be used. The Iowa credit does not apply to fuel used in on-road vehicles or pleasure boats. Iowa Fuel Tax Refund Permit Number If the taxpayer has filed a fuel tax refund claim during the tax year, the Fuel Tax Credit cannot be claimed, and the refund permit will become invalid if the tax credit is claimed. However, the Fuel Tax Credit is not available for casualty losses, transport diversions, pumping credits, off-loading procedures, blending errors, idle time, power takeoffs, refrigerated “reefer” units, export by distributors, or tax overpaid on blended fuel. A refund can be claimed for those reasons alongside the Fuel Tax Credit. Fuel Tax Credit received from Pass-through Entities For partnerships, limited liability companies (LLC), S corporations, estates, or trusts, the amount of fuel tax credit reported by each owner or beneficiary is based on their share of earnings or losses. Each owner's / beneficiary's share of the credit is found on the owner’s or beneficiary's IA K-1. File a separate IA 4136 for each pass-through Fuel Tax Credit received and provide the required information regarding the pass-through entity. 43

Child and Dependent Care Credit or Early Childhood Development Credit Line: 24 Step: 6 Step Subject: Refundable Credits and Payments Only one of the following two credits may be claimed: ● Child and Dependent Care Credit OR ● Early Childhood Development Tax Credit Only taxpayers with Iowa taxable income of less than $90,000 are eligible to take one of these refundable credits. If you are married filing jointly, your Iowa taxable income and the Iowa taxable income of your spouse must be combined to determine if you qualify. Child and Dependent Care Credit If you are choosing the Child and Dependent Care Credit, use the following worksheet and percentage table to calculate the credit. The percentages are based on your Iowa taxable income on line 4. You must include a copy of your completed federal form 2441. This credit may only be claimed for expenses actually paid by the taxpayer. Child and Dependent Care Credit Worksheet 1. Enter the amount from federal form 2441, line 9c 1. 2. If IA 1040, line 4 is: Less than $10,000 enter 75% $10,000 - $19,999 enter 65% $20,000 - $24,999 enter 55% $25,000 - $34,999 enter 50% $35,000 - $39,999 enter 40% $40,000 - $89,999 enter 30% $90,000 and over: not eligible for credit (0%)

Enter the appropriate percent here. 2. % 3. Multiply line 1 by percentage on line 2. Enter the result here and on the IA 1040, line 24. 3.

Nonresidents and Part-year Residents The Child and Dependent Care Credit must be adjusted using the following steps: 1. Multiply the Iowa income percentage reported on the IA 126, line 29 by the amount of credit calculated in the worksheet, line 3. 2. Enter this amount on the IA 1040, line 24. Married Separate Filers: Generally, you may not take this credit if your filing status is married filing separately. See IRS Publication 503 for more information. 44

Early Childhood Development Credit If you are choosing the Early Childhood Development Credit, you may take the credit equal to 25% of the first $1,000 of qualifying expenses paid in 2025 for each dependent from the ages of three through five. Expenses that qualify include the following: ● Services provided by a preschool, as defined in Iowa Code section 237A.1 ● Books that improve child development, such as textbooks, music and art books, teacher's editions, and reading books ● Instructional materials required to be used in a lesson activity, such as paper, notebooks, pencils, and art supplies ● Lesson plans and curricula ● Child development and educational activities outside the home, such as drama, art, music and museum activities, and the entrance fees for such activities Early childhood development expenses that do NOT qualify include: ● Food, lodging, or membership fees relating to child development and educational activities outside the home ● Services, materials, or activities for the teaching of religious tenets, doctrines, or worship, if the purpose of these expenses is to instill those tenets, doctrines, or worship Nonresidents and part-year residents The Early Childhood Development Credit must be adjusted using the following steps: 1. Multiply the Iowa income percentage reported on the IA 126, line 29 by the amount of the credit. 2. Enter this amount on the IA 1040, line 24. Married Separate Filers: This credit must be taken by the spouse claiming the dependent. The $90,000 income limitation only applies to the income of the taxpayer and does not include their spouse’s income. Iowa Earned Income Tax Credit Line: 25 Step: 6 Step Subject: Refundable Credits and Payments The Iowa Earned Income Tax Credit is a refundable credit. This credit is available only to taxpayers who qualify for the federal Earned Income Tax Credit (EITC). To calculate the Iowa Earned Income Tax Credit, multiply your federal EITC by 15% (.15). To find out if you qualify for federal EITC, see the IRS EITC information or call the IRS at 1-800-829-1040. If you are filing an Iowa return ONLY to claim EITC If you qualify for the low income exemption and are filing an Iowa return only to claim a refund of the Iowa EITC, check the box between Steps 4 and 5. Skip lines 5 through 19, enter zero on lines 20 and 22, and enter the amount of your Iowa EITC on lines 25, 30, 31, and 32.

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Nonresidents and Part-year Residents The Iowa EITC must be adjusted using the following formula Iowa income percentage (IA 126, line 29)

multiplied by the Iowa Earned Income Tax Credit x equals credit on line 25 = .

Other Refundable Credits Line: 26 Step: 6 Step Subject: Refundable Credits and Payments Enter the total of other credits from the IA 148 Tax Credits Schedule, Part II. Your credit claim may be denied if the IA 148 Tax Credits Schedule or any other required tax credit schedule is not included with your return. Adoption Tax Credit An Adoption Tax Credit is available for individual income tax equal to the first $5,000 of unreimbursed expenses related to an adoption per child placed in Iowa. There is no limit on the amount of income earned by an individual to be eligible for the credit. All claims for the adoption of a child cannot exceed the applicable limit based on the year the adoption became final. The Adoption Tax Credit can only be claimed once the adoption has been finalized. Beginning in tax year 2019, all qualifying adoption expenses paid in or before the year the adoption is finalized must be claimed in the tax year the adoption is finalized, up to the credit limit, regardless of the prior year in which the expenses were paid. EXAMPLE: Taylor and Jordan are married. Taylor and Jordan adopt a child who is permanently placed in Iowa. The adoption process begins in 2020 and becomes final in 2023. Because the adoption becomes final on or after January 1, 2017, Taylor and Jordan qualify for a credit up to the maximum amount of $5,000. Additionally, because the adoption becomes final on or after January 1, 2019, Taylor and Jordan may claim an Iowa adoption tax credit for unreimbursed qualified adoption expenses paid or incurred prior to or in the year the adoption becomes final. Taylor and Jordan incur and pay unreimbursed qualified adoption expenses of $5,000 in 2020, $10,000 in 2021, $2,000 in 2022, and $2,000 in 2023. Taylor and Jordan jointly file their Iowa individual income tax return in 2023. Taylor and Jordan may claim an Iowa adoption tax credit of $5,000 on their 2023 Iowa income tax return. Taylor and Jordan are not allowed to amend a prior year return in an attempt to claim the credit for unreimbursed qualified adoption expenses paid or incurred prior to the tax year in which the adoption became final. If additional qualifying expenses are paid after the year the adoption is finalized, and your previous expenses are under the credit limit, those expenses must be claimed in the year they were paid, up to the credit limit. EXAMPLE: Jason and Tammy are married. Jason and Tammy adopt a child who is permanently placed in Iowa. The adoption process begins in 2021 and becomes final in 2022. Because the adoption becomes final on or after January 1, 2022, Jason and Tammy qualify for a credit up to the maximum amount of $5,000. Jason and Tammy incur and pay unreimbursed qualified adoption expenses of $1,000 in 2021, and $1,000 in 2022. Jason and Tammy jointly file their Iowa individual income tax return in 2022. Jason and Tammy may claim the Iowa adoption tax credit in 2022 in the amount of $2,000. In 2023, Jason and Tammy incur and pay $5,000 in unreimbursed qualified adoption expenses in connection to the adoption finalized in 2022. Jason and Tammy 46

may claim the remaining $3,000 credit on their jointly filed Iowa individual income tax return for 2023 for unreimbursed qualified adoption expenses incurred and paid in 2023. Jason and Tammy shall not amend their 2022 return to reflect the additional unreimbursed qualified adoption expenses from 2023. A part-year resident of Iowa may claim the credit if they were a resident of Iowa at the time the child was permanently placed. The IA 177 is used to compute the credit and must be included with the Iowa income tax return. The tax credit must also be reported on the IA 148 Tax Credit Schedule using tax credit code 66. If multiple children are adopted in a tax year, complete a separate IA 177 for each Adoption Tax Credit and report each claim on a separate line on the IA 148. Any tax credit in excess of tax liability is refundable. The adoption tax credit may only be claimed by a person who adopted the child. When a married couple adopts a child together and the couple files jointly on the same return, the credit may only be claimed once between the couple. When any other two persons adopt a child together, including married persons filing separately or any unmarried persons filing on separate returns, the credit must be divided between the adoptive parents. Two adoptive parents, other than persons who are married filing jointly, may agree to divide the credit in any way. The total adoption tax credit claimed for all years by both parents combined may not exceed the applicable limit based on the year the adoption became final. Iowa Code section 422.12A Angel Investor Tax Credit An Angel Investor Tax Credit, formerly known as Venture Capital Qualifying Business Tax Credit, equals 25% of the equity investment made by “angel investors” in a qualifying business approved by the Iowa Economic Development Authority. The credit is refundable when claimed against the individual income tax. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the refundable tax credit is claimed using tax credit code 68. This tax credit is repealed and no more tax credits will be awarded after June 30, 2026. Taxpayers are still able to claim tax credits awarded before this date for the applicable tax years. Iowa Code sections 15E.43 and 422.11F Biodiesel Blended Fuel Tax Credit A retail dealer of diesel fuel who sells B5 or higher blends of biodiesel during the tax year at a retail motor fuel site can claim a Biodiesel Blended Fuel Tax Credit. B5 or higher blends are biodiesel blended fuels with a biodiesel content of 5% and higher by volume. Tank wagons are considered retail motor fuel sites. For fuel sold on or after January 1, 2023, the tax credit equals 5 cents per gallon with a blend between 11% and 19% biodiesel and 7 cents per gallon with a blend of 20% biodiesel. The IA 8864 is used to compute the credit or report and must be included with the Iowa income tax return. The Biodiesel Blended Fuel Tax Credit must be reported on the IA 148 Tax Credits Schedule using tax credit code 52. Any tax credit in excess of tax liability is refundable. If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 8864, line 8 and on the IA 148 Tax Credit Schedule. The credit is repealed on January 1, 2028. Iowa Code section 422.11P 47

BIG Program Investment Tax Credit A tax credit of up to 5% of the qualifying investment made under a Business Incentives for Growth (BIG) Program project that is not located in a rural county has been approved by the Iowa Economic Development Authority is available to an eligible business. The credit may be as much as 7.5% of the qualifying investment made under a BIG Program project when the project is located in a rural county. When the tax credit is awarded, the taxpayer receives a tax credit certificate with five tax credit certificate numbers that must be reported separately on the IA 148 Tax Credits Schedule when each tax credit is claimed using tax credit code 75. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.502 through 15.511 Claim of Right Tax Credit A Claim of Right Tax Credit may be claimed by a taxpayer who repaid income during the 2025 tax year that was reported and taxed on a prior Iowa income tax return. To calculate the credit, recompute tax liability in the prior tax year excluding the repaid income. The Claim of Right Tax Credit equals the calculated reduction in tax liability in that prior year. However, it may be more advantageous to report the amount of repaid income as an income adjustment on Schedule 1, line 19. You may claim either the Claim of Right Tax Credit or take a deduction of the amount repaid on Schedule 1, line 19, but not both. Example of Claim of Right Tax Credit: A taxpayer received a $5,000 bonus in 2023 and reported it on the 2023 Iowa return. In 2025, the taxpayer's employer advised that the bonus was awarded in error and was to be repaid. The bonus was repaid by the end of 2025. After recomputing the 2023 Iowa return, there is a $440 reduction in tax. The taxpayer may claim a credit of $440 on the 2025 IA 1040, line 26 or apply an income deduction of $5,000 on Schedule 1, line 19. The Claim of Right Tax Credit must be reported on the IA 148 Tax Credits Schedule using tax credit code 53. Any tax credit in excess of the tax liability is refundable. Iowa Code section 422.5(11) E15 Plus Gasoline Promotion Tax Credit A retail dealer of gasoline who sells E15 plus gasoline during the tax year at a retail motor fuel site can claim an E15 Plus Gasoline Promotion Tax Credit. E15 plus gasoline is ethanol blended gasoline with an ethanol content between 15% and 69% by volume. Tank wagons are considered retail motor fuel sites. For sales made on or after January 1, 2023, the credit equals nine cents per gallon of E15 plus gasoline sold in any month. The IA 138 form is used to compute the credit and must be included with the Iowa income tax return. The E15 Plus Gasoline Promotion Tax Credit must be reported on the IA 148 Tax Credits Schedule using tax credit code 65. Any tax credit in excess of tax liability is refundable. If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 138, line 3 and on the IA 148 Tax Credit Schedule. The credit is repealed on January 1, 2026. Iowa Code section 422.11Y 48

E85 Gasoline Promotion Tax Credit A retail dealer of gasoline who sells E85 gasoline during the tax year at a retail motor fuel site can claim an E85 Gasoline Promotion Tax Credit. E85 gasoline is ethanol blended gasoline with an ethanol content between 70% and 85% by volume. Tank wagons are considered retail motor fuel sites. The tax credit equals sixteen cents per gallon of E85 gasoline sold. The IA 135 form is used to compute the credit and must be included with the Iowa income tax return. The E85 Gasoline Promotion Tax Credit must be reported on the IA 148 Tax Credits Schedule using tax credit code 55. Any tax credit in excess of tax liability is refundable. If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 135, line 3 and on the IA 148 Tax Credit Schedule. The credit is repealed on January 1, 2028. Iowa Code section 422.11O Historic Preservation Tax Credit A Historic Preservation Tax Credit is available for 25% of the qualified rehabilitation expenditures of eligible property in Iowa. This credit is administered by the Iowa Economic Development Authority and the State Historic Preservation Office. When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 56, if refundable. Applications must be filed during a limited registration period and a scoring system is used to select rehabilitation projects eligible for Historic Preservation Tax Credits. However, credits for small projects defined as projects with qualified rehabilitation expenditures up to $750,000 can apply at any time. The project must be completed within 36 months of the date on which the project agreement was signed. The Historic Preservation Tax Credit can be transferred to any person or entity. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. NOTE: For Iowa income tax purposes, the increase in the basis of the rehabilitated property that would other- wise result from the qualified rehabilitation costs will be reduced by the amount of the tax credit received. Iowa Code chapter 404A and Iowa Code section 422.11D MEGA Refundable Investment Tax Credit A tax credit of up to 5% of the qualifying investment made under a Major Economic Growth and Attraction (MEGA) Program project that has been approved by the Iowa Economic Development Authority is available to a qualifying business. When the tax credit is awarded, the taxpayer receives a tax credit certificate with five tax credit certificate numbers that must be reported separately on the IA 148 Tax Credits Schedule when each tax credit is claimed using tax credit code 71. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.490 through 15.501 49

