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13. TAXABLE SOCIAL SECURITY BENEFITS.

Iowa does not tax Social Security benefits in the same manner as the Internal Revenue Service. To compute the amount of Social Security benefits that are taxable to Iowa, complete the worksheet below.

The worksheet below calculates the 2011 67% phase-out on Social Security benefits established by the Iowa Legislature. For more information, see the 2006 Legislative Summary for SF 2408-C.

SOCIAL SECURITY WORKSHEET

This worksheet is available in fillable pdf format (coming soon).

1. Enter the amount from Box 5 of form(s) SSA-1099. If you filed a joint federal return, enter the totals for both spouses. Do not include Railroad Retirement benefits from form RRB-1099 here. 1.
2. Enter one-half of line 1 amount. 2.
3. Add amounts from the federal 1040 on lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21, plus one-half of any Railroad Retirement Social Security benefits from RRB-1099.* If filing federal 1040A, use lines 7, 8a, 9a, 10, 11b, 12b, and 13, plus one-half of any Railroad Retirement Social Security benefits from RRB-1099. Include any bonus depreciation / section 179 adjustment from line 14 of the Iowa 1040 to compute correct amount. 3.
4. Enter the amount from line 8b of your federal 1040 or 1040A. 4.
5. Add lines 2, 3, and 4. 5.
6. Enter total adjustments from federal 1040, lines 23 through 32, plus any write-in adjustments you entered on the dotted line next to line 36. If filing federal 1040A, use the total of lines 16 and 17. 6.
7. Subtract line 6 from line 5. 7.
8. Enter one of the following amounts based on the federal filing status used on form 1040 or 1040A.
  • Single, head of household, qualifying widow(er): enter $25,000.
  • Married filing joint: enter $32,000.
  • Married filing separate: enter -0- if you lived with your spouse at anytime in 2011 or $25,000 if you did not live with your spouse at any time in 2011.
8.
9. Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, none of the Social Security benefits are taxable. 9.
10. Enter one-half of line 9. 10.
11. Iowa Taxable Social Security benefits before phase-out: Enter the smaller of line 2 or line 10. 11.
12. Iowa Taxable Social Security Phase-out: Multiply line 11 by 67% (.67). 12.
13. Iowa Taxable Social Security after Phase-out (Reduced Iowa Taxable Social Security): Subtract line 12 from line 11 and enter here and on line 13 of form IA 1040. 13.

* Line 3 Notes

Bonus Depreciation / Section 179

Iowa taxpayers who received Social Security benefits in 2011 and claimed bonus depreciation / section 179 on their federal returns may have to recompute their taxable benefits on the worksheet.

Those who need to recompute the taxable Social Security benefits should add the adjustment from line 5 of Schedule IA 4562A to the other amounts shown on line 3 of the Social Security Worksheet from the federal return and the RRB 1099. The rest of the form is then completed with the amounts normally used to complete the worksheet from the federal 1040 or 1040A.

Include the following incomes or adjustments to income on line 3 if applicable.
(These were excluded from federal AGI.):

  • foreign-earned income
  • income excluded by residents of Puerto Rico or American Samoa
  • proceeds from Savings Bonds used for higher education and
  • employer-provided adoption benefits.

Railroad Retirement Benefits

Although Railroad Retirement benefits are not taxable, one-half of the benefits received must be used to determine the amount of Social Security benefits that are taxable to Iowa.

Interest from Federal Securities

For purposes of determining taxable Social Security benefits, you must also include interest from federal securities.

Married Separate Filers:

  1. If both spouses received Social Security benefits, the taxable amount is allocated between the spouses in the ratio of the benefits received by one spouse to the total benefits received. (Examples of how to prorate)
  2. If only one spouse received benefits, that spouse will report the portion of the benefits that is taxable.


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