Below is a list of income that you can subtract from income on your Iowa return:
Payments to an IRA, KEOGH, or SEP
Taxpayers can subtract up to $6,000 per year.
Deductible Portion (One-Half) of Self-Employment Tax
Enter the amount from Schedule 1, line 15 of your federal 1040 in computing federal adjusted gross income.
Health Insurance Deduction
Taxpayers may subtract 100% of health insurance premiums paid with post tax funds.
Penalty on Early Withdrawal of Savings
Enter the amount of any penalty you were charged because you withdrew funds from your time savings deposit before its maturity.
Enter the amount of alimony payments or separate maintenance payments that were deductible on your federal tax return.
Pension and Retirement Income Exclusion
Resident taxpayers can subtract up to $6,000 of their taxable pension. ($12,000 for joint filers)
Moving Expense Deduction - Not available for Tax Year 2023.
If you are a part-year resident who you moved into Iowa, enter any unreimbursed moving expenses from the IA 1040, line 22 that relate to the move to Iowa. Part-year residents moving out of Iowa cannot take the deduction.
Iowa Capital Gain Deduction - for certain business/farm assets ONLY (Line 23)
You must complete and include the applicable IA 100 with your return to claim the Iowa Capital Gain Deduction. Gains on the sale of stocks or bonds do not generally qualify for the capital gain deduction. Capital gains from the sale of investment property do not qualify for the capital gain deduction, even if sold to lineal descendants of the owners of the property. Non-farm rental property may qualify. In addition to the instructions and guidance found in the applicable IA 100, flowcharts to assist in determining if a gain qualifies are found in the Online Expanded Instructions.
For Tax Year 2023: Most deductions have been repealed for most transactions after January 1, 2023. However, deductions for installments from sales remain valid. Taxpayers meeting specific criteria can still deduct capital gains from the sale of real property used in a farming business, and retired farmers may elect to deduct certain livestock sales. Additionally, a new deduction is available for capital gains from the sale or exchange of employee-owed capital stock in a qualified Iowa corporation. See IA100 forms and Iowa Administrative Code rules 701-302.41 and 302.87 for details.
For additional information, please see Iowa Capital Gain Deduction.