Public Safety Officer Moving Expense Tax Credit The Public Safety Officer Moving Expense Tax Credit is available to certain individuals who establish residency in Iowa after July 1, 2024, upon taking full-time employment as a public safety officer in Iowa. The tax credit equals the unreimbursed moving expenses paid or incurred by the taxpayer, not to exceed $2,000. It is refundable and applies to tax years beginning on or after January 1, 2024. The IA 176 is used to compute the credit and must be included with the Iowa income tax return. The tax credit must also be reported on the IA 148 Tax Credit Schedule using tax credit code 70. Iowa Code section 422.12P Redevelopment Tax Credit A Redevelopment Tax Credit equals a percentage of the qualifying investment in redeveloping a brownfield or grayfield site. A brownfield site is defined as an abandoned, idled, or underutilized industrial or commercial facility where expansion or redevelopment is complicated by real or perceived environmental contamination. A grayfield site is defined as a property that has been developed and has infrastructure in place but the property's current use is outdated or prevents a better or more efficient use of the property. Such property includes vacant, blighted, obsolete, or otherwise underutilized property. A higher tax credit rate is available if the redevelopment meets established “green development” standards. Projects must first apply to the Iowa Economic Development Authority to be considered for an award allocation during the annual application process. Non-profit applicants can receive a refundable, but nontransferable, tax credit, in that case the tax credit is claimed on the IA 148 using tax credit code 67. For refundable Redevelopment Tax Credit awards approved by the Economic Development Authority Board on or after January 1, 2023, taxpayers claiming the refundable tax credit must also complete Part V, section B of the IA 148 Tax Credit Schedule before completing Part II of the IA 148. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. NOTE: For Iowa income tax purposes, the increase in the basis of the redeveloped property that would otherwise result from the qualified redevelopment costs will be reduced by the amount of the tax credit received. Iowa Code sections 15.291,15.293A, 15.293B, 15.294, and 422.11V Renewable Chemical Production Tax Credit A Renewable Chemical Production Tax Credit is available to an eligible business producing chemicals from biomass feedstock in the state. The tax credit equals five cents per pound of renewable chemicals produced in a calendar year to the extent such production exceeds the eligible business’s pre-eligibility production threshold. The credit is available for renewable chemicals produced on or after January 1, 2017, and on or before December 31, 2026. The tax credit is available to businesses that apply to the Iowa Economic Development Authority. The maximum amount of credit that may be issued to an eligible business that has been in operation in the state for five years or less is $1 million. The maximum amount of credit, which may be issued to an eligible business that has been in operation in the state for more than five years is $500,000. An eligible business shall not receive more than five tax credits under the program. When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 69. Any tax credit in 50

excess of tax liability is refundable. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.315 through 15.321 and 422.10B Research Activities Tax Credit An Iowa Research Activities Tax Credit (RAC) is available for expenditures on research that is technological in nature as specified under the Federal Research Credit of Internal Revenue Code section 41 if the researching entity meets the following two requirements: the business must claim and be allowed a Federal Research Credit for the same taxable year, and the business must be engaged in manufacturing, life sciences, agriscience, software engineering, or aviation and aerospace. In addition, the business cannot be engaged in agricultural production or cannot be an agricultural cooperative, accountant, architect, collection agency, finance or investment company, publishing company, real estate company, retailer, transportation company, or wholesaler. The business also cannot be a contractor, subcontractor, builder, or contractor-retailer engaged in commercial and residential installation / repair including but not limited to HVAC installation / repair, plumbing and pipe fitting, security system installation, or electrical installation / repair. For more information, see Iowa Administrative Code rule 701—304.11 and Department guidance on the tax credit changes. The Iowa credit equals 6.5% of Iowa's apportioned share of qualifying expenditures for increasing research activities when claimed on the IA 128. The tax credit can alternatively be calculated using the "Alternative Simplified Research Activities Tax Credit" method on form IA 128S with a 4.55% rate of qualifying research expenditures. A taxpayer must use the same method (regular method or alternative simplified method) to calculate their Iowa RAC as they elected or were required to use in calculating their federal research credit. The RAC must be reported on the IA 148 Tax Credits Schedule using tax credit code 58. Taxpayers claiming the tax credit must complete Part V, section B of the IA 148 Tax Credit Schedule before completing Part II of the IA 148. If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 128, line 37 or the IA 128S, line 32 and on the IA 148 Tax Credit Schedule. Iowa Code section 422.10 Seed Investor Tax Credit Taxpayers who invest in a qualifying business located in an urban area at the time of investment are eligible for a Seed Investor Tax Credit equal to 20% of the equity investment. If the qualifying business is located in a rural area at the time the investment is made into the qualifying business the tax credit is equal to 35% of the equity investment. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the refundable tax credit is claimed using tax credit code 76. Iowa Code sections 15.119, 15E.25 through 15E.29, and 422.11F(1). 51

Sustainable Aviation Fuel Production Tax Credit Eligible businesses that produce sustainable aviation fuel in Iowa from feedstock may apply for the Sustainable Aviation Fuel Production tax credit from the IEDA. The credit is equal to twenty-five cents multiplied by the number of gallons of sustainable aviation fuel produced in Iowa from feedstock. When the tax credit is awarded, the taxpayer will receive a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 77. Any tax credit in excess of tax liability is refundable. If the tax credit is issued to a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.530 through 15.535 Supplemental Research Activities Tax Credit Taxpayers who are approved by the Iowa Economic Development Authority under the High Quality Jobs Program can be awarded a Supplemental Research Activities Tax Credit claimed on either form IA 128 or IA 128S. The amount of the Supplemental Research Activities Tax Credit depends upon the gross receipts of the eligible business. For businesses with average gross revenues of $20 million or less, the supplemental credit cannot exceed 10% of the qualified research expenditures eligible for the Research Activities Tax Credit calculated using the IA 128. For businesses with gross revenues exceeding $20 million, the supplemental credit cannot exceed 3% of qualified research expenditures. For Research Activities Tax Credits calculated using the IA 128S, see the form instructions for supplemental credit percentages. When the tax credit is awarded, the taxpayer receives a tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 59. Taxpayers claiming the tax credit must complete Part V, section B of the IA 148 Tax Credit Schedule before completing Part II of the IA 148. If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Taxpayers receiving the credit from a pass-through entity should report the credit on the IA 128, line 38 or the IA 128S, line 33 and on the IA 148 Tax Credit Schedule. Iowa Code sections 15.335 and 422.10 Third Party Developer Tax Credit Taxpayers who are approved by the Iowa Economic Development Authority (IEDA) under the High Quality Jobs Program can be awarded a Third Party Developer Tax Credit for certain sales taxes paid in completion of a High Quality Jobs Program project. When the tax credit is awarded, the taxpayer may submit an application to the Department of Revenue after contract completion as defined in Iowa Code section 15.331A(4). The last day to submit an application is one year after the project completion date stated in the agreement between the taxpayer and IEDA. Upon approving the claim, the Department of Revenue issues another tax credit certificate for the final amount of credit that can be claimed based on the submitted contractor’s statements and invoices, up to the award amount as either a refundable or nonrefundable credit, based on the designation requested by the taxpayer. The taxpayer then claims the credit using its tax credit certificate number that must be reported on the IA 148 Tax Credits Schedule when the tax credit is claimed using tax credit code 62 or 97 (see certificate for which code applies). For Third Party Developer Tax Credit agreements issued for High Quality Jobs Program 52

agreements under Iowa Code section 15.330 entered into on or after January 1, 2023, taxpayers claiming the refundable tax credit must also complete Part V, section B of the IA 148 Tax Credit Schedule before completing Part II of the IA 148. If the tax credit is earned by a partnership, limited liability company, S corporation, estate, or trust, the tax credit shall be claimed by the individual based on the pro rata share of the income of the entity. Iowa Code sections 15.331C and 422.11U Composite and PTET Credit Line: 27 Step: 6 Step Subject: Refundable Credits and Payments Enter the total composite and PTET credits from IA Schedule CC, Part III. Do not use the IA 148 to report these credits. Composite Credit A composite tax credit may be claimed by a nonresident member of a pass-through entity whose income tax was paid by the pass-through entity on an Iowa composite return (IA PTE-C). The amount of the credit is equal to the amount of tax paid by the pass-through entity on the nonresident member’s behalf, as reported on the nonresident member’s Iowa Schedule K-1. The composite credit shall be claimed for the same tax year that the nonresident member’s Iowa-source income from the pass-through entity is required to be reported on the Iowa income tax return. The composite tax credit must be reported on the IA Schedule CC and that schedule must be included with the return. Any tax credit in excess of tax liability is refundable. Iowa Code section 422.16B Pass-Through Entity Tax (PTET) Credit An owner of a pass-through entity that has elected to pay tax at the entity level may claim a PTET credit. The amount of the credit is reported on the owner’s Iowa Schedule K-1. The PTET credit shall be claimed for the same tax year that the owner’s income from the pass-through entity is required to be reported on the Iowa income tax return. The PTET credit must be reported on the IA Schedule CC and that schedule must be included with the return. Any tax credit in excess of tax liability is refundable. Iowa Code section 422.16C Iowa Income Tax Withheld Line: 28 Step: 6 Step Subject: Refundable Credits and Payments Enter the total amount of Iowa income tax withheld from your W-2s, W-2Gs, and 1099s. This will be the figure shown in the box labeled “State income tax.” Also enter the total amount of Iowa withholding identified on all K-1s. Nonresident members - Report amount of composite tax credit from your Iowa Schedule K-1 on IA Schedule CC and IA 1040, line 27, not on this line. 53

Copies of the W-2s, W-2Gs, 1099s, and K-1s showing Iowa income tax withheld must be included with paper filed returns. Photocopies of originals are accepted. Your W-2s, W-2Gs, 1099s, and K-1s must be complete and legible with no alterations. Employees: If you need a copy of your W-2, first ask your employer as the Iowa Department of Revenue is not able to furnish it to you. If you are unable to obtain a copy from your employer, here are some other possible options: ● Internal Revenue Service (IRS) – may provide an exact copy of a previously filed and processed tax return with attachments (including Form W-2). You should complete federal form 4506, Request for Copy of Tax Return, and mail it to the address listed in the instructions. A fee will be charged for each tax year requested. ● See “What to Do If You Do Not Receive Your W-2” Married Separate Filers: Withholding is reported by the spouse receiving the W-2, W-2G, 1099, and K-1. Estimated and Other Payments Line: 29 Step: 6 Step Subject: Refundable Credits and Payments Enter the total amount of 2025 Iowa estimated tax payments. This includes any fourth quarter payment made in January 2026 and any extension payments made electronically or with the IA 1040V Payment Voucher for 2025 prior to filing your return. Also include any amount applied to your 2025 Iowa estimated tax from your 2024 IA 1040, line 33. Make sure the payments claimed on the return match what was paid. The taxpayer who is identified with the payment, based on the name and identification number on the electronic payment/voucher, or an authorized third-party representative can call the Department to verify the payments on file. See the Department’s website for more information regarding third-party authorization. Taxpayers with a GovConnectIowa account can check their estimated payments at govconnect.iowa.gov prior to filing their individual income tax return. Amended returns only: Enter all payments made towards the 2025 Iowa individual income tax return, including amounts paid on prior 2025 Iowa individual income tax returns. NOTE: Any late payments may affect the actual calculation of penalty and interest. Estimated Tax Payment Schedule For fiscal year filers, the dates for paying the estimated tax are the last day of the fourth, sixth, and ninth months of the fiscal year, and the last day of the first month of the next fiscal year. ● Installment 1 – 04/30/2026 ● Installment 2 – 06/30/2026 ● Installment 3 – 09/30/2026 ● Installment 4 – 01/31/2026 If a due date ends on a weekend or holiday as defined in Iowa Code section 421.9A, substitute the next regular business day for the due date. 54

Total Line: 30 Step: 6 Step Subject: Refundable Credits and Payments Add lines 23 through 29

Step 7 Amount You Overpaid Line: 31 Step: 7 Step Subject: Refund Line 31a: Overpayment If line 30 is more than line 22, subtract line 22 from line 30 and enter the difference. You can have all or part of this amount refunded to you on line 32. The remainder, if any, can be applied to your estimated tax for 2026 on line 33. If you are filing an amended return, continue to line 31b. Line 31b: Previous Refunds - Amended returns only Enter the amount of overpayments received or processed on previous returns for the same tax period. Include refunds and amounts from previous overpayments setoff to other government debt. Do not include amounts previously applied to your 2026 estimated tax. See line 33 for more instruction regarding amounts applied to 2026. If line 31b is greater than line 31a, include the difference on line 34, including if line 31a is now zero. For line 36, penalty should not be calculated on this amount of excess refund, but interest should be calculated on it from either the date of the refund or the due date of the tax return, whichever is later. See line 36 for more information. About Iowa income tax withholding... If the amount you overpaid (line 31) is large, you may wish to check the Department's Withholding Estimator to estimate your 2026 recommended withholding. You may file a new IA W-4 with your employer to change the amount of Iowa income tax withheld from your pay. Amount to Be Refunded and Direct Deposit Information Line: 32 Step: 7 Step Subject: Refund Enter the portion of the amount shown on line 31a you wish to have refunded to you. Amended Returns only: If line 31a is greater than line 31b, subtract line 31b from line 31a and enter on line 32 or 33. Check your Iowa refund status online at Where's My Refund? This is the same information that is available to our phone representatives when you call the general taxpayer services line. 55

Receiving your Refund By Check If you want to have your refund issued to you as a paper check, proceed to Step 9. The check will be issued to the address listed on your return. By Direct Deposit: If you would like your refund directly deposited, proceed to lines 32a, and 32b, and 32c. Do not put your account and routing information in rows 32a and 32b if you have an amount due on line 37. 32a. Enter your financial institution’s routing number. The routing number must be nine digits. 32b. Enter your account number starting in the first box on the left. The account number may have up to 17 digits. NOTE: The routing and account numbers may be in different places on your check. 32c. Check either checking or savings to indicate what type of account the refund will be deposited into.The entire refund amount will be deposited into this one account. For savings accounts you will need to contact your financial institution to obtain the account number. The account the refund will be issued to must be located in the United States. Verify that the routing and account numbers are correct to avoid a delay in your refund. Any error will result in a paper refund. Do not request a deposit of your refund to an account that is not in your name, such as your tax return preparer’s account. Although you may owe your tax return preparer a fee for preparing your return, do not use the preparer’s account to pay the fee. Claim for Refund - Statute of Limitations Claims for refund of an Iowa income tax return will only be honored if the claim for refund is made within the statute of limitations provided in Iowa Code section 422.73 and Iowa Administrative Code rules 701—305.3(8) and 305.3(15). Overpayment Applied to Estimated Tax Line: 33 Step: 7 Step Subject: Refund Subtract line 32 from line 31a. This is the amount that will be applied to your estimated tax for 2026. Enter this amount on line 33. If you choose to apply part or all of your overpayment to your estimated tax for 2026, the return must be filed by December 31, 2026, and this choice cannot be changed after December 31, 2026. 2025 returns filed after December 31, 2026, may not request that overpayment be applied to estimated tax. Any overpayment will be refunded. If you do not make any entry on line 32 or 33, the entire amount of the overpayment on line 31a will be refunded to you. For original returns, the total of lines 32 and 33 must equal the amount on line 31a. Amended Returns Only.If you would like to adjust the amount applied to the 2026 estimated tax, you must amend your return before 12/31/2026. To change the amount applied, calculate the new total amount applied 56

to the 2026 estimated tax on line 33. This would reflect the new total amount applied to the 2026 estimated tax and should be noted for future filings. On line 31b, do not include any amounts already applied to the next period. If the return is being amended after 12/31/2026, enter the same amount from line 33 of your most recently filed return. This amount cannot be increased or decreased from the latest return filed before 12/31/2026. If line 33 plus any amount on line 31b is greater than line 31a on amended returns filed after 12/31/2026, include any excess amount on line 34.

