April 27, 2009
Coupling with Federal Extenders
The Iowa Department of Revenue continues to receive inquiries about whether Iowa will adopt the federal provisions for what are commonly referred to as the federal "extenders." The Iowa Legislature has adjourned its 2009 session. Iowa will not be coupling with the 2008 federal law provisions related to extenders.
The federal extender provisions include:
- Educator Expenses (Line 24; IA 1040)
- Tuition and Fees (Line 24; IA 1040)
- Itemized Deduction for State Sales / Use Tax Paid (Line 4; IA Schedule A)
Iowa income tax returns must be filed based upon current Iowa law. Therefore, the extenders should not be included on Iowa returns. Taxpayers who have already filed Iowa returns and claimed one or more of the extenders should file an Iowa amended return to exclude any items originally claimed that would not qualify under current Iowa law. The Department made an assumption when printing the 2008 income tax booklet that Iowa would follow the federal treatment; therefore, the information in that booklet is contrary to this updated position.
Other Federal Changes
As a reminder, Iowa did couple with two federal income tax changes that became effective after January 1, 2008:
- The 2008 Legislature coupled with the increased Section 179 expensing to $250,000 for the 2008 tax year only; and
- Iowa coupled with federal changes to the 2008 research activities credit as it relates to calculation of the Iowa research activities credit.