add back for self employment tax

[Tolly]

Do you add back the entire federal self employment tax to the Iowa return on line 28 (2019) even if the deduction for federal tax on line 31 is less than the self employment tax?

[George4Tacks]

Is that what the IA instructions say to do on that line? You can find the instructions via a link at the top of the  form in forms view. 

[Tolly · Accepted solution]

George4Tacks,

Instructions say that "if any part of the federal tax payments on line 31 include self employment tax, federal household employment taxes, or other additional federal taxes, then those federal taxes must be added back on line 28. See detailed IA 1040 instructions online." The detailed IA instructions online state the following:

Taxpayers can deduct their entire withholding, estimated payment, and additional federal tax paid amounts on line 31. However, certain amounts must be added back on line 28, including the following:

• Excess advance premium tax credit repayment reported on the federal 1040, Schedule 2, line 24.
• Federal self-employment tax reported on the federal 1040, Schedule 2, line 4.
• Unreported Social Security and Medicare tax on the federal 1040, Schedule 2, line 5.
• Additional tax on IRAs and other qualified retirement plans reported on the federal 1040, Schedule 2, line 6.
• Federal household employment tax reported on the federal 1040, Schedule 2, line 7a.
• First-time homebuyer credit repayment reported on the federal 1040, Schedule 2, line 7b.
• Additional Medicare tax from federal form 8959 reported on the federal 1040, Schedule 2, line 8a.
• Other additional federal taxes reported on the federal 1040, Schedule 2, line 8c.

So the question is if I have $10,000 of self employment taxes but have made no federal tax payments at all in the year so nothing is on line 31, do I have to add anything back on line 28?

Lacerte only adds back self employment taxes to line 28 to the extent there have been federal taxes paid in the year.

Iowa instructions also say "It is acceptable to report on line 28 either the current year’s self-employment / household employment tax / other federal taxes or the prior year’s, as long as the reporting method is consistent from one year to the next"

So I guess if you don't add back the self employment taxes in the year incurred you have to add them back the next year. Once you decide what to do you have to be consistent.

I suppose since Lacerte doesn't know what you did in prior years you may have to adjust what is on line 28 to reflect an established account method.

[George4Tacks]

I don't do IA, so I just referred to the instructions. I would think that there may be a worksheet, like for State Tax Refund on the 1040. If not, I am sure there is an override, so you can get the correct result. To to the line on the tax form, Right click and select Jump to input [O] indicates an override input.