Step 8 Amount of Tax You Owe Line: 34 Step: 8 Step Subject: Amount Due If line 30 is less than line 22, subtract line 30 from line 22 and enter the difference. This is the amount of tax you owe, prior to any penalty or interest that may be due. Amended Returns Only. If line 31b is greater than line 31a, include the difference on line 34 with any tax calculated, including if line 31a is now zero. For line 36, penalty should not be calculated on this amount of excess refund, but interest should be calculated on it from either the date of the refund or the due date of the tax return, whichever is later. About Iowa income tax withholding... If the amount you owe (line 34) is large, you may wish to check the Withholding Estimator to estimate your recommended withholding. You may file a new IA W-4 with your employer to change the amount of Iowa income tax withheld from your pay. Penalty for Underpayment of Estimated Tax Line: 35 Step: 8 Step Subject: Amount Due If you are required to make estimated tax payments but fail to make payments, you may be subject to a penalty in addition to any tax you may owe. The penalty is determined in the same way as for federal purposes. Consequently, you must include your Iowa income and lump-sum taxes when calculating the penalty for underpayment of estimated tax. Taxpayers who do not have Iowa tax withheld from their paychecks must pay Iowa tax on their income by making Iowa estimated tax payments on a quarterly basis. If you are subject to this penalty, complete IA 2210 and enter the penalty on this line. Include a copy of the IA 2210 with your tax return. If you use the farmer/fisher or annualized method of computing the penalty, check the box on line 35 and include a copy of your IA 2210F (for farmers and commercial fishers) or IA 2210 Schedule AI (Annualized 57

Income Installment Method) with your tax return. If at least two-thirds of your income is from farming or commercial fishing, you may avoid penalty for underpayment of estimated tax in one of the following ways: 1. Pay the estimated tax in one payment on or before January 15, 2026, and file the Iowa income tax return by April 30, 2026, or 2. File the Iowa income tax return and pay the tax due in full on or before March 1, 2026. An IA 2210F is required to be filed with the Iowa income tax return. If the due date falls on a Saturday, Sunday, or holiday as defined in Iowa Code section 421.9A, then the due date is the following day that is not a Saturday, Sunday, or holiday. If you are due a refund, subtract the penalty amount from the overpayment you show on line 31 or line 32. If the subtraction results in an amount due, include the amount due on line 37. Individuals who expect to owe Iowa income tax of $200 ($1,000 for tax years beginning on or after January 1, 2026) or more for the tax year from income not subject to Iowa withholding tax must make quarterly estimated tax payments. These payments may be made online at govconnect.iowa.gov after setting up an account or by mail with an Individual Income Voucher. Learn About the IA 2210 Form The IA 2210 penalty is calculated as a per day interest charge based upon the number of days that an estimated income tax payment is made after the required due date. The first 8 lines of the 2210 form determine how much tax the taxpayer should have paid. Lines 9 through 16 are now used for the optional short method of calculating underpayment penalty The second part of the 2210 form determines what the penalty, if any, is on the tax that was not paid. Penalty is determined on a quarterly basis. The IA 2210 is used to determine if an individual taxpayer paid income tax sufficiently throughout the year. This form is used to calculate any penalty due. You may use the optional short method (lines 9 through 16) for the 2210 penalty if: ● You did not make any estimated payments, or ● You paid the same amount of estimated tax on each of the four payment due dates. You must use the regular method (lines 17 through 26) to calculate your 2210 penalty if: ● You made any estimated tax payments late, ● You choose to annualize your income for 2210 penalty calculations. NOTE: If any payment was made earlier than the due date for that payment, you may use the short method, but using it may cause you to pay a larger penalty than the regular method. If the payment was only a few days early, the difference is likely to be small. To find out if you owe 2210 penalty, complete the IA 1040 through line 34 then complete the IA 2210. You will need the amount of tax you paid Iowa in 2024 in addition to completing the 2025 Iowa return. Estimated Payments If you file returns on a calendar-year basis and are required to file form IA 1040ES, you are generally required to pay the tax in four installments with the first installment due by April 30. If you file returns on a fiscal-year basis and are required to make estimated income tax payments, you are generally required to pay the tax in four installments with the first installment due the last day of the fourth month after the filing year ends. 58

You may benefit by using the IA 2210 Schedule AI Annualized Income Installment Method if your income varied during the year. Calendar-Year Taxpayers: If you are not required to file estimated payments until later in the year because of a change in your income or exemptions, you may be required to pay in fewer installments. IA 2210 Schedule AI Information Nonresident or Part-Year Resident Credit: Must be computed on the IA 126 for each period as follows: 1. Figure the Iowa-source gross income less any adjustments for the period. Multiply this income figure by the number for the corresponding period on Schedule AI, line 2 and enter on the IA 126, line 27. 2. Enter the amount from Schedule AI, line 3 on the IA 126, line 28. 3. Calculate the Iowa income percentage and the nonresident/part-year resident credit percentage on the IA 126, lines 29 and 30. 4. Enter the tax amount for the period from Schedule AI, line 4 on the IA 126, line 31. 5. Add the credits from Schedule AI, lines 7 and 8 that represent IA 1040, lines 8, 9, and 10. Enter this figure on form IA 126, line 32. 6. Compute the nonresident/part-year resident credit by subtracting the credits on IA 126, line 32 from the tax on IA 126, line 31. Multiply this amount by the percentage on line 30. Enter this number on Iowa Schedule AI, line 8. Out-of-State Tax Credit form IA 130 must be computed for each period: The gross income taxed by the other state/country, IA 130, line 13, must be annualized by multiplying by the annualization factor for the period. The gross income for residents, IA 130, line 16, is the amount on Iowa Schedule AI, line 3, (if a part-year resident, the amount is taken from IA 126, line 13) for the period. The tax, IA 130, line 18, is the amount on Iowa Schedule AI, line 4 for the period. The total tax imposed by the other state/country must be multiplied by a ratio of gross income taxed by the other state/country for the period to total gross income taxed by the other state/country. Example: Fred, a full-year resident, had $100,000 of income taxed by another state. The other state’s tax imposed was $4,000 for the year. For the period 1/1/24 to 3/31/24, the income taxed by the other state was $25,000. The computation for the tax imposed for the period 1/1/24 to 3/31/24 is ($4,000 times the annualization factor of 4.0 X 25,000/100,000). Please include a worksheet or tax form showing the calculations for each credit claimed on line 8. Estimated / Installment Payment Periods and Due Dates The chart below shows the due date for the calendar year filers installments and the maximum number of installments required for each. More installments than required may be made in each period. Period Requirement First Met Installment is Due Maximum Number of Installments Required During the Year Between January 1 and April 1 April 30 4 Between April 2 and June 1 June 30 3 Between June 2 and September 1 September 30 2 After September 1 January 31 1 If the due date falls on a Saturday, Sunday, or holiday as defined in Iowa Code section 421.9A, then the due date is the following day that is not a Saturday, Sunday, or holiday. 59

Fiscal-year filers: If you file returns on a fiscal-year basis and are required to make estimated income tax payments, you are generally required to pay the tax in four installments with the first installment due the last day of the fourth month after the filing year ends. Subsequent installment due dates would fall on the last day of the sixth month, last day of the ninth month, and last day of the first month of the next fiscal year Basic IA 2210 Calculation Criteria ● Installment period due dates are important. When a due date is missed, penalty applies in most cases. ● Payments are first carried back to any prior period with an underpayment. ● Any overpayments are carried forward to the next period. ● Any credit carryforward from the prior year is applied to the April 30 installment. ● There may be more than one penalty calculation for an installment period if more than one payment was made in that period. ● Iowa tax withholding is credited equally in each installment period. Learn About the IA 2210 Form The first 13 lines of the 2210 form determine how much tax the taxpayer should have paid. The second part of the 2210 form determines what the penalty, if any, is on the tax that was not paid. Penalty is determined on a quarterly basis. IA 2210 Optional Short Method Example 1 An individual taxpayer did not make any estimated payments of Iowa income tax throughout the year. The taxpayer paid $4,000 when filing the tax return on April 30. Results: The taxpayer should have paid $1,000 each quarter, for a total of $4,000 for the entire year. This taxpayer owes 2210 penalty. IA 2210 Optional Short Method Example 2 An individual taxpayer made four estimated payments of Iowa income tax for a total of $4,000. Although the full amount was eventually paid, some payments were not timely. Results: This taxpayer owes 2210 penalty. Why? It matters when the payments are made. If they are not timely, penalty is due. First installment period (due April 30): No payment was made by April 30; therefore, the taxpayer has a $1,000 underpayment and will be assessed a penalty. ● The first payment of the year ($500) was made June 15. The second ($2,000) was two weeks later on June 30 ● The underpayment is paid by applying the $500 paid June 15 and $500 of the $2,000 paid June 30 ● The $500 paid June 15 has a penalty for 46 days (May 1 - June 15). The $500 paid June 30 has a penalty for 61 days (May 1 - June 30) Second installment period (due June 30): No penalty is charged for this period. ● The taxpayer had $1,500 remaining from the $2,000 paid June 30 to apply to this period. ● Of the remaining $1,500, $500 is carried forward to the next installment. Third installment period (due September 30): Penalty is charged for this period. $500 of the June 30 payment carried over to this period; therefore, the taxpayer still owes $500 for this period. ● The taxpayer's third payment of $500 is made January 31, too late for the third period. This amount is applied to the third period. ● Penalty on this $500 is for 92 days for the October 1 - December 31 quarter AND 31 days for Jan 1-31. 60

Fourth installment period (due January 31): Since the taxpayer's January 31 payment applied to the third installment, penalty is due on $1,000. ● The $1,000 payment made February 25, is applied to this period's underpayment. ● Penalty on the $1,000 is for 25 days for February 1 - February 25. IA 2210SOptional Short Method Example 1 An individual taxpayer did not make any estimated payments of Iowa income tax throughout the year. Results: The taxpayer should have paid $1,000 each quarter, for a total of $4,000 for the entire year. This taxpayer owes 2210 penalty. IA 2210S Optional Short Method Example 2 An individual’s tax liability determined on the IA 1040 was $4,000. The individual made four estimated payments of Iowa income tax during the year in the amount of $500 each, for a total of $2,000. Payment of the remaining $2,000 due was made on April 15. Results: All payments were made on time, but the taxpayer should have made a total of $4,000 in estimated payments of Iowa income tax. This taxpayer owes 2210 penalty. Penalty and Interest Line: 36 Step: 8 Step Subject: Amount Due Enter the penalty on line 36a, the interest on line 36b, and the total on line 36. 36a. Penalty 5% Penalty for Failure to Timely File a Return: If you do not file your return by the due date and you paid less than 90% of the correct tax, you owe an additional 5% of the unpaid tax. 5% Penalty for Failure to Timely Pay the Tax Due: If you file your return on time but paid less than 90% of the correct tax due, you owe an additional 5% of the unpaid tax. Taxpayers may be subject to both the 5% failure to timely file penalty and the 5% failure to timely pay penalty. If 90% of the correct tax due is paid by the due date, then no penalty is due. To determine if 90% was paid, multiply IA 1040, line 20 by 90% (.90). If the result is equal to or less than the amount on the IA 1040, line 30, plus any payment made with a return filed by the due date, 90% (.90) of the tax has been paid timely and no penalty is due. Other penalties that may be assessed: 5% Penalty for audit or examination deficiency: If the Department discovers an underpayment during an audit or examination, a penalty of 5% will be added to the unpaid tax. $1,000 Penalty for Failure to File after Demand A $1,000 penalty is assessed when a taxpayer continues to fail to file 90 days after the Department issues a demand letter. A separate penalty will be assessed for each unfiled return listed in the demand letter. This penalty is in addition to the failure to file penalties listed above. 61

75% Penalty for fraud or frivolous tax return filings or willful failure to file a return: A person who willfully intends to make a false or frivolous tax return to claim a refund, or to evade tax is guilty of fraud. A penalty of 75% of the refund claimed will be due. This penalty cannot be waived. $500 Civil Penalty: A $500 civil penalty is assessed when a return is considered to be a “frivolous return.” A “frivolous return” is a return that lacks sufficient information to determine the substantial correctness of the amount of tax liability or contains information that indicates the amount of tax shown is substantially incorrect and this conduct is due to a position of law taken that is frivolous or a desire to delay or impede the administration of the tax laws of Iowa. Waivers: Penalties can be waived under limited circumstances, as described in Iowa Code section 421.27. Complete and submit a Penalty Waiver Request form (78-629) to request a penalty be waived. 36b. Interest Interest must be added to delinquent tax. Interest is added at a rate of 0.8% per month after the due date of the return (April 30) and accrues each month until paid in full. Part of a month constitutes a whole month, so if you pay the tax on June 3, you are late for May and June. Total Amount Due Line: 37 Step: 8 Step Subject: Amount Due Add lines 34, 35, and 36 and enter the total on line 37. Do not fill in lines 32a, 32b, or 32c if you have an amount due. Entries on 32a, 32b, and 32c are intended for direct deposit of a refund only. How to Pay Your Tax: You have four options to pay the amount due. Payment options include: ● Through your tax software ● Online through govconnect.iowa.gov ● In person at the Iowa Department of Revenue Office ● By check with a voucher. Do not send cash. Direct Debit payment with your return through tax software ● Your tax payment is made from your savings or checking account without having to write a check. ● You may be able to make a direct debit payment through your software when you file electronically. ● You may be able to schedule the payment for a future date through your tax software. Credit or Debit Card Online Enter your credit / debit card information and the type of payment. A service fee will be charged. Cards accepted: Visa, MasterCard, American Express, Discover. Pay by Mail Mail a check or money order with an IA 1040V Payment Voucher payable to Iowa Department of Revenue. Write the type of tax being paid and the tax year being paid on the check or money order. The mailing address is on the voucher. Do not send cash. 62

In Person at the Iowa Department of Revenue Office Hoover State Office Building - 1st Floor 1305 E. Walnut St, Des Moines IA 50319 8:00 a.m. - 4:30 p.m. CT, Monday through Friday The Hoover Building is located near the intersection of East 14th Street (Highway 69) and Court Avenue, a few blocks south of I-235. Capitol Complex Map Unable to Pay Pay as much as you can, and you will be billed for the balance due. You can make payments prior to receiving a bill from the Department. NOTE: You must have received a bill from the Department before you can set up a formal payment plan. Iowa does not have a formal payment plan option prior to receiving a bill from the Department. However, if you are unable to pay your Iowa tax liability in full, file the return and pay what you can by the due date. If you do not file your return by the due date, and at least 90% of the correct tax is not paid, you owe an additional 5% late filing penalty and a 5% late payment penalty on the unpaid tax. By filing the return on time, even if at least 90% of the correct tax due isn’t paid, you only owe an additional 5% late payment penalty on the unpaid tax. You may pay online through govconnect.iowa.gov. If paying by check or money order, mail a check or money order with an IA 1040V Payment Voucher payable to Iowa Department of Revenue. Write the type of tax being paid and the tax year being paid on the check or money order. The mailing address is on the voucher. You will be billed for the balance after your return is processed, including any penalty or interest that may be due. Interest will accrue on the first of each month until the balance is paid.

