Federal income tax refund worksheet - Iowa 1040

[mhamm30]

In the Iowa return, Federal Income Tax Refund worksheet, Line A asks for amount of fed refund received previous year. This amount does not carry to line 27 IA 1040. Does anyone know the purpose of this worksheet? Or do we simply enter this refund directly on the t wants to net out the fed stimulus received if refund exceeds that amount.

[IRonMaN]

The purpose is, you get a deduction for federal taxes paid.  So when you get a federal refund, you need to reflect that fact the following year.

[mhamm30]

Thanks IronMan. I understand that, and we can enter that fed refund directly on the IA 1040. My question is the purpose of the worksheet, if this amount entered on the worksheet does not carry to line 27 on the IA return. The worksheet includes not only the fed refund but EIC and fed stimulus. There has to be a reason they created the worksheet....

[IRonMaN]

Sorry, it's been awhile since I prepared an Iowa return.  Somebody from that side of the tracks is going to have to help you with that one.

[garman22]

@taxiowa front and center. 😁

[tihle · Accepted solution]

It seems as though the Iowa worksheet is automatically subtracting $1400 from the Federal Tax refund for the stimulus. I would think you would only do this is the taxpayer received stimulus included in their refund for last year. Anyone else seeing this?

[mhamm30]

That is what the worksheet is doing! You are correct. I could not get my arms around that. We will need to make that adjustment on that worksheet for every taxpayer, as it is defaulting to the full stimulus amount allowed - based on 2021 numbers. And for those taxpayers that we claimed additional stimulus on the filed return, and then that later was altered by the IRS - we will need to use the adjusted amount, not the filed amount on the original return. And of course, in most cases we do not have that adjusted amount. My head already hurts!

[taxiowa]

This problem has been pointed out to administrator last week.  Maybe the fix will be in soon.  For now just enter 0 on Line G of smart worksheet.  Or enter amount from 2020 Line 30 on Line G if that was populated.  Maybe Gabi will let us know when programers make the update.  You can't rely on me to update you cuz I like wine too much.

[Shirley79]

YES!!!!!  

The 2020 refunds are being completely removed in some cases.  Iowa instructions say to not include stimulus but it doesn't say to subtract stimulus.

HELP

[mhamm30]

It appears we need to net out the portion of the refund attributed to stimulus, and report the net refund of this worksheet.

[taxiowa]

As I mentioned above, I have already alerted someone at Intuit over a week ago.  Until it is fixed you need to enter 0 on Line G on not so smart worksheet for Line 27.  I guess you could call support to see if you can get it expediated.  It does need corrected though or Iowa Dept of Rev is going to be pissed.  Average taxpayer saves about $120 until till you correct it.

[lschmitt]

In a land far, far away in the not too distant future, we will receive an Iowa program that is perfect in every way the first shot through........my not too distant future and your not too distant future might not be the same thing 😉

[taxiowa]

The other ordeal I forgot to mention is that if you did not open and save all clients with unemployment exemption in 2020, the program only carries forward the pre-exemption federal refund.  Which of course also understates Iowa tax owed.

[Shirley79]

Exactly.  I just filed a tax that had that situation.