Iowa Administrative Code

January 1, 1991. See rule 701—10.7(421) for statutory exemptions to penalty for tax periods beginning on or after January 1, 1991. This rule is intended to implement Iowa Code sections 421.27 and 422.25. [Editorial change: IAC Supplement 11/2/22; Editorial change: IAC Supplement …

original due date of the return. Interest on refunds of any portion of the tax imposed by statute which has been erroneously refunded and which is recoverable by the department shall bear interest as provided by law from the date of payment of the refund, with each fraction of a …

of tax is reduced as a result of a net operating loss or net capital loss, interest shall accrue on the refund resulting from the loss carryback beginning on the date a claim for refund or amended return carrying back the net operating loss or net capital loss is filed with the d…

by the department is less than the amount paid, the excess to be refunded will accrue interest from the first day of the second calendar month following the date of payment or the date the return was due to be filed or was filed, whichever is the later. This rule is intended to i…

307.4(8) Exemption from withholding of a nonresident’s distributive share of income from a pass- through entity. For tax years beginning on or after January 1, 2022, a partnership, S corporation, estate, or trust is not required to withhold state income tax on a nonresident membe…

307.1(1) Requirement of withholding. a. General rule. Every employer maintaining an office or transacting business within this state and required under provisions of Sections 3401 to 3404 of the Internal Revenue Code to withhold and pay federal income tax on compensation paid for…

agreement with pilot project cities approved by the economic development authority and create or retain targeted jobs in a pilot project city, a credit equal to 3 percent of the gross wages paid to employees under the withholding agreement can be taken on the Iowa withholding tax…

307.2(1) Amount withheld. a. General rules. Every employer required to deduct and withhold a tax on compensation paid in Iowa to an individual shall deduct and withhold for each payroll period an amount the total of which will approximate the employee’s annual tax liability. “Pay…

307.3(1) Definitions. For the purposes of this rule, the following definitions apply: “GovConnectIowa” means the e-services portal of the department of revenue. “Income statement” means a statement that conforms to the requirements of Iowa Code section 422.16(7)“a.” An income sta…

(4) Other income statements. Any income statement not listed in this paragraph that cannot be submitted electronically must be filed with the department by mail on or before February 15 following the tax year. (5) Extension. The director or the department employee designated by t…

certificate of participation or other obligation issued to fund a job training program under Iowa Code chapter 260E, the community college which provided the training is to notify the economic development authority of the amount paid by the employer or business to the community c…

(ACE) program is a training program administered by the Iowa department of economic development to provide technical training in state community colleges for employees in highly skilled jobs in the state to the extent that the training is authorized in an agreement between an emp…

is a program administered by the economic development authority for projects established by a community college for the creation of jobs by providing education and training of workers for new jobs for new or expanding industries. For employers that have entered into an agreement …

assistance programs. 307.9(1) Supplemental new jobs credit from withholding. For eligible businesses approved by the economic development authority under Iowa Code section 15A.7, a credit equal to an additional 1.5 percent of the wages paid to employees in new jobs for these elig…

308.3(2) Estimate payments in lieu of withholding. Nonresidents who prefer to pay estimated tax in lieu of having state income tax withheld by a state withholding agent must obtain a certificate or release from withholding. The nonresident estimated tax form must be accompanied b…

308.1(1) General rule. For tax years beginning on or after January 1, 1990, estimated payments are required if the taxpayer’s income tax liability attributable to incomes not subject to withholding is expected to be $200 or more. The amount of estimated tax paid must be used as a…

308.2(1) Time for filing. a. General rule. The date for filing the first estimate tax payment is on or before the last day of the fourth month of the tax year. The estimate tax form is to be sent to: Estimate Processing, Iowa Department of Revenue, P.O. Box 10466, Des Moines, Iow…

308.3(1) General rule. Except as noted in subrule 308.3(2), payers of Iowa income to nonresidents of Iowa are required to withhold Iowa income tax and to remit the tax to the department. See rule

308.4(1) Short taxable year. A taxpayer having a taxable year of less than 12 months must make estimated tax payments if anticipating an Iowa tax liability of $50 or more for that short tax year if that tax year began prior to January 1, 1990. In the case of short tax years begin…

308.5(1) Resident forms. Blank estimate tax forms are available from the department for resident taxpayers making state estimate payments. 308.5(2) Nonresident forms. A special nonresident estimate tax form with instructions is available from the department for any nonresident wi…

Revenue Code for underpayment of federal estimated tax also applies to persons required to make payments of estimated tax under provisions of the Iowa Code. The Iowa penalty for underpayment of estimated tax is computed on Form IA 2210 for individual taxpayers other than farmers …

different circumstances. For tax years beginning on or after January 1, 1994, taxpayers that timely file their Iowa returns and have overpayments shown on their returns may elect to have the overpayments credited to their estimated tax payments for the following tax year. For pur…

administrative procedure Act and aid in the effective and efficient administration and enforcement of the tax laws of this state and other activities of the department. These rules govern declaratory orders involving all areas within the department’s jurisdiction. The rules in th…

chapter 17A apply to this chapter unless the text states otherwise: “Declaratory order” means an order issued pursuant to Iowa Code section 17A.9 and these rules. “Department” or “IDR” means the Iowa department of revenue. “Director” means the director of the department or the di…

person shall submit declaratory orders and related documents in accordance with 701—7.3(17A). This rule is intended to implement Iowa Code chapter 17A. [ARC 8944C, IAB 2/19/25, effective 3/26/25]