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IA 1040 Schedule 1 Step Subject: IA 1040 Schedule 1 Schedule 1 (located on page 5 of the IA 1040) is used to report Iowa modifications to federal taxable income. Amounts should only be reported if there is a difference between the federal and Iowa reportable amounts. Column A should be used to report additions to federal taxable income and Column B should be used to report subtractions from federal taxable income. Report all amounts as a positive number. NOTE: The Schedule 1 should not be used to solely adjust for income that was sourced from or taxed by another state, country, municipality or other jurisdiction. These adjustments and reconciliations are made using IA 126 (nonresidents or part-year residents to Iowa) or IA 130 (residents and certain part-year residents to Iowa). Line 1: Interest Column A: Enter interest from state and municipal securities, to the extent not already included in federal taxable interest on the IA 1040, line 2, unless specifically exempt from Iowa tax. However, interest from certain Iowa state and municipal securities is exempt from Iowa tax and should not be included on this line. For more information, see Iowa Administrative Code rules 701—302.2 and 701—302.3. The following securities are exempt: ● Aviation Authority Bonds, Iowa Code section 330A.16 ● Beginning Farmer Loan Program Bonds, Iowa Code section 175.17(10) ● Community College Bond Program Bonds, Iowa Code section 260C.71(6) ● Community College Residence Halls and Dormitories Bonds, Iowa Code section 260C.61 ● County Health Center Bonds, Iowa Code section 331.441(2)"C"(7) ● E911 Emergency Telephone Service Program Bonds, Iowa Code section 34A.20(6) ● Interstate Bridges Bonds, Iowa Code section 313A.36 ● Iowa Board of Regents Bonds for buildings and facilities, Iowa Code sections 262.41, 262.51, 262.60, and 262A.8 ● Iowa Higher Education Loan Authority, Iowa Code section 261A.27 ● Iowa Municipality Urban Renewal Bonds, Iowa Code section 403.9(2) ● Iowa Rural Water District Revenue Bonds and notes, Iowa Code section 357A.15 ● Low Income Housing Bonds, Iowa Code section 403A.12 ● Prison Infrastructure Revenue Bonds, Iowa Code section 16.177(8) ● Regents Institutions Medical and Hospital Buildings at University of Iowa Bonds, Iowa Code section 263A.6 ● Soil Conservation Districts Revenue Bonds, Iowa Code section 161A.22 ● Quad Cities Interstate Metropolitan Authority Bonds, Iowa Code section 28A.24 ● Sewage Treatment Works Revenue Bonds, Iowa Code section 16.131(6) ● Underground Storage Tank Fund Revenue Bonds, Iowa Code section 455G.6(14) ● Vision Iowa Program, Iowa Code section 12.71 ● Iowa Utilities Board and Consumer Advocate Building Bonds, Iowa Code section 12.91(9) ● School Infrastructure Program Bonds, Iowa Code section 12.81(8) ● Appropriation Bonds, Iowa Code section 12.87(8) ● Natural Hazard Mitigation Financing Bonds, Iowa Code section 16.232 Column B: Enter interest received from federal securities (for example, U.S. Savings Bonds, U.S. Treasury Notes), to the extent included on the IA 1040, line 2. Do not include interest from repurchase agreements of U.S. Government securities. 64

The following list contains widely held United States Government obligations, but is not intended to be all-inclusive. The following are exempt and should be included in Column B to the extent they are included in federal taxable income: a. United States Government obligations: United States Treasury - Principal and interest from bills, bonds, and notes issued by the United States Treasury exempt under 31 USC section 3124(a). ● Series E, EE, F, G, H and I bonds ● United States Treasury bills ● U.S. Government certificates ● U.S. Government bonds ● U.S. Government notes b. Territorial obligations: ● Guam - Principal and interest from bonds issued by the Government of Guam (48 USCS section 1423[a]). ● Puerto Rico - Principal and interest from bonds issued by the Government of Puerto Rico (48 USCS section 745). ● Virgin Islands - Principal and interest from bonds issued by the Government of the Virgin Islands (48 USCS section 1403). ● Northern Mariana Islands - Principal and interest from bonds issued by the Government of the Northern Mariana Islands (48 USCS section 1681(c)). c. Federal agency obligations: ● Commodity Credit Corporation - Principal and interest from bonds, notes, debentures, and other similar obligations issued by the Commodity Credit Corporation (15 USCS section 713a–5). ● Banks for Cooperatives - Principal and interest from notes, debentures, and other obligations issued by Banks for Cooperatives (12 USCS section 2134). ● Farm Credit Banks - Principal and interest from systemwide bonds, notes, debentures, and other obligations issued jointly and severally by Banks of the Federal Farm Credit System (12 USCS section 2023). ● Federal Land Bank Association - Principal and interest from bonds, notes, debentures, and other obligations issued by the Federal Land Bank Association (12 USCS section 2098). ● Financial Assistance Corporation - Principal and interest from notes, bonds, debentures, and other obligations issued by the Financial Assistance Corporation (12 USCS section 2278b–10[b]). ● Production Credit Association - Principal and interest from notes, debentures, and other obligations issued by the Production Credit Association (12 USCS section 2077). ● Federal Deposit Insurance Corporation (FDIC) Principal and interest from notes, bonds, debentures, and other such obligations issued by the Federal Deposit Insurance Corporation (12 USCS section 1825). ● Federal Financing Bank - Interest from obligations issued by the Federal Financing Bank. Considered to be United States Government obligations (12 USCS section 2288, 31 USCS section 3124[a]). ● Federal Home Loan Bank - Principal and interest from notes, bonds, debentures, and other such obligations issued by any Federal Home Loan Bank and consolidated Federal Home Loan Bank bonds and debentures (12 USCS section 1433). ● Federal Financing Corporation - Principal and interest from notes, bonds, debentures, and other such obligations issued by the Federal Financing Corporation (12 USCS section 2288(b)). ● Financing Corporation (FICO) - Principal and interest from any obligation of the Financing Corporation (12 USCS Sections 1441[e][7] and 1433). 65

● General Services Administration (GSA) - Principal and interest from General Services Administration participation certificates. Considered to be United States Government obligations (31 USCS section 3124[a]). ● Housing and Urban Development (HUD). Principal and interest from War Housing Insurance debentures (12 USCS section 1739[d]). * Principal and interest from Rental Housing Insurance debentures (12 USCS section 1747g[g]) * Principal and interest from Armed Services Mortgage Insurance debentures (12 USCS section 1748b[f]) * Principal and interest from National Defense Housing Insurance debentures (12 USCS section 1750c[d]) * Principal and interest from Mutual Mortgage Insurance Fund debentures (12 USCS section 1710[d]) ● National Credit Union Administration Central Liquidity Facility - Income from notes, bonds, debentures, and other obligations issued on behalf of the National Credit Union Administration Central Liquidity Facility (12 USCS section 1795k[b]). ● Resolution Funding Corporation - Principal and interest from obligations issued by the Resolution Funding Corporation (12 USCS Sections 1441[f][7] and 1433). ● Student Loan Marketing Association (Sallie Mae) - Principal and interest from obligations issued by the Student Loan Marketing Association. Considered to be United States Government obligations (20 USCS section 1087–2[1], 31 USCS section 3124[a]). ● Tennessee Valley Authority - Principal and interest from bonds issued by the Tennessee Valley Authority (16 USCS section 831n–4[d]). ● United States Postal Service - Principal and interest from obligations issued by the United States Postal Service (39 USCS section 2005[d][4]). ● Certificates on Government Receipts. The following are not considered federal securities and are taxable and should not be included in Column B: Federal Agency Obligations: ● Building and Loan Associations ● Credit Unions, federal or state ● Export-Import Bank of the United States ● Federal Agricultural Mortgage Corporation (Farmer Mac) ● Federal Home Loan Mortgage Corporation (Freddie Mac) Securities ● Federal Housing Administration ● Federal income tax refunds, interest ● Federal National Mortgage Association ● Federal National Mortgage Association (Fannie Mae) Securities ● Government National Mortgage Association (Ginnie Mae) Securities ● Merchant Marine (Maritime Administration) ● Money Market Certificates ● Mortgage Participation Certificates ● Savings and Loan Associations, federal or state ● Small Business Administration Obligations of International Institutions: ● Asian Development Bank ● Inter-American Development Bank ● International Bank for Reconstruction and Development (World Bank) Other Obligations: ● Washington D.C. Metro Area Transit Authority 66

Married Separate Filers: Divide interest income based on ownership of the account or certificate. ● Jointly held: Divide equally between spouses. ● Held in the name of only one spouse: Allocate interest wholly to that spouse. Line 2: Dividends Column A: Include all dividends from mutual funds, investment trusts, or regulated investment companies investing in state and municipal bonds. Column B: Include that portion of any net dividends from a mutual fund, investment trust, or regulated investment company that is attributable to direct federal securities. You cannot take this deduction unless you are provided a statement from the fund giving the percentage of net dividends attributable to direct federal securities. If a return is filed on paper, a copy of the statement must be included with the return to take this deduction. Interest income from repurchase agreements involving federal securities cannot be deducted. Married Separate Filers: Divide dividends based on registered ownership of stock. Jointly held: Divide equally. Held in the name of only one spouse: Allocate dividends wholly to that spouse. Line 3: Partnership, S Corporation, or Fiduciary Modifications Report the amount of Iowa modifications from IA 1065 Schedule K-1, Part II, line 19(a), IA 1120S Schedule K-1, Part II, line 16(a), and IA 1041 Schedule K-1, Part II, line 9. Line 4: Military Retirement Income Enter in column B the amount of military retirement benefits received to the extent included in federal taxable income. Line 5: Social Security Benefits Enter in column B the amount of social security benefits included in federal taxable income from federal form 1040, line 6b. Iowa does not tax Social Security benefits. Line 6: Active Duty Military Pay Enter in column B the amount of active duty military pay. Members of the armed forces, armed forces military reserve, or the national guard in an active duty status can exclude pay received from the federal government for military service performed, to the extent it was included in IA 1040, line 2, federal taxable income, regardless if the taxpayer was an Iowa resident or not. For more information, see Iowa Tax Responsibilities of Servicemembers and Their Spouses. Line 7: IRA/Pension/Railroad Retirement Income If you or your spouse receive federal taxable income from a governmental or other pension or retirement plan you may be eligible to exclude that amount from your Iowa income. To take this exclusion, the income recipient must meet one of the following conditions: 1. 55 years of age or older on December 31, 2025, or 2. Disabled, or 3. A surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion in 2025 on the basis of age or disability. 67

4. A surviving spouse who receives amounts from a deceased spouse’s pension, regardless if the deceased spouse was 55 years of age or older or disabled, if the pension was from employment in a protection occupation, or as a sheriff, deputy sheriff, firefighter, or police officer. Examples of distributions from the following plans that qualify for the exclusion include: ● Distributions from individual retirement plans (IRA) authorized under section 408 of the Internal Revenue Code (IRC) ● Distributions from a simplified employee pension (SEP) plan; ● Distributions from a savings incentive match plan for employees (SIMPLE) retirement plan; ● Distributions from a Keogh plan; ● Distributions from qualified pension plans as described in Treasury Regulation section 1.401-1(b)(1)(i), including IPERS; ● Roth conversion income; ● Distributions from qualified deferred compensation plans governed by the Employee Retirement Income Securities Act (ERISA) including a 401(k), 403(b), and 457(b) plan; ● Annuity distributions pursuant to IRC section 402(a). ● Distributions from an Employee Stock Ownership Plan (ESOP) as defined in section 4975(e)(7) of the IRC Include in this deduction the total amount of railroad retirement income that is included in federal taxable income regardless of age or disability status. For tax years beginning on or after January 1, 2024, a surviving spouse may exclude amounts received from a deceased spouse’s pension, regardless if the deceased spouse was 55 years of age or older or disabled, if the pension was from employment in a protection occupation, or as a sheriff, deputy sheriff, firefighter, or police officer. Pension income must come from a retirement plan provided for under one of the following Iowa Code sections: ● 97A - Public Safety Peace Officers Retirement, Accident, and Disability System ● 97B.49B - Protection Occupation - Iowa Employees Retirement System ● 97B.49C - Sheriff and Deputy Sheriffs Iowa Employees Retirement System ● 410 - Firefighter and Police Officers - Retirement and Disability ● 411 - Retirement System for Police and Firefighters NOTE: Distributions from the following plans are not eligible for the retirement income exclusion: (1) Nonqualified deferred compensation plans (2) Nonqualified annuities - Most nonqualified annuity distributions will report a code of “D” in box 7 on federal form 1099-R For more information, see Iowa Administrative Code rule 701—302.47 and our Retirement Income Tax Guidance. Line 8: Railroad Unemployment Income Enter in column B the amount of any railroad unemployment income from the Railroad Retirement Board. Line 9: Bonus Depreciation/Section 179 Expenses Enter the expense and depreciation adjustment from the IA 4562A and the IA 4562B. Include the IA 4562A and the IA 4562B with your return. Column A should be used to report additions to federal taxable income and Column B should be used to report subtractions from federal taxable income. Report all amounts as a positive number. 68

Line 10: Federal Net Operating Loss prior to 1/1/23 Enter in column A your federal net operating loss carried forward from a year prior to January 1, 2023. Include the IA 124 with your return. Report all amounts as a positive number. Line 11: Other Income Enter other income or adjustments not reported on lines 1-10 which have not already been included on IA 1040, line 2. Write an explanation of the type of adjustment on a separate form or schedule. Column A should be used to report additions to federal total income and Column B should be used to report subtractions from federal total income. Report all amounts as a positive number. Examples of income or adjustments to be reported include: a. Babysitting income Report all babysitting income not already reported on Federal Schedule C, line 1. This modification can only be claimed on Column A. b. RESERVED FOR FUTURE USE c. RESERVED FOR FUTURE USE d. Iowa 529 College Savings Plan or Iowa Advisor 529 Plan (Non-qualifying withdrawals/cancellations) Amounts received from the cancellation of a participation agreement or other non-qualifying withdrawal to the extent the amount was previously deducted on the IA 1040. Qualifying withdrawals may include up to $10,000 ($20,000 for tax years beginning after December 31, 2025) per beneficiary per year for tuition expenses of attending an accredited elementary or secondary (K-12) school in Iowa or an out-of-state elementary or secondary school that educates a beneficiary who is a child “requiring special education” under Iowa Code section 256B.2. The $10,000 per-beneficiary cap applies even if the beneficiary receives money from multiple Iowa 529 or Iowa Advisor 529 Plan accounts. The $10,000 annual cap does not apply to withdrawals used to pay qualified education expenses related to higher education. Qualifying withdrawals include withdrawals for certain expenses related to participation in an apprenticeship program and withdrawals, up to $10,000, used to pay either principal or interest on a qualified education loan on behalf of a beneficiary or a beneficiary’s sibling. If you withdrew funds from a 529 Plan to pay qualified higher education expenses and you received a refund of those funds, the refund amount is not considered a qualifying withdrawal if it is recontributed to the same Iowa 529 Plan account from which it was withdrawn within sixty (60) of the date of the refund. To be a qualifying withdrawal, the recontribution amount cannot exceed the amount of the refund from the qualifying higher education institution. Taxpayers who make a qualifying transfer from a 529 plan to a Roth IRA on or after January 1, 2024 are no longer required to add-back the amount previously deducted when the provisions of IRC § 529(c)(3)(E) are met. This modification can only be claimed on Column A. For the deduction related to Iowa 529 and Iowa Advisor 529 Plans, see Schedule 1, Line 14. e. RESERVED FOR FUTURE USE f. RESERVED FOR FUTURE USE g. RESERVED FOR FUTURE USE h. First-time Home Buyers Account Non-Qualifying Withdrawals Non-qualifying withdrawals from your Iowa First-time Homebuyer Savings Account that were previously deducted on the IA 1040 must be added back on this line, along with any applicable penalty. Non-qualified withdrawals required to be added back here are assessed a penalty equal to 10% of the amount of the withdrawal, unless the non-qualifying withdrawal was made by reason of the death of the account holder or certain other circumstances. If an account holder makes a non-qualifying withdrawal, they are not permitted 69

to claim a deduction for any future contribution to any First-time Homebuyer Savings Account. All withdrawals (qualifying and non-qualifying) from your First-time Homebuyer Savings Account must be reported to the Department on the Iowa First-time Homebuyer Savings Account Withdrawal Form within 90 days of the date of withdrawal. This modification can only be claimed on Column A. For the deduction related to First-time home buyer savings accounts, see Schedule 1, Line 19, code j. i. RESERVED FOR FUTURE USE j. RESERVED FOR FUTURE USE k. RESERVED FOR FUTURE USE l. RESERVED FOR FUTURE USE m. RESERVED FOR FUTURE USE n. Net Premium Tax Credit The Net Premium Tax Credit from the 2024 federal 1040, Schedule 3, line 9 will be reported as Other Income on this line to the extent the insurance contributions were deducted on the Iowa return in a prior tax year. If the deduction is taken on the IA 1040 Schedule A (for tax years prior to 2023), then the federal tax guidance should be followed when addressing the complications due to the impact of the Federal Excess Advance Premium Tax Credit repayment and the Net Premium Tax Credit. However, if the deduction is taken on IA 1040, line 18 (for tax years prior to 2023), then the IA 1040, Schedule 1, Line 11, must reflect the impact of the Federal Excess Advance Premium Tax Credit repayment and the Net Premium Tax Credit. The Iowa expanded instructions for this line and IA 1040, Schedule 1, line 15 set forth the Department’s guidance for the correct reporting of these amounts. This modification can only be claimed on Column A. o. Iowa ABLE Savings Plan Report amounts received from cancellation of accounts or other non-qualifying withdrawals to the extent the amount was previously deducted on the IA 1040. This modification can only be claimed on Column A. For the deduction related to Iowa ABLE Savings Plans, see Schedule 1, line 19, code ii. p. RESERVED FOR FUTURE USE q. RESERVED FOR FUTURE USE r. RESERVED FOR FUTURE USE s. RESERVED FOR FUTURE USE t. RESERVED FOR FUTURE USE u. RESERVED FOR FUTURE USE v. RESERVED FOR FUTURE USE w. RESERVED FOR FUTURE USE x. Other Nonconformity Adjustments See IA 101 Nonconformity Adjustments Schedule. Include IA 101 with your return. y. IA 163 Interest Expenses Adjustment Report any interest expenses adjustment. Include IA 163 with your return. z. RESERVED FOR FUTURE USE aa. Premium Pay Payments Report to the extent included in federal taxable income, up to $1,000, the amount of: 70

