2021 ProSeries/Iowa Readme
Release 2021.045
Contents
Items addressed in this release
Items addressed in previous releases
What's new for ProSeries/Iowa
Forms
Electronic filing
Additional Information
Items addressed in this release
- General updates - This release contains minor updates and enhancements to the program.
Items addressed in previous releases
The following forms and worksheets have been addressed in previous releases:
- Activity Worksheet - The Activity Worksheets were updated in a prior release. You may now file returns that report federal/state adjustments.
- General product improvements - State calculations were updated for Federal 2441 changes.
- Federal Income Tax Refund Received Worksheet - Was offsetting the 2020 refund received in 2021 with 2021 federal Economic Impact Payments. The line containing the Economic Impact Payments was removed from the worksheet.
- Miscellaneous Itemized Deduction Worksheet - Now supports Qualified Disaster Losses. This amount transfers from the Federal Schedule A, Miscellaneous Itemized Deduction Worksheet.
- IA 2210F - Form 2210F can be filed now.
- Passive Activity Form - Is not available in this release. This is due to a change made by the IRS to Form 8582.
What's new for ProSeries/Iowa
The following items are new for tax year 2021
- Rolling Conformity - For tax years beginning on or after January 1, 2020, Iowa has adopted rolling conformity, meaning the state will automatically conform to any changes made to the Internal Revenue Code (IRC), except as specified by Iowa law.
- Economic Impact Payment (EIP) - Whether in the form of a rebate or refundable tax credit will not be included in Iowa taxable income, or added back as part of your reportable federal income tax refund.
- Paycheck Protection Program - (PPP) loans that are forgiven and properly excluded from gross income for federal purposes will also qualify for exclusion from income for Iowa tax purposes.
- Bonus Depreciation - Iowa has conformed with federal bonus depreciation provisions for assets placed in service in tax year 2021. The IRC section 179 limit applicable to individuals for Iowa for tax year 2021 is the same as the federal limit. See the IA 4562A/B for more information.
- Like-Kind Exchange - Iowa has conformed with the federal repeal of like-kind exchanges of personal property for tax years 2019 and later.
- COVID-19 Grants - Report the amount of qualifying COVID-19 grant excluded from income under Iowa admin. rule 701-40.86 to the extent the grant was included as income on the Iowa return.
- Educators - For 2021 and later, eligible educators are entitled to deduct certain out of pocket teacher expenses in excess of the federal deduction limitation, but not to exceed $500 per eligible educator.
- Charitable Contribution for nonitemizers - The charitable contributions deduction for nonitemizers is no longer allowed for Iowa income tax purposes.
- Qualified Business Income Deduction - The qualified business income deduction has increased from 25% to 50% of the federal deduction.
- DPAD 199A(g) - The DPAD 199A(g) deduction has increased from 25% to 50% of the federal deduction.
- Tuition and Textbook Tax Credit - For tax year 2021 and later, the tuition and textbook tax credit has increased to 25% of the first $2,000 paid for tuition and textbooks for each qualifying dependent. Qualifying payments for tuition and textbook include certain expenses incurred for dependents who are receiving private instruction.
- Volunteer Firefighter Increase - The maximum Volunteer firefighter/EMS/reserve peace officer tax credit has increased from $100 to $250 for tax year 2021 and later.
- Child and Dependent Care Credit - For tax year 2021 and later, the eligibility threshold for claiming the child and dependent care credit or early childhood development credit is increased from $45,000 to $90,000.
- Iowa Form IA 1040 Standard Deduction Increased - The Iowa standard deduction has increased from $2,110 to $2,130 for filing status single, married filing separate returns, or married filing separate on combined returns. For filing status of married filing joint, head of household, or qualifying widower the standard deduction increased from $5,210 to $5,240.
Forms
The Iowa Department of Revenue has approved for filing all forms and
schedules included in ProSeries/Iowa.
The following forms have not been finalized in this version of
ProSeries/Iowa. When you open a form in the program, you might see
"DO NOT FILE" in red text in the upper-right corner of the form, and you
see the new, non-scrolling Form Status bar at the top of the form. The
phrase DO NOT FILE - search "updating forms" for Help
appears on the printed copy of the forms that are included in this
version of ProSeries/Iowa. If your client's return contains any of the
following, do not file that return until ProSeries/Iowa has been updated
with a final, approved-for-filing version of each form included in that
return:
- Form IA 126 Nonresident and Part-Year Resident Credit
- Passive Activity Form Activity Worksheet
Electronic filing
General information for electronic filing:
You can file returns electronically with this version of ProSeries/Iowa.
Additional Information
Check all returns after printing
The Iowa Department of Revenue scans computer-generated forms to
quickly process the income tax returns it receives. To meet the requirements for
producing computer-generated forms, ProSeries is required to limit the width of
the tax information printed on forms that are scanned. In certain cases, data
you entered may be truncated. After completing a tax return, review the
information that prints (for example, mailing address information), make any
necessary changes, and reprint the return before mailing it.
Bar codes on printed state returns
Iowa uses bar codes on computer-printed tax forms. This special
formatting allows the state taxing authorities to process returns more quickly
and efficiently. On-screen, you'll see only a small representation of the bar
code on the lower-left side of the form. This image is static and does not
change based on the information in the return. However, when you print the
return, the bar code appears as a large rectangular box on the first page of the
form. The width of the bar code is constant; the height varies according to the
data in the return. In general, the more complex the return, the larger the
printed bar code.
Returns that contain special formatting may be processed at a different
location than manually prepared returns. Therefore, the filing instructions that
print with the state return may contain a mailing address that's different from
the mailing address in the package that is sent to taxpayers. Be sure to have
your clients mail their returns to the address in the filing instructions that
print with the return.
Important: Because the bar code image is a function of the data in the
tax return, it's important that you reprint the page with the bar code if
changes are made to any part of the return. Also, do not print blank copies of
the main form and prepare them manually. The Iowa taxing authority may
attempt to scan the form and reject it.
End of ReadMe file for ProSeries/Iowa