701—7.4(17A). This rule is intended to implement Iowa Code chapter 17A. [ARC 8944C, IAB 2/19/25, effective 3/26/25]

701—7.5(17A). This rule is intended to implement Iowa Code chapters 17A and 554D and sections 421.17 and 421.27A. [ARC 8944C, IAB 2/19/25, effective 3/26/25]

docket number that is the official identification number of the matter. The parties will be notified of the docket number. The number will be placed by the parties on all documents thereafter filed in the proceeding. This rule is intended to implement Iowa Code chapter 17A. [ARC …

rendered to members of the public by department personnel not pursuant to a petition for declaratory order is not binding upon the department. 4.7(1) Filing a petition for declaratory order. a. When a petition is considered filed. A petition is deemed filed when it is received by…

required to file a return under the provisions of Iowa Code subsection 422.15(2) shall be a partnership, limited partnership, or limited liability company required to file a partnership return for purposes of federal income tax. A partnership or limited liability company engaged …

this state or (2) from a business, trade, profession or occupation carried on within the state must make a return of income regardless of the amount of income or loss and regardless of the residence of the partners. For tax years beginning on or after January 1, 2013, every partn…

with one or more nonresident members, but whose income is derived entirely or partially from sources within this state, shall state specifically (1) the net income, and the capital gains or losses reported on the federal partnership return, (2) the names and addresses of the part…

but the members of a partnership (including limited partnerships organized under Iowa Code chapter 488) are taxable (except as otherwise provided in 701—subrule 302.16(5) respecting nonresident members) upon their distributable shares of the net income of the partnership whether …

beginning on or after January 1, 1998, resident shareholders of all S corporations which carry on business within and without Iowa may, at their election, determine the S corporation income allocable to sources within Iowa by allocation and apportionment of the S corporation inco…

Example. The following example is based on the following facts. The taxpayers are a husband and wife who have two dependent children. Their income consists of husband’s wages of $50,000; rental loss ($5,000); wife’s S corporation income of $500,000; joint interest income of $35,0…

amount of all cash distributions and the fair market value of all property distributions made during the year, except as follows: 1. Distributions from income not subject to Iowa tax due to exclusion under Iowa Code section 422.7 (i.e., interest from federal securities or certain…

section 422.35, net S corporation income is computed by adding to or subtracting from the S corporation’s ordinary income (loss) from a trade or business those items of income, losses, and expenses that flow directly to the shareholder whose separate treatment could affect the ta…

tax related to the items of income, losses, and expenses from an S corporation is to be computed by dividing the sum of the items of income, losses, and expenses by federal adjusted gross income, and the result multiplied by the sum of the federal income tax and the federal alter…

from an electing S corporation, apply the allocation and apportionment rules in 701—Chapter 503. This rule is intended to implement Iowa Code section 422.8, subsection 2, as amended by 1996 Iowa Acts, chapter 1197. [Editorial change: IAC Supplement 11/2/22; Editorial change: IAC …

apportionment provisions for a resident shareholder of an S corporation, then the taxpayer may not take a credit against Iowa income tax for income taxes or taxes measured by income paid to another state or foreign country on the S corporation income. A taxpayer may claim a credi…

beneficiaries which begin on or after January 1, 1987, a partnership, limited liability company, S corporation, or trust may be allowed or be required to file a composite return and pay the tax due on behalf of the nonresident partners, members, shareholders, or beneficiaries. Fo…

404.10(1) In general. Except as otherwise provided in subrule 404.10(2), this chapter has no application to any tax year of partners, members, shareholders, beneficiaries, or employees that begins on or after January 1, 2022. The department’s administrative rules on composite ret…

“Employee” means a nonresident member of a professional athletic team as defined in subrule 701—302.46(1). “Partner” includes a member of a limited liability company which is treated as a partnership for tax purposes. “Taxpayer” means a partnership, limited liability company, S c…

upon the following: 1. The composite return must include all nonresident partners, shareholders, employees, or beneficiaries unless the taxpayer can demonstrate which nonresident partners, shareholders, employees, or beneficiaries are filing separate income tax returns because th…

behalf of the nonresident partners, shareholders, employees, or beneficiaries, it must be based upon the tax year of the majority of its partners, shareholders, employees, or beneficiaries. The composite return must be filed on Form IA 1040C, “Composite Iowa Individual Income Tax…

404.7(1) The tax will be computed in accordance with Iowa Code section 422.5, including the alternative minimum tax as though a resident. 404.7(2) Deduct from the computed tax one personal exemption credit of $20 ($40 for tax years beginning on or after January 1, 1998) for each …