1. Premium pay received by a certified peace officer who was designated by the governor of the State of Iowa as an eligible worker. 2. Premium pay received by a correctional officer or medical staff member at a correctional facility who was designated by the governor of the State of Iowa as an eligible worker. 3. Premium pay received by a teacher employed by an independently accredited school or a teacher employed by the State of Iowa who was designated by the governor as an eligible worker. 4. Teacher retention payment received by a teacher that was funded from moneys received by the State of Iowa from the elementary and secondary school emergency relief fund pursuant to the federal Coronavirus Response and Relief Appropriations Act or the American Rescue Plan Act of 2021. 5. Teacher retention payment received by a teacher employed by a private school or specially accredited school, that was funded from the private sector worker premium pay program administered by the department of education that was funded from the State of Iowa moneys. 6. Recruitment and retention bonus received by a child care worker through the recruitment and retention bonus program administered by the department of human services. This modification can only be claimed on Column B. bb. Other Income not Included in Federal Taxable Income that is Taxable for Iowa Purposes Column A (Additions): Other income not included in federal taxable income that is taxable for Iowa purposes Column B (Subtractions): Other income included in federal taxable income that is not taxable Iowa purposes cc. RESERVED FOR FUTURE USE dd. Iowa Tax Credit Adjustments Certain Iowa tax credits require taxpayers who claim those credits to make adjustments to their itemized deductions for the contributions associated with those credits. The amount of the contributions associated with the credits should be added back to taxable income. Those credits include: ● Charitable Conservation Contribution Tax Credit ● Endow Iowa Tax Credit ● Farm-to-Food Donation Tax Credit ● Hoover Presidential Library Tax Credit ● School Tuition Organization Tax Credit This modification can only be claimed on Column A. Line 12: Total modifications to federal total income Add lines 1 through 11. Line 13: Net modifications to federal total income Subtract line 12, column B from line 12, column A. Line 14: Iowa 529 or Iowa Advisor 529 College Savings Plan (Contributions) If you or your spouse participate in the Iowa 529 Plan College Savings Plan or the Iowa Advisor 529 Plan, each may deduct an amount contributed not to exceed $5,800 per beneficiary. This deduction is only available for contributions to Iowa 529 plans. You must be the "participant" in the Iowa 529 plan in order to deduct your contributions. If you are not the "participant" in the Iowa 529 plan, you may not deduct your contributions to that plan. Example: Adam and Tara have 2 children; Charlie and Ruth. Adam opens two 529 accounts – one for Charlie and one for Ruth. Tara also opens two 529 accounts one for Charlie and one for Ruth. Both Adam and Tara can 71

take up to $5,800 per child’s account. Adam and Tara each are eligible for a deduction of up to $11,600. Adam and Tara’s total potential deduction amount is $23,200. Only contributions to these two Iowa 529 plans qualify for a deduction on the Iowa return; however, a rollover from another state's 529 plan to one of the Iowa plans qualifies toward the deduction for Iowa income tax. If you received a refund of any qualified higher education expenses from an eligible educational institution and recontributed the refund amount consistent with Iowa Code section 422.7(22)(c)(1)(f)(i), you may not deduct the recontribution amount when calculating your Iowa taxable income and the recontribution amount will not be considered when determining whether you have met the annual deduction cap. Individuals making a contribution on or before the Iowa income tax return filing deadline (April 30 for calendar year tax filers), excluding extensions, can elect to have that contribution treated as though it was made on the last day of the preceding calendar year, which allows them to claim the income tax deduction for the most recently completed tax year. Line 15: Health Insurance Deduction For taxpayers who are 65 years of age or older and whose Iowa taxable income is less than $100,000, enter 100% of the amount paid for health and dental insurance premiums paid with post-tax funds. Typically, employer health insurance premiums are paid on a pre-tax-basis when they are deducted from wages and are not considered post-tax; and thus, they would not be included as a deduction on this line. Do not include any amount of health insurance that was used as a deduction in the computation of federal taxable income, this includes amounts reported on federal 1040, Schedule A, line 4, and federal 1040, Schedule 1, Part II, line 17. Enter 100% of the amount paid for: ● health insurance premiums paid with post-tax dollars ● supplemental health insurance, such as: ○ Medicare B supplemental medical insurance ○ Medicare D voluntary prescription drug insurance ● dental insurance premiums paid with post-tax dollars ● long-term nursing home coverage premiums paid with post-tax dollars regardless of age Do NOT include: ● “Medicare tax withheld” on your W-2 ● premiums paid with pre-tax dollars ● premiums which are later reimbursed, in the same tax year The $100,000 taxable income limitation is calculated without regard to filing status, meaning that a single taxpayer, a married taxpayer filing separately, and a couple that files married filing jointly will all have a $100,000 taxable income limitation. Health Insurance reported on federal Schedule A, line 1 Qualifying taxpayers who reported medical and dental expenses on federal Schedule A, line 1, may deduct, subject to the income limitation, a portion of the health insurance which was not allowed as a deduction to arrive at federal taxable income. The taxpayer should use a ratio of health insurance premiums to total medical expenses included in Federal Schedule A and apply that ratio to the amount not allowed to be deducted for federal taxable income. Example: Taxpayer T reports the following medical expenses of $10,000 on Federal Schedule A, line 1, the breakdown of the expenses is as follows: ● Doctor bills: $2,000 ● Health insurance premiums: $8,000 72

Federal Schedule A line 3, reports a 7.5% adjusted gross income limitation of $1,950. This would represent the amount of medical expenses which were not allowed in the calculation of federal taxable income. Federal Schedule A, line 4, reports $8,050 of allowed medical and dental expenses. This represents the amount of medical expenses which were allowed in the calculation of federal taxable income. Assuming the $100,000 income limitation is not exceeded, Taxpayer T could include a portion of the health insurance which was not allowed in the calculation of federal taxable income as an Iowa health insurance deduction. The allowed portion would be calculated as follows: Disallowed portion of medical expenses x the health insurance portion of medical expenses/total medical expenses reported on federal Schedule A, line 1. In this example the deduction would be: $1,560 which is $1,950 x ($8,000/$10,000) $1,950 (disallowed portion of medical expenses) x $8,000 (health insurance premiums) / $10,000 (total medical expenses claimed on federal Schedule A, line 1) = $1,560 To calculate taxable income for purposes of this deduction, use the following calculation: Health Insurance Taxable Income Worksheet 1. Report the amount of Iowa taxable income reported on IA 1040, line 4. 1. _____________ 2. Report the following adjustments, if applicable: a. Federal itemized or standard deduction to the extent it does not exceed federal adjusted gross income 2a. _____________ b. Federal personal exemption deduction 2b. _____________ c. Federal Qualifying Business Income Deduction 2c. _____________ d. Social Security income reported on federal 1040, line 6b 2d. _____________ e. Pensions or other retirement income received from a source that is not taxable in Iowa, reported on IA 1040, Schedule 1, lines 4 and 7 2e. _____________ f. Health insurance deduction reported IA 1040, Schedule 1, line 15. 2f. _____________ g. Total of lines 2a through 2f. 2g. _____________ 3. Add line 2g to line 1 3. _____________ If line 3 is less than $100,000 and you are age 65 or older you are eligible to deduct health and dental insurance paid with post-tax funds. If line 3 is $100,000 or more you are NOT eligible to deduct health and dental insurance, IA 1040, Schedule 1, line 15 should be changed to zero. The deduction must be reduced by the amount of any premium reimbursement from Health Reimbursement Arrangements (HRAs). Federal Health Insurance Credits Any Excess Advance Premium Tax Credit repayment from the 2024 federal form 1040, Schedule 2, line 1a may be entered on IA 1040, Schedule 1, line 15 in the year paid for taxpayers who are eligible to claim an Iowa health insurance deduction. Any repayment calculated on your 2025 federal return cannot be included on the 2025 IA 1040, Schedule 1, line 15. The Net Premium Tax Credit from the 2025 federal form 1040, Schedule 3, line 9 may be reportable as Other Income on the 2026 IA 1040, Schedule 1, line 11. The federal Net Premium Tax Credit is reportable income to the extent this credit was a reimbursement for health insurance premiums deducted from Iowa income in a prior year. 73

If the deduction is taken on the IA 1040, Schedule A (For tax years prior to 2023), then the federal tax guidance should be followed when addressing the complications due to the impact of the Federal Excess Advance Premium Tax Credit repayment and the Net Premium Tax Credit. Households Where One Spouse is Age 65 or Older Assuming the taxpayer’s income is below the income limit, a taxpayer age 65 or older may deduct the cost of health benefits coverage or insurance which covers the taxpayer’s spouse or a dependent. If the spouse who is under the age of 65 or dependent pays for the health coverage the expense would not qualify for the deduction. Married Separate Filers: If both spouses have self-employment income, the deduction for self-employed health insurance must be allocated between the spouses in the ratio of each spouse’s self-employment income to the total self-employment income of both spouses. If health insurance premiums are paid directly by one spouse, that spouse will claim the entire deduction. If both spouses paid through a joint checking account, the deduction is allocated between the spouses in the ratio of each spouse’s Iowa taxable income to the total Iowa taxable income of both spouses. For this Iowa taxable income calculation, do not include the health insurance deduction. If one spouse is employed and has post-tax health insurance premiums paid through wages, that spouse will claim the entire deduction. If both spouses pay post-tax health insurance premiums through their wages, each spouse will claim what each spouse paid. Line 16: Capital Gains Deduction You must complete and include the applicable IA 100 with your return to claim the Iowa capital gain deduction. In addition to the instructions and guidance found in the applicable IA 100, flowcharts to assist in determining if a gain qualifies can be found on the Department’s website. Married Separate Filers: Divide the capital gain deduction based on ownership of the asset. ● Jointly held: Divide equally between spouses. ● If other than jointly held: Divide between spouses based on percentage of ownership. Each spouse must file a separate form of the applicable IA 100. Line 17: Iowa Net Operating Loss (NOL) prior to 1/1/23 Enter the Iowa NOL carried forward from a tax year prior to January 1, 2023 from IA 124, Part II, line 5. Include the IA 124 with your return. Line 18: Farm Tenancy Income Exclusion Taxpayers who are retired farmers who have materially participated in a farming business for ten years in the aggregate and have held real property used in a farming business for at least ten years may elect to exclude income received from a farm tenancy agreement covering that real property. Include the IA 125 with the return. For more information about this exclusion, see Iowa Code section 422.7(14) and Iowa Administrative Code rule 701–302.88. Line 19: Other Adjustments Enter the total of other allowable adjustments as listed below. Include an explanation for each adjustment on a separate form or schedule. Column B should be used to report subtractions, deductions and exclusions from federal taxable income. Report all amounts as a positive number. 74

a. Accrual method Taxpayers who had capital gains in 2025 that were reported on the installment method for federal tax purposes and the entire gain was reported for Iowa in a prior year do not have to report installments. b. RESERVED FOR FUTURE USE c. RESERVED FOR FUTURE USE d. RESERVED FOR FUTURE USE e. RESERVED FOR FUTURE USE f. Claim of Right Deduction If income was repaid in the 2025 tax year and was reported and taxed on a prior Iowa return, that income may be deducted on the 2025 tax return. However, it may be to your advantage to take a credit on line 26. You may take either the deduction on Schedule 1, line 19 or take a credit on line 26, but not both. g. RESERVED FOR FUTURE USE See IA 1040, Schedule 1, line 14 h. Disability income exclusion You may exclude from Iowa taxable income a portion of the disability pay you received in 2025 if you meet ALL of the following conditions: ● You received disability pay, and ● You were not yet 65 when your tax year ended, and ● You retired on disability and were totally and permanently disabled when you retired, and ● On January 1, 2025, you had not yet reached the age when your employer's retirement program would have required you to retire. If you meet all of these conditions, include form IA 2440. You MUST complete form IA 2440 to take this exclusion. A doctor's statement must accompany each year's return attesting to the taxpayer's complete and permanent disability. i. RESERVED FOR FUTURE USE j. First-Time Homebuyer Savings Account qualifying contributions You may deduct up to $2,314 ($4,628 for married filing jointly) in qualifying Iowa First-Time Homebuyer Savings Account contributions made during the tax year. This deduction limitation is based on the account holder, so even though you may have contributed to multiple accounts for more than one beneficiary, your total deduction may not exceed $2,314 ($4,628 for married filing jointly). Contributions are only deductible if they are made to accounts that have been designated as First-Time Homebuyer Savings Accounts by submitting the Account Holder and Designated Beneficiary Form to the Department. The Account Holder and Designated Beneficiary Form must be submitted to the Department by the due date of the Iowa individual income tax return, April 30 for calendar year filers, of the calendar year following the year in which you opened the account to the address on that form. The Account Holder and Designated Beneficiary Form must be submitted to the Department separately from your Iowa income tax return. Taxpayers are also required to complete an Iowa Department of Revenue annual report form and include it with their Iowa income tax return. Complete and send a First-time Homebuyer Withdrawal Form, 41-163 to the Iowa Department of Revenue when money is withdrawn. 75

NOTE: this form must be submitted to the Department within ninety (90) days of the date of any withdrawal of funds in any amount from the First-Time Homebuyer Savings Account. Interest and earnings income from a qualified First-Time Homebuyer Savings Account are exempt from Iowa individual income tax. k. RESERVED FOR FUTURE USE l. RESERVED FOR FUTURE USE m. RESERVED FOR FUTURE USE n. RESERVED FOR FUTURE USE o. RESERVED FOR FUTURE USE p. Contributions to injured veterans program An Injured Veterans Grant Program is available through the Iowa Department of Veterans Affairs. Money appropriated for these grants will be given to veterans injured in a combat zone after September 11, 2001. The grants cannot exceed $10,000 per injured veteran. The Department of Veterans Affairs may also receive money from any public or private source for purposes of providing grants to injured veterans. A deduction is allowed for the amount paid by a taxpayer to the Department of Veterans Affairs for the purposes of providing grants to the Injured Veterans Grant Program to the extent that amount is included in federal taxable income. q. Grants from injured veterans program The amount of Department of Veteran Affairs grant money received by an injured veteran that is included in the veteran's federal adjusted gross income is not included in the veteran's Iowa taxable income. r. In-home health care To the extent included in federal taxable income, deduct any State Supplementary Assistance payments received for unskilled in-home health-related care services to a family member. s. Iowa Veterans Trust Fund Income from the Iowa Veterans Trust Fund for the following items can be excluded: ● Travel expenses directly related to follow-up medical care for wounded veterans and their spouses ● Unemployment assistance during a period of unemployment due to prolonged physical or mental illness or disability resulting from military service t. Military exemptions For more information see Tax Responsibilities of Servicemembers and Their Spouses u. RESERVED FOR FUTURE USE v. Organ transplant expenses A deduction is allowed for taxpayers for unreimbursed expenses relating to a human organ transplant to the extent the amount is included in federal taxable income. The taxpayer, while living, who donates all or part of a designated human organ can claim a deduction for unreimbursed expenses such as travel expenses, lodging expenses, and lost wages. The deduction is limited to $10,000, and a taxpayer can only claim this deduction once. w. Biodiesel Production Refund Any biodiesel production refund received is not included as income for Iowa individual income tax purposes. x. Segal AmeriCorps Education Award Payments Federal Segal AmeriCorps education award payments are excluded from Iowa taxable income. 76

