Iowa Expanded 1040 Instructions

33. ADDITIONAL FEDERAL TAX PAID IN 2012.

A. Additional Tax to Enter

Enter the amount of additional federal income tax paid during 2012 for tax year 2011 and any other years before 2011. The amount of additional federal income tax paid is deductible only if Iowa income tax returns were required to be filed for the year for which the additional federal income tax was paid.

Include only the actual federal tax payments made in 2012, but DO NOT include the following:

penalties

interest

excise tax on early withdrawal of qualified plans

federal First-time Homebuyer Credit repayment

Refundable Credits

Refundable credits on the federal 1040 may be included on IA 1040, line 33, to the extent federal income tax was paid by applying the federal refundable credits, such as:

Earned Income Tax Credit
Additional Child Tax Credit
Others

Any refundable federal credits that reduce federal income tax liability are allowed as a federal tax deduction — up to the amount of the federal tax paid by the refundable credits — on the Iowa return.

In determining the order of applying the refundable federal tax credits, the federal Earned Income Tax Credit (EITC) should be applied first, followed by the Additional Child Tax Credit, and then any other refundable federal credits.

Example:

The following example illustrates how a refundable federal Earned Income Tax Credit (EITC) on a timely-filed 2011 federal 1040 may affect line 33 of the 2012 Iowa return.

FIRST: Federal Tax Liability For Tax Year 2011

Taxpayer's Federal Tax Liability for Tax Year 2011: $2,000

Subtract Taxpayer's Federal Withholding: — 500

Taxpayer's Unpaid Federal Tax Liability for Tax Year 2011: 1,500

SECOND: Apply EITC To Unpaid Federal Income Tax Balance

Federal EITC Calculated by Taxpayer for Tax Year 2011: $ 2,500

Subtract the $1,500 Federal in Federal Income Tax the Taxpayer Still Owes for Tax Year 2011: — 1,500

Taxpayer Will Receive a Federal Refund of EITC: $ 1,000

THIRD: Line 33 On Iowa Return For 2012

33. Additional federal tax paid in 2012 for Tax Year 2011 $ 1,500

The $1,500 federal tax liability paid by EITC for Tax Year 2011
is deductible on the 2012 Iowa return.

Married Separate Filers:

The additional federal tax paid must be divided between spouses in the ratio of the spouses' Iowa net incomes for the prior years for which they paid additional federal income tax.

(Examples of how to prorate)

B. FICA Payments

FICA payments in excess of $4,624.20 for Social Security tax for each person and the Motor Fuel Tax Credit from the 2012 federal return can be deducted as a federal tax payment on line 33. Any excess FICA tax and federal fuel tax refunded to you must be added back as a federal tax refund in the year received.

If you are self-employed, any self-employment tax you pay cannot cause an excess FICA payment.