y. RESERVED FOR FUTURE USE z. RESERVED FOR FUTURE USE aa. Victim compensation awards To the extent included in federal taxable income, the following items can be excluded from Iowa taxable income: ● Amounts of victim compensation awards paid under the victim compensation program administered by the Department of Justice under Iowa Code section 915.81 ● Amounts of victim restitution payments received pursuant to Iowa Code chapters 910 and 915 ● Amounts of damages awarded by a court, and received by a taxpayer, in a civil action filed by the victim against an offender bb. Wages paid to certain individuals (ex-offenders & disabled) If you operate a business, you may qualify for an additional deduction of 65% of the wages paid in the first 12 months up to a maximum deduction of $20,000 per qualifying new employee. This deduction is in addition to the wage deduction you were allowed on federal Schedule C. To qualify, the new employee(s) must be disabled or an ex-offender on parole, probation, or in a work release program. All types of businesses may qualify for this deduction for hiring qualifying ex-offenders. However, the deduction for hiring qualifying persons with disabilities is restricted to certain small businesses. Further information is available online: ● Benefit for hiring ex-offenders ● Benefit for hiring persons with disabilities cc. RESERVED FOR FUTURE USE dd. Other federal adjustments (IA 126 only) Other federal adjustments from Schedule 1, Part II, prior to the calculation of federal 1040 line 11 (federal AGI) not taken elsewhere on the IA 126. For use on the IA 126 only. ee. Educator expenses Educators can deduct out-of-pocket educator expenses of up to $200 in excess of the federal deduction limitation ($300), per eligible educator. Do not include expenses already deducted from federal taxable income. ff. RESERVED FOR FUTURE USE gg. Nonresident Electric Utility Worker Training and Emergency Response Work Reciprocity The income a nonresident individual earns for performing emergency response work for an electric utility in Iowa under a mutual aid agreement between Iowa and the state in which the nonresident lives is excluded from Iowa individual income tax. Income received by a nonresident individual for training by an electric utility in Iowa is also excluded. hh. Rapid Response to State Disasters Out-of-state businesses and individuals performing disaster or emergency-related work in Iowa are not subject to Iowa income tax or withholding. The disaster response period starts ten days before the state-declared or presidential-declared disaster and ends sixty days after the end of the declared state disaster or emergency. ii. Iowa ABLE (Achieving a Better Life Experience) Savings Plan Trust Contributions to a qualified ABLE savings plan trust account made during 2025, on behalf of a designated beneficiary, are deductible from Iowa individual income tax up to a maximum amount, $5,800, allowed per beneficiary per year for purposes of the Iowa ABLE savings plan trust in Iowa Code chapter 12I. Interest and earnings income from an ABLE savings plan trust account are exempt from Iowa individual income tax. 77

jj. RESERVED FOR FUTURE USE kk. Broadband Infrastructure Grant Enter the amount of a federal, state, or local grant provided to a communications service provider during the tax year, to the extent included on Federal Schedule C, line 1, if the grant was used to install broadband infrastruc- ture that facilitates broadband service in targeted service areas at or above the download and upload speeds. ll.RESERVED FOR FUTURE USE mm. RESERVED FOR FUTURE USE nn. Education Savings Account Taxpayers who receive payments from an education savings account may exclude that from Iowa taxable income to the extent it was included in federal taxable income. oo. RESERVED FOR FUTURE USE See IA 1040, Schedule 1, line 18 pp. Student Loan Repayments by Employers Taxpayers may deduct income resulting from the payment by an employer of the taxpayer, whether paid to the taxpayer or to a lender, of principal or interest on any qualified education loan incurred by the taxpayer. Married Separate Filers: When the adjustment is attributable to a specific spouse, it is taken by that spouse. When the adjustment is not attributable to any one spouse, it must be prorated based on each spouse’s taxable income. Line 20: Net modifications to federal taxable income Add lines 14 through 19. Enter as a (negative) number. Line 21: Net Iowa Modifications Add lines 13 and 20. If less than zero, enter as a (negative) number. Enter here and IA 1040, line 3. 78

Step 9 Third Party Designee Step: 9 Step Subject: Third Party Designee If the taxpayer would like to designate an individual to discuss this return with the Department, complete this section with that individual’s information. An individual listed in this section will be able to discuss and receive information from the Department about this return. This authorization is specific to the individual income tax return for this tax year. If the taxpayer files an amended return for the tax year, the authorization applies to that as well. If the taxpayer wishes to have this individual represent the taxpayer on other matters, or for other tax years, the taxpayer must submit an IA 8821 Tax Information Disclosure Designation or IA 2848 Power of Attorney. This authorization is limited to the ability to discuss the return and receive return information from the Department. It does not authorize the individual to act on behalf of the taxpayer or to appoint another person as Power of Attorney for the taxpayer. Deceased Taxpayer: If the taxpayer is deceased, check the box below the signature line, and enter the date of death. If your spouse died and you are filing a joint return, write on the deceased’s signature line “Filing as a surviving spouse,” check the box, and enter the date of death. If you have legal authorization to file for the decedent, sign the return with your legal title or authorization. Also, enclose any forms required to be filed with your federal return, such as federal form 1310 or a copy of the court certificate showing your appointment as a personal representative of the decedent. You must have a representative certification on file to act on behalf of the deceased taxpayer. Signature Step: 10 Step Subject: Signature Returns are not processed and refunds are not issued if returns are not signed. If you and your spouse file a joint return, both of you must sign the return. Paper-filed returns must be signed by hand or via a digital signature with a digital certificate. Stamped or typed signatures are not accepted. The following information is optional to include but assists the Department in confirming the identity of taxpayers: ● Daytime phone number. ● Email address ● Driver’s license or State issued ID number If a paid tax professional prepared your return, the preparer must also sign and enter a daytime telephone number, identification number, and the firm’s FEIN. The Department will now allow electronic signing of the Declaration for eFile Return form via remote transaction. Returns will not be accepted if the electronic signatures are not digitally or electronically certified. This allows a taxpayer to electronically sign a Declaration for eFile Return form when the Electronic Return Originator is not physically present with the taxpayer. View information on Confidentiality, Disclosure, and Authorized Representation. This page will provide links to the appropriate forms, as well as guidance on how to determine which form to use to best fit your needs.

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Deceased Taxpayer Check the box below the signature line, and enter the date of death. If your spouse died and you are filing a joint return, write on the deceased’s signature line “Filing as a surviving spouse”, check the box below the signature line, and enter the date of death. If you have the legal authorization to file for the decedent, sign the return with your legal title or authorization. Also, include any forms required to be filed with your federal return, such as federal form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, or a copy of the court certificate showing your appointment as a personal representative of the decedent. Spouse Unable to Sign If your spouse cannot sign because of a medical condition and requests that you sign the return, sign your spouse's name in the proper place followed by the word "by" (your signature), followed by the word “spouse.” Be sure to also sign in the space provided for your signature. If you are the guardian for your spouse who is mentally incompetent, you may sign the return for your spouse as guardian. Minor Child If you are filing a return for a minor child who cannot sign the return, sign the child's name followed by the word "by" (your signature), followed by your relationship, such as "parent" or "guardian for minor child." The parent or guardian must submit a Representative Certification form in order to allow the Department to discuss the return and to act on behalf of the minor child. Representative Certification Form If a representative has authority to act on behalf of a taxpayer, they must complete and submit a Representative Certification Form prior to receiving the taxpayer’s confidential taxpayer information or acting on behalf of the taxpayer.

Contacts Where's My Iowa Refund? revenue.iowa.gov/wheres-my-refund govconnect.iowa.gov NOTE: If this is a joint tax return, enter the first SSN or ITIN listed on the tax return. You will need to enter your SSN, tax year, and exact refund amount requested (dollars and cents) to check the status of your refund. Questions about Iowa Taxes? revenue.iowa.gov | idr@iowa.gov 515-281-3114 or 1-800-367-3388 Questions about Federal Income Taxes? Internal Revenue Service, irs.gov 800-829-1040 80

Amending Tax Returns To amend your return you must file an IA 1040 and include an IA 102 Iowa Amended Return Schedule. Amended returns may be submitted electronically. Check with your software vendor regarding whether filing an amended return electronically is supported. Amended returns should not be submitted on the same day as the original return. To correct errors or misstatements on your original filing, you must submit a new IA 1040 with an IA 102. Include an explanation of the changes. If you file an amended federal return, include the federal 1040X with your submission. If you owe additional tax: Calculate the tax, and any penalty and interest due. You may make your payment online for the current year through Govconnect.iowa.gov direct debit or with a credit/debit card, fees apply).To pay by check or money order, print a payment voucher to send in with your check. Visit the Department’s website at revenue.iowa.gov/easypayiowa for more information about your payment options. Are You a Resident of Iowa for Tax Purposes? A person can be a resident of only one state at any given time. Usually, it is clear which state that is. Normally, it is the state in which one lives and works. Occasionally, however, the question of residency can be a little more difficult to answer. If a person moves during the year, or for some reason spends an extended period of time outside the state, the actual state of residence may not always be as obvious. Intent of Individual The issue of residency hinges mainly on the intent of the individual. That intent is often clear and easy to determine. If a person moves from one state to another with the intent of changing residence, that person will take certain actions. They will typically take obvious steps to eliminate ties and contacts with the former state, and establish similar ties and contacts with the new state. In some cases, however, the actions taken by the individual may create some confusion as to the actual intent. Factors to Measure Intent When a person's intent is not readily apparent, several factors are used as a guide to measure that intent. No single factor can be used. All the facts and circumstances of the case must be weighed in their totality to determine a person's intent and residency. Some of the factors used in this analysis are listed below: ● Are you registered to vote in Iowa? ● Have you voted (in person or by absentee ballot) in an Iowa election? ● Do you or any of your family attend Iowa schools? ● Do you have an Iowa telephone listing and service? ● Do you receive your mail in Iowa? ● Do you have an Iowa driver's license? ● Do you hold any business or professional licenses in Iowa? ● Do you hold an Iowa hunting or fishing license? ● Is your automobile registered in Iowa? Do you have Iowa license plates? ● Are any boats or recreational or all-terrain vehicles registered in Iowa? ● Do you own a home in Iowa? ● Is your home larger than your home in any other state? ● Do you claim homestead or military credits for property tax? 81

● Do you keep your valuables, mementos, collections, jewelry, or prized personal possessions in Iowa? ● Do you live in Iowa for more days of the tax year than in any other state? ● Do you live in any other state for more days of the tax year than in Iowa? ● Do you receive income from an Iowa source? ● Do you receive services from doctors, dentists, attorneys, CPAs, or any other professionals located in Iowa? ● Do you have an active membership in an Iowa church, club, professional or civic organization in Iowa, and participate as a result of the membership? ● Do you claim a benefit on the federal income tax return based on an Iowa home being the principal place of business? ● Do you have active checking or savings accounts or use of safe deposit boxes located in Iowa? ● Do you have a location of employment in Iowa or active participation in a business within Iowa? ● Is Iowa the state of residency in your Last Will and Testament? Please keep in mind that no single factor will typically be sufficient to make a residency determination. When viewed as a whole, the answers to the above questions will generally give a good indication as to the individual's intent, and therefore, to the state of residence. Residency Rules For more details on the subject of residency, including several examples, please refer to Iowa Administrative Code rule 701—300.17. Servicemembers and their Spouses Servicemembers and their spouses should reference Iowa Tax Responsibilities of Servicemembers and their Spouses for additional information. Certified Tax Returns for Nonresidents Residents of other states who need a certified copy of the Iowa return for filing with their state of residence must include an extra copy of their Iowa return and a self-addressed stamped envelope when they file. A note stating the purpose of the extra copy should be included. The Department will stamp the copy and return it to you. Confidentiality Taxpayers provide confidential tax information to the Iowa Department of Revenue in the form of individual income tax returns and other Iowa schedules, forms, and supporting documentation. Your tax information is kept confidential by the Department, with a few exceptions as required by law. Most notably, information from your return may be made available to the Internal Revenue Service or to tax officials of another state for tax administration purposes. Any Iowa Department of Revenue employee who discloses tax return information without legal authority is guilty of a serious misdemeanor, subject to a fine, incarceration, and civil damages. The Department will discuss confidential tax information only with the taxpayer, unless the taxpayer has properly authorized another individual to speak with or represent the taxpayer regarding the relevant tax year and issue. For more information, see Confidentiality, Disclosure, and Authorized Representation. If you do not provide individual income returns or the necessary information to support the return, or if you provide fraudulent information, you may be charged penalties and interest and may be subject to criminal prosecution. 82

Credits: Refundable or Nonrefundable - What's the Difference? Although Iowa and the IRS may have the same type of credit, it may or may not be refundable on both returns. Nonrefundable Tax Credit A nonrefundable tax credit will reduce your tax liability. This credit may reduce your tax liability down to zero, but it will never generate a refund. An example of this type of credit is the Tuition and Textbook Credit or any other credit taken in Step 5 of the IA 1040 individual income tax form. Refundable Tax Credit A refundable tax credit will also reduce your tax liability. However, if this tax credit exceeds your tax liability it will generate an Iowa refund. An example of this type of credit is the Iowa Child and Dependent Care Credit or any other credit taken in Step 6 of the IA 1040 individual income tax form. Do You Owe Tax? Here Are Your Payment Options Payments through your Tax Software Direct Debit payment with the income tax return A Direct Debit is a tax payment electronically withdrawn from your bank account through the tax software used to electronically file individual income or corporation income tax returns. You will need to enter your bank routing number and your bank account number. NOTE: You receive credit for making the payment on the date you indicate the Department should withdraw it from your bank account. This may be the date you send it, or a date in the future if you request the payment to be warehoused for withdrawal at a later date. Please allow a week after the withdrawal date for your bank to post it to your account. Why Direct Debit through your tax software? (Check with your software vendor for the features that are provided.) ● You control the date when the payment is withdrawn from your bank account. ● You may pay the entire amount or a portion of the balance due. ● You choose whether the payment is withdrawn from your checking or savings account. Need to cancel a Direct Debit payment made through your tax software? ● The taxpayer or an authorized individual may email the Department's Payment Processing team at IDREFT@iowa.gov. ● Include this information in your email: 1. Taxpayer name and your name if you are not the taxpayer 2. Payment amount 3. Scheduled pay date 4. Taxpayer's daytime phone number 5. Last four digits of taxpayer’s Social Security Number ● PAYMENT PROCESSING will return a cancel confirmation email. Payments through GovConnectIowa ● Visit govconnect.iowa.gov ● Using the Quick Pay option and selecting Make a Return Payment without setting up a GovConnectIowa logon will not provide an option to view history of payments made. ● Create a logon to take full advantage of GovConnectIowa including viewing up-to-date balance, return status, and payment history. 83

NOTE: If paying by credit/debit card, a service fee will be charged by the credit card processing vendor. This service fee is retained by the vendor and is not revenue to the Iowa Department of Revenue. Need to cancel a Direct Debit payment made through GovConnectIowa? For more information, visit GovConnectIowa Help. Other Payment Information Need to change the timing of a payment or update bank account information? We cannot make these changes for you, you must cancel the payment (see above) and resubmit a payment in one of the following ways: ● Through your tax software ● Pay through our website using govconnect.iowa.gov ● Mail us a check or money order Payments by Check or Money Order... Mail a check or money order with an IA 1040V Payment Voucher payable to: Iowa Department of Revenue. Payments must be at least $1. Write the type of tax being paid and the tax year being paid on the check or money order. The address for mailing is on the IA 1040V Payment Voucher. If you do not have a 1040V Payment Voucher: ● Go to GovConnectIowa ● Select Print a Payment Voucher within the Financial Services panel ● Follow the on-screen prompts to create the payment voucher Payment Plans Pay as much as you can, and you will be billed for the balance due. You can make payments prior to receiving a bill from the Department. NOTE: You must have received a bill from the Department before you can set up a formal payment plan. Iowa does not have a formal payment plan option prior to receiving a bill from the Department. However, if you are unable to pay your Iowa tax liability in full, file the return and pay what you can by the due date. If you do not file your return by the due date, and at least 90% of the correct tax is not paid, you owe an additional 5% late penalty on the unpaid tax. By filing the return on time, even if at least 90% of the correct tax due isn’t paid, you only owe an additional 5% late penalty on the unpaid tax. You may pay online through govconnect.iowa.gov If paying by check or money order, mail a check or money order with an IA 1040V Payment Voucher payable to Iowa Department of Revenue. Write the type of tax being paid and the tax year being paid on the check or money order. Do not send in any payment of less than one dollar. The mailing address is on the voucher. You will be billed for the balance after your return is processed, including any penalty or interest that may be due. We encourage you to make payment prior to receiving a bill in order to reduce the interest amount due. Interest will accrue on the first of each month until the balance is paid. Questions about payment plans? revenue.iowa.gov/pay-delinquent-tax 84

Estimated Payments Iowa Residents Iowa residents who expect to owe Iowa income tax of $200 ($1,000 for tax years beginning on or after January 1, 2026) or more from income not subject to withholding tax must make estimated tax payments to avoid a penalty for underpayment of estimated tax. For additional information, see IA 1040ES instructions. Farming or Commercial Fishing If at least two-thirds of your income is from farming or commercial fishing, you may avoid penalty for underpayment of estimated tax in one of the following ways: (1) You may pay the estimated tax in one payment on or before January 15, 2026, and file your return by April 30, 2026, or (2) you may file your return and pay the tax in full by March 1, 2026.* Nonresidents Nonresidents with nonwage income from Iowa, see IA 1040ES instructions. Married Taxpayers filing Jointly Estimated tax payments should be filed under the primary taxpayer’s name and SSN. Married Taxpayers filing Separately Each individual required to make estimated tax payments must file an estimated payment under their name and Social Security Number. How to Pay You can set up your payments to be automatically deducted from your bank or credit union account using govconnect.iowa.gov, in person, or by mail. Simply select Individual Income Estimate Tax and the payment option that works best for you using EasyPay Iowa. ● Installment 1 – April 30 ● Installment 2 – June 30 ● Installment 3 – September 30 ● Installment 4 – January 31 The tax period listed on the payment voucher, if applicable, should reflect the end date (commonly December 31) for which the payment is to be applied. The installment date should not be listed as the tax period. * If the due date falls on a Saturday, Sunday, or holiday as defined in Iowa Code section 421.9A, then the due date is the following day that is not a Saturday, Sunday, or holiday. Extension Requests The Department does not have an extension form to obtain additional time to file. A federal extension does not apply for Iowa purposes. If at least 90% of your total tax liability is paid by April 30, 2026, you will automatically have until October 31, 2026, to file your return timely. You will not be charged a late file penalty. However, you may owe an IA 2210 penalty for failure to make estimated payments. You will owe interest on any tax still due after April 30, 2026.* * If the due date falls on a Saturday, Sunday, or holiday as defined in Iowa Code section 421.9A, then the due date is the following day that is not a Saturday, Sunday, or holiday. 85

How to determine if 90% of the tax you owe has already been paid: Multiply the amount on IA 1040, line 20 by 90% (.90). If the result is equal to or less than the amount on IA 1040, line 30, an extension is automatic. Example: ● Total state and local tax before contributions from IA 1040, line 20 = $5,000 ● $5,000 x 90% = $4,500 ● Total credits from IA 1040, line 30 = $4,000 90% of the tax has not been paid. No extension is available to this taxpayer. This taxpayer will owe penalty and interest on the unpaid tax. Example: ● Total state and local tax before contributions from IA 1040, line 20 = $3,000 ● $3,000 x 90% = $2,700 ● Total credits from IA 1040, line 30 = $2,850 This taxpayer receives an automatic extension until October 31, 2026 and will pay only interest on the unpaid tax. If you need to make a tax payment to meet the 90% requirement, you may: ● arrange payment from your bank account, or by credit/debit card through govconnect.iowa.gov. ● use the IA 1040V payment voucher form Farmers and Commercial Fishers If at least two-thirds of your income is from farming or commercial fishing, you may avoid penalty for underpayment of estimated tax in one of the following ways: 1. Pay the estimated tax in one payment on or before January 15, 2026, and file the Iowa income tax return by April 30, 2026, or 2. File the Iowa income tax return and pay the tax due in full on or before March 1, 2026. An IA 2210F is required to be filed with the Iowa income tax return, and the applicable box on IA 1040, Line 35 must be checked * If the due date falls on a Saturday, Sunday, or holiday as defined in Iowa Code section 421.9A, then the due date is the following day that is not a Saturday, Sunday, or holiday. Federal Bonus Depreciation / Section 179 Bonus Depreciation Bonus depreciation is available for Iowa tax purposes for assets placed in service in a tax year beginning on or after January 1, 2021. See IA 4562A&B for required adjustments for assets placed in service in a tax year beginning before January 1, 2021. Section 179 For tax years beginning on or after January 1, 2020 the IRC section 179 limitations and phase-out threshold for Iowa purposes are the same as federal. See IA 4562A&B for required adjustments. 86

Injured Spouse Injured spouse: The federal “injured spouse” form is not recognized by the State of Iowa when using filing status 2 (married filing jointly). If your filing status is married filing jointly, your refund will be used to pay a federal, state, county, or city debt owed by either spouse. See Refunds May Be Used to Pay Debt. Relief from Joint and Several Liability Married taxpayers are generally jointly and severally liable for the total tax, penalty, and interest from a joint return. However, a person who meets the criteria for relief from joint and several liability established in Section 6015 of the Internal Revenue Code may be relieved of liability for an understatement of tax that is attributable to erroneous items of the other spouse. A married taxpayer filing a return with a spouse can qualify for relief from joint and several liability only if the taxpayers file a joint return. A married taxpayer who files a separate return that has been accepted by the state will not be eligible for relief from joint and several liability. Time Period for Requesting Relief from Joint and Several Liability Relief from joint and several liability must be requested within two years of the date on the Notice of Assessment. However, an extended time period to request equitable relief is available for taxpayers who satisfy the criteria under Section 6015(f) of the Internal Revenue Code and, if applicable, Internal Revenue Service Notice 2011-70. For additional information related to relief from joint and several liability, see Iowa Administrative Code rule 701–300.15. How to Request Innocent Spouse Relief: 1. Follow the process described in the Notice of Assessment 2. Access the Innocent Spouse Relief Request on GovConnectIowa 3. Complete the on-screen prompts Notification of Non-Requesting Spouse When a taxpayer requests innocent spouse relief, the Department may notify the nonrequesting spouse or former spouse of the request for relief. The notice will advise the nonrequesting spouse or former spouse of their right to intervene by filing a notice of intervention with the Department. Iowa and Illinois Reciprocal Agreement Iowa's only income tax reciprocal agreement is with Illinois. Any wages or salaries earned by an Iowa resident working in Illinois are taxable only to Iowa and not to Illinois. Any wages or salaries earned by an Illinois resident working in Iowa are taxable only to Illinois and not to Iowa. Iowa will tax any Iowa-source income received by an Illinois resident that is not from wages or salaries. Illinois may tax any Illinois-source income received by an Iowa resident that is not from wages or salaries. Iowa gambling winnings and unemployment compensation for employment in Iowa are examples of income that are not wages and salaries and, therefore, not covered under the Iowa-Illinois Reciprocal Agreement. Iowa Resident Working for Wages or Salary in Illinois An Iowa resident working for wages or salary in Illinois should complete and file Illinois form IL-W-5-NR Employee's Statement of Nonresidence in Illinois with the employer so that the employer will withhold Iowa income tax. 87

Illinois Resident Working for Wages or Salary in Iowa An Illinois resident working for wages or salary in Iowa should complete and file the Employee's Statement of Nonresidence in Iowa, 44-016 with the employer so that the employer will withhold Illinois income tax. Tax Withheld in Error If Illinois income tax has been mistakenly withheld from the wages or salary of an Iowa resident, the Iowa resident must file an Illinois income tax return to get a refund. Any questions on how to complete the Illinois return should be directed to the Illinois Department of Revenue at 800-732-8866. Illinois residents who had Iowa income tax withheld in error from their wages and have no other Iowa-source income must file an Iowa income tax return requesting a refund. They should complete IA 1040, Steps 1, 2, and 3, show “0” on IA 1040, lines 1, 4, and 20, write “Illinois resident tax withheld in error” on the face of the return. Also include an IA 126 with Part I completed showing $0 of Iowa source income. Part II of the IA 126 does not need to be completed in this situation. Enter the Iowa tax withheld on IA 1040, lines 28 and 30 through 32. Sign the return and include copies of all W-2s with the return. Copies of federal and Illinois returns must be included. Iowa Income Tax Responsibilities of Native Americans Definitions ● "Native Americans" means all persons of Native American Indian descent who are members of any recognized tribe. ● "Settlement" means all land within the boundaries of any recognized Native American settlement or reservation within the State of Iowa. Native Americans living on the settlement of their own tribe Taxable Income: ● Wages for working off the settlement ● Income from business or real estate located off the settlement Exempt Income: ● Wages from working on the settlement ● Income from business or property located on the settlement ● Interest, dividends, and other income from intangibles, regardless of where the bank accounts, financial institutions, etc., are located Native Americans living off the settlement of their own tribe If Residents of Iowa: ● Taxed in the same manner as other residents. (Income from working on the settlement is taxable.) If Nonresidents of Iowa: ● Taxed in the same manner as other nonresidents. (Income from working on the settlement is taxable.) Persons who are not tribal member Native Americans, regardless of whether they live on or off the settlement If Residents of Iowa: ● Taxed in the same manner as other residents. (Income from working on the settlement is taxable.) If Nonresidents of Iowa: ● Taxed in the same manner as other nonresidents. (Income from working on the settlement is taxable.) 88

Iowa Tax Responsibilities of Servicemembers and their Spouses Resident Servicemembers Iowa residents who are members of the armed forces, armed forces military reserve, and the National Guard in an active duty status can exclude pay received from the federal government for military service performed. “Active duty,” for Iowa tax purposes, has the same meaning as defined in 10 U.S.C. § 101(d)(1). Iowa residents who are members of the military should include the active duty pay received from the federal government for military service performed as income on the IA 1040, line 1a and deduct the same active duty pay on IA 1040, Schedule 1, line 6. These individuals should provide an IA W-4 to the payer of this income, claiming exemption from withholding on active duty pay. Servicemembers claiming this exclusion should be prepared to send a copy of their active duty military orders to the Department if requested to do so. When must a resident servicemember file an Iowa income tax return? If a servicemember is an Iowa resident, they must file an Iowa individual income tax return if they: ● are married and their combined income* totals more than $13,500 ($32,000 if you or your spouse is 65 or older on 12/31/24) ● are single and total income* is more than $9,000 ($24,000 if 65 or older on 12/31/24) ● have income* of $5,000 or more and is claimed as a dependent on another person's Iowa return ● are filing as head of household or qualifying surviving spouse and total income* is more than $13,500 ($32,000 if you or your spouse is 65 or older on 12/31/24) *Income does not include pay received from the federal government for military service performed by members of the armed forces, armed forces military reserve, and the National Guard in an active duty status. School District Surtax (Iowa Administrative Code rule 701—304.1) Each person has one and only one state of residence. A person may be a resident of a state even though he or she does not actually live in the state. A military person does not lose “home state” residency simply by being absent from the state while in the military. (Servicemembers Civil Relief Act) What income is subject to Iowa tax? (Iowa Administrative Code rule 701—302.76) Military pay to Iowa residents must be included on the IA 1040, line 1a to the same extent it is included on the federal return regardless of where the person is stationed when it is received. Other income earned by an Iowa resident stationed in or out of Iowa is also taxable to Iowa to the same extent it is taxable on the federal level. If any of that income is correctly taxed by another state, then Iowa allows an Out-of-State Tax Credit on the IA 1040. This credit is calculated on the IA 130 form, which must be included with the IA 1040 along with a copy of the other state's return. Active duty pay Iowa resident members of the armed forces, armed forces military reserve, and the National Guard in an active duty status can exclude pay received from the federal government for military service performed. “Active duty,” for Iowa tax purposes, has the same meaning as defined in 10 U.S.C. § 101(d)(1). NOTE: Members who are employed full-time in the National Guard (as defined in Title 32 of the U.S. Code) are not considered in an active duty status, so their pay is not excluded from Iowa tax. Include all income on line 1 with other W-2, 1099, or W-2G income. Qualifying military income is then deducted on IA 1040, Schedule 1, line 6. 89

Combat zone pay Income excluded by the federal government is also excluded for Iowa income tax purposes. For example, combat zone pay is excluded on the Iowa return because it is excluded for federal income tax purposes. The federal Military Family Tax Relief Act of 2003 provides for a number of tax breaks related to military personnel. Iowa follows the federal treatment of the military adjustments to gross income. The Internal Revenue Service (IRS) website is your best source of qualifying combat zones and tax breaks related to military personnel. See www.irs.gov/individuals/military. Military Student Loan Exemption (Iowa Administrative Code rule 701—302.63) Military student loan repayments included in federal taxable income are exempt from Iowa income tax if the following criteria are met. This exemption may be taken by persons in the: ● armed forces ● armed forces military reserve ● National Guard The individual must be on active duty at the time of the loan repayment. If the loan repayment amount is included on IA 1040, line 2, then deduct it on IA 1040, Schedule 1, line 19 using code “t”. Military Retirement Pay Retirement pay for military service in the United States Armed Forces, the Armed Forces Military Reserve, or the National Guard is eligible for exemption from Iowa income tax, without regard for age or disability. The Army, Navy, Air Force, Marine Corps, and Coast Guard make up the Armed Forces. Only military retirement pay received from the Defense Finance and Accounting Service (DFAS), or a similar source, is eligible for the exemption. Retirement pay received from other sources, including the Office of Personnel Management (OPM), does not qualify for the exemption. In particular, retirement pay resulting from participation in the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS) does not qualify for the exemption. For more details, see Iowa Administrative Code rule 701—302.80. Deduct qualifying military retirement pay included in federal taxable income on IA 1040, Schedule 1, line 4. Exclusion of Distributions from Retirement Plans by National Guard members and members of military reserve forces of the United (Iowa Administrative Code rule 701—302.58) If a National Guard member or member of the military reserve is called to National Guard duty or federal active duty and makes a withdrawal from a qualified retirement account of the member, the amount of the withdrawal is not subject to Iowa income tax or state tax penalty. If this income is reported as taxable pension income, enter that amount on the IA 1040, Schedule 1, line 4. Deferral of Collection of State Income Tax (Servicemembers Civil Relief Act) The Servicemembers Civil Relief Act (SCRA) is a federal law that, among other things, requires the Department to allow a deferral of collection of state income tax if a servicemember’s ability to pay is materially affected by their military service. The deferral lasts for only a period of up to 180 days after termination or release from military service. The SCRA only defers collection of income tax that has fallen due before or during military service. Servicemembers must still file their income tax returns, unless their duty to file is suspended by another authority. 90

Do You Qualify? 1. You must be a “servicemember.” ○ Members of the Army, Navy, Air Force, Marine Corps, Coast Guard, and commissioned corps of the National Oceanic and Atmospheric Administration and of the Public Health Service are servicemembers under the SCRA. ○ Members of the National Guard and reserves are servicemembers under the SCRA only if those members are serving under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days. 2. You must serve during a period of “military service.” ○ In the case of Army, Navy, Air Force, Marine Corps, or Coast Guard, a servicemember is serving in a period of military service if they are on “active duty.” ○ In the case of commissioned officers of the National Oceanic and Atmospheric Administration or Public Health Service, a servicemember is serving in a period of military service if they are in “active service.” ○ In the case of members of the National Guard and reserves, a servicemember is serving in a period of military service if they are serving under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days. 3. You must be “materially affected” by your military service. ○ The Department will consider all relevant facts and circumstances in determining whether servicemembers' ability to pay their income tax has been materially affected by their military service. 4. You must be in “filing compliance.” ○ Servicemembers can receive a deferral of collection of income taxes only for periods in which they have filed an income tax return. 5. You must file a written request for deferral. ○ Servicemembers must make a written request for deferral of collection of income to the Department by completing the Request for Deferral of Iowa Income Tax form. Servicemembers must submit a copy of their orders with their Servicemember Request for Deferral of Iowa Income Tax (41-024). Forgiveness of Tax (Iowa Administrative Code rule 701—301.11) Iowa income tax is forgiven if an individual’s federal income tax was forgiven because: ● the individual was killed in a combat zone, or ● the individual is missing in action and presumed dead, or ● the individual was killed outside the United States due to terrorist or military action while they were a military or civilian employee of the United States Single status Iowa income tax is forgiven for the tax year in which the individual was killed or was missing and presumed dead and for the tax year prior to the year of death. Married / year of death All tax is forgiven for the year of death if the deceased was married at the time of death and his or her filing status is married filing joint for that tax year. Married / prior year All tax is forgiven if the deceased was married at the time of death and a joint return or a married filing separate return was filed for the year prior to death. Please note that if the deceased had filed using the married filing separately on the combined return status, only the state income tax attributable to the deceased 91

will be forgiven. Prior-year returns cannot be amended to change the filing status. (Iowa Administrative Code rule 701—301.11) Applying for Forgiveness of Tax To claim forgiveness of tax for an individual who was killed in military or terrorist action, or who is missing in action and presumed dead, the person filing an Iowa income tax return or an Iowa claim for refund should write at the top of the return “Forgiveness of Tax—Killed in Military Action” or “Forgiveness of Tax—Killed in Terrorist Action” depending on how the deceased was killed. A copy of the deceased’s death certificate, or other evidence that establishes that the deceased was killed in military or terrorist action or is missing in action and presumed dead, should be attached to the income tax return or to the claim for refund. Claims for refund will only be honored if the claim for refund is made within the statute of limitations for claims for refund provided in Iowa Code section 422.73. Return Due Date and Extensions (Iowa Administrative Code rules 701—301.12 and 701—301.14) The usual filing deadline for Iowa income tax returns is April 30. If 90% of the tax due is paid by that time, the deadline is extended to October 31. No extension form is available or required. Qualifying individuals may be granted extensions under certain circumstances for filing returns and for other acts related to the Department. These are listed below. Who qualifies for an extension? ● Active duty military servicemembers in the armed forces, armed forces military reserve, or National Guard who are deployed outside the United States ● A person serving in support of those forces ● A spouse of a person listed above if they file jointly or if they are a party with the eligible taxpayer to any other act related to the Department ● An eligible individual who was continuously hospitalized because of illness or injury in the combat zone “Other acts related to the Department” includes: ● Filing claims for refund for any tax administered by the Department ● Making tax payments other than withholding payments ● Filing appeals on the tax matters ● Filing other tax returns ● Performing other acts described in the Department’s rules Applying for the Extension To claim the extension, eligible taxpayers, and, if applicable, their spouses, should notify the Department of their eligibility by sending the information described below to the Department: ● Taxpayer’s name and spouse’s name ● Taxpayer’s date of birth and spouse’s date of birth ● Taxpayer’s U.S. address and spouse’s address ● Date of taxpayer’s deployment overseas ● For military personnel, an official document that indicates taxpayer’s deployment ● For qualifying civilians, a letter of authorization, a similar letter from the taxpayer’s employer, or a letter from the military stating that the taxpayer served in a “tax-free zone” or “Combat Zone Tax Exclusion Area (CZTE)” The taxpayer, the taxpayer’s spouse, or an authorized agent or representative of the taxpayer may submit the notification of eligibility to the Department. 92

Extension Periods In general, the additional time period for filing state returns and performing other acts related to the Department is 180 days. IRS Military Web Page For further information about federal tax provisions governing military personnel, go to the IRS website at: www.irs.gov/individuals/military. Nonresident Servicemembers The Servicemembers Civil Relief Act (SCRA) is a federal law that, among other things, protects servicemembers from losing their home state residency simply by being absent from their home state in compliance with military orders. The SCRA also protects servicemembers from establishing residency simply by being in another state where they are located pursuant to military orders. Residency (Iowa Administrative Code rule 701—300.17) Each person has one and only one state of residence. A person may be a resident of a state even though they do not actually live in the state. When is a servicemember an Iowa resident? A servicemember is an Iowa resident if: ● the servicemember was a resident of Iowa at the time of enlistment or ● the servicemember has declared Iowa to be his or her “military home of record” or ● the servicemember has taken positive action to establish residency in Iowa A person remains an Iowa resident until positive action is taken to establish residency in another state. See Are You a Resident of Iowa for Tax Purposes. Establishing residency in another state To establish residency in another state, a servicemember should first complete form DD2058, State of Legal Residence Certificate, which is available from the payroll officer of the Military Office of Personnel. However, completion of this form, alone, does not establish residency. A combination of the actions listed below is required to establish legal residence in another state. ● physical presence in the other state ● registering to vote in the other state ● changing driver’s license ● registering vehicles in the other state ● applying for other privileges offered by the other state ● payment of real estate tax or income tax in the new state If steps are not taken to change residency, a servicemember remains a resident of Iowa and is subject to Iowa income tax laws. The Director of the Iowa Department of Revenue may require an individual to provide proof that residency has been established in another state. Nonresident Military Income Beginning with tax year 2003, the following apply for Iowa as a result of the Servicemembers Civil Relief Act: Compensation for military service is not considered to be Iowa-source income for nonresident servicemembers. However, nonresident servicemembers who have Iowa income from sources other than compensation for military service may be subject to Iowa income tax. 93

In general, the Servicemembers Civil Relief Act applies only to active duty members of the Army, Navy, Air Force, Marine Corps, or Coast Guard and to commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration who are in active service. Generally, this does not include the National Guard or reserve personnel. Exceptions exist for nonresident members of the National Guard who are under active duty orders under Section 502(f) of Title 32 of the United States Code and for servicemembers who are absent from duty under specific circumstances. Servicemembers who are not residents of Iowa are required to file Iowa income tax returns if their all-source income meets the above requirements and their Iowa-source income is $1,000 or more. The nonresident servicemember includes all income as instructed on IA 1040, lines 1 and 2, and reports any compensation for military service as a modification to federal total income on the IA 1040 Schedule 1, line 6. The net result is a reduction of the tax rate on any other Iowa-source income. Once this is done, the nonresident turns to another Iowa form, the IA 126 Nonresident and Part-Year Resident Schedule. Only Iowa-source income is included on this form and will not include military pay when calculating the credit. That credit is entered on the IA 1040, line 13, and is designed to minimize the taxation of income by Iowa and the other state. Nonresidents and part-year residents must file both the IA 1040 and the IA 126 with a complete copy of the federal return. IRS Military Web Page For further information about federal provisions that may impact military personnel, go to the IRS website at www.irs.gov/individuals/military Spouses of Servicemembers Under the Military Spouses Residency Relief Act of 2009 (MSRRA), the Veterans Benefits and Transitions Act of 2018 (VBTA), and the Veterans Auto and Education Improvement Act of 2022, the spouses of servicemembers may be exempt from Iowa income tax on income from services performed in Iowa if they are not residents of Iowa. Servicemembers’ spouses are protected, by federal law, from losing their home state residency simply by being absent from their home state in order to be with the servicemember spouse who is elsewhere in compliance with military orders. Federal law also protects servicemembers’ spouses from establishing residency simply by being in another state where they are located to be with the servicemember spouse pursuant to military orders. Spouses covered by the MSRRA can establish new residency when they take positive action to do so. Under the MSRRA and Iowa law, a servicemember’s spouse’s income from wages, salaries, tips, etc., may be excluded from Iowa income tax if: ● the servicemember spouse is a member of the uniformed services present in Iowa in compliance with his or her orders ● the non-servicemember spouse is present in Iowa solely to be with the servicemember spouse, and ● the non-servicemember spouse is a resident of another state. Under the VBTA, a servicemember’s spouse’s income from wages, salaries, tips, etc., may be excluded from Iowa income tax if: ● the non-servicemember spouse elects to use the same residence as the servicemember spouse for tax purposes. 94

Under the Veterans Auto and Education Improvement Act of 2022, a spouse of a service member may retain their personal residence or domicile for purposes of taxation. Under the act, a servicemember and the spouse of the member are authorized to elect to use the following locations for purposes of taxation: ● the residence or domicile of the member, ● the residence or domicile of the spouse, or ● the permanent duty station of the member. Other income, like interest income or rental income, is included in a nonresident spouse’s Iowa income and may be taxed in Iowa. Iowa W-4 The IA W-4 includes information related to this federal law. If you claim this exclusion, check the appropriate box on the IA W-4 and enter the state other than Iowa you are claiming as your state of domicile or residence for tax purposes. Attach a copy of your spousal military identification card to the IA W-4 form provided by your employer. Filing Iowa Income Tax Returns Spouses who are eligible for the spouses of servicemembers exemption should report all-source income on the IA 1040, but should show no Iowa wages, salaries, tips, or Schedule C income on the IA 126. Enter the amount from IA 126, line 34 on IA 1040, line 13. Iowa income tax withheld should be entered on IA 1040, line 28. Then complete the remainder of the IA 1040 to determine the amount of any refund that may be due. IRS Military Web Page For further information about federal tax treatment military personnel and their spouses, go to the IRS website at www.irs.gov/individuals/military. Iowans Paid in Foreign Currency Taxpayers who are paid in foreign currency must convert the currency to U.S. dollars as required for federal tax purposes. Mailing Address for Returns and Payments Mail to: Iowa Income Tax - Document Processing, P.O. Box 9187, Des Moines IA 50306-9187 Make checks payable to: Iowa Department of Revenue ● Include IA 1040V payment voucher with payment. Electronic options are available for paying additional tax: Make a Payment on govconnect.iowa.gov ● Using the Make a Payment option and selecting Make a Return Payment without setting up a GovConnectIowa logon will not provide an option to view history of payments made. ● Create a logon to take full advantage of GovConnectIowa including viewing up-to-date balance, return status, and payment history. NOTE: If paying by credit/debit card, a service fee will be charged by the credit card processing vendor. This service fee is retained by the vendor and is not revenue to the Iowa Department of Revenue. Direct Debit payment with the income tax return ● You may be able to make a direct debit payment through your software when you file electronically. ● You may be able to schedule the payment for a future date through your tax software. 95

● Your tax payment is made from your savings or checking account without having to write a check. ● See other payment options using EasyPay Net Operating Losses For tax years beginning on or after January 1, 2023, Iowa will incorporate the federal net operating loss (NOL) and will no longer allow an Iowa-specific NOL. Taxpayers should use the IA 124 form to calculate the amount of any pre-2023 federal NOL carryforward that must be added back or any pre-2023 Iowa NOL that may be deducted. Follow the IA 124 form instructions for reporting the pre-2023 NOL adjustment amounts. Carryover net operation losses should not be used in the calculation of the current year Iowa nonresident and part-year resident tax credit (IA 126). Nonresidents and Part-Year Residents A nonresident or part-year resident of Iowa must complete the IA 1040 reporting the individual’s total income, including income earned outside Iowa. The taxpayer is allowed adjustments to income on the same basis as if the taxpayer were a resident of Iowa. The nonresident or part-year resident may then complete a Schedule IA 126. On the IA 126, only Iowa income is reported and a percentage of Iowa income to total income is determined. The taxpayer receives a credit against the initial tax liability based on the percentage of income from outside Iowa. Therefore, the result of this credit is that only Iowa-source income is taxed. Although non-Iowa income is used to calculate the initial tax liability at the appropriate tax rate, the non-Iowa income itself is not subject to tax. By using this method, Iowa taxes the Iowa-source income of nonresidents and part-year residents at the same rate it taxes Iowa residents. A nonresident of Iowa with all-source income of $250,000 and $10,000 of Iowa income, will, after completing the IA 126 form, be taxed at the same 3.8% tax rate as an Iowa resident on the $10,000 of Iowa income. For more information, see IA 126. A part-year resident may also complete the IA 130 if they have income earned while an Iowa resident, which is taxed by another state, local jurisdiction, or foreign country. For more information, see IA 130. Income which is not taxable for Iowa purposes should not be reported on the IA 126 or IA 130. Examples of types of income which are taxable for federal purposes but are excluded for Iowa purposes on Schedule 1 include: ● Social Security Benefits ● Active Duty Military Pay and Military Retirement ● IRA/Pension/Railroad Retirement Income ● Railroad Unemployment Income Nonresidents with Gambling Winnings Iowa gambling winnings are taxable in Iowa even if the winner is not an Iowa resident. Nonresidents should complete the IA 1040, showing income from all sources, including Iowa gambling winnings, lines 1 through 12. Then use the IA 126 to determine your credit based upon the percentage of Iowa income to total income. Do not include any losses from gambling on IA 126. This credit should be entered on IA 1040, line 13, then complete the remainder of the return. Include a copy of your federal return. 96

Record Keeping Iowa individual income tax returns and all supporting documentation, including federal returns and all relevant schedules, should be kept for at least 10 years after filing the return. If you have unreported income or fraudulent filings, the statute of limitations for examination by the Department is unlimited. Refunds May Be Used to Pay Debt The state setoff program is a method State of Iowa public agencies may use to collect past-due (delinquent) debts (for example, child support payments) that are owed. The state setoff program matches people and businesses who owe delinquent debts with money that is owed to those people and businesses (for example, an income tax refund). Sources of funds available for setoff include, but are not limited to, tax refunds, casino and sports wagering winnings, State-issued vendor payments, and Iowa Lottery winnings. To the extent allowed by law, when a match occurs, the Iowa Department of Revenue withholds or sets off money to apply toward the delinquent debt. State of Iowa Setoff Program requirements are outlined in Iowa Code section 421.65 and Iowa Administrative Code 701—Chapter 26. To learn more, visit revenue.iowa.gov/setoffs. Submitting Your Return Supporting Documentation Include all necessary supporting documentation and a copy of your federal return. Place documents in the following order: 1. Check or Money Order 2. Payment Voucher 3. W-2s and 1099s 4. IA 1040 5. Iowa schedules, forms, and supporting documentation 6. Copy of complete federal return 7. Copy of any other applicable state tax returns Do not staple the IA 1040 or any supporting documentation. Include all required schedules, even if the schedule results in zero dollars. Use Tax Information for Businesses and Individuals Do you purchase items from out of state or through the internet, catalogs, magazines, or vendors who advertise on television or radio? Will those items be used in Iowa? Would they be subject to Iowa sales tax if purchased in Iowa? Are you paying tax on those purchases? If not, you owe Iowa use tax on the purchase price. If you purchase tangible personal property, specified digital products, or taxable services for use in Iowa and the seller does not charge you Iowa tax on the purchase, you owe a 6% tax known as the use tax on the price of the purchase. 97

Anyone – individuals and businesses – who makes these types of purchases is required to pay use tax. Persons owing $1,200 or more in use tax per year on taxable goods or services must register with the Iowa Department of Revenue for a sales and use tax permit and report the tax as “taxable purchases” in the use tax section of the sales and use tax return. Persons who do not have a sales and use tax permit and who do not regularly make purchases subject to use tax or who owe less than $1,200 in use tax per year may report their tax on the Iowa Non-Permit Use Tax Return (32-007). Businesses should review all purchases to determine if the vendor collected the proper tax. Businesses that fail to do so may find themselves with a use tax liability, plus penalty and interest, for not reporting the use tax in a timely manner. For more information, see our Sales and Use Tax Guide. What to Do If You Do Not Receive Your W-2 Each year many Iowans do not get W-2s from their employers by the January 31 date required by the IRS. If you have moved: Contact your employer with your new address. If you simply have not received it: Contact your employer and try to find out why you have not received the W-2. If you still do not receive it: You may also call the IRS at 800-829-1040. They will work with you and explain the steps needed to receive a substitute W-2. Iowa will accept a copy of the substitute W-2 filed with the IRS. However, the substitute W-2 may not show Iowa withholding. No credit for Iowa withholding can be given in this case unless you have pay stubs that show Iowa withholding. If you need a W-2 from a previous year, here are some other possible options: ● Social Security Administration (SSA) - may provide copies of Forms W-2 for retirement purposes at no charge and for other than retirement purposes for a fee. Call 1-800-772-1213, or visit the SSA website at www.ssa.gov for instructions on how to obtain wage information from the SSA. ● Internal Revenue Service (IRS) - may provide an exact copy of a previously filed and processed tax return with attachments (including the form W-2). You should complete federal Form 4506, Request for Copy of Tax Return, and mail it to the address listed in the instructions. A fee will be charged for each tax year requested. NOTE: The Iowa Department of Revenue is not able to provide you with a copy of your W-2 information. 98

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