Iowa Schedule A and Changes to Itemized Deductions

Recent legislative changes have altered how deductions are handled for Iowa income tax purposes. The state-specific Iowa Schedule A, a form previously used to calculate and claim itemized deductions, has been eliminated for tax years 2023 and onward. Iowa now conforms its tax code to the federal government’s definition of taxable income. This shift means that the deductions a taxpayer claims on their federal return now directly carry over to their Iowa return, simplifying the state filing process but also making federal tax decisions more impactful for Iowa residents.

A Major Shift in Iowa Deductions

Iowa’s tax system has undergone a transformation, directly impacting how residents calculate their taxable income. Beginning with the 2023 tax year, the state has adopted federal taxable income as the starting point for the Iowa individual income tax return (IA 1040). This change represents a policy shift towards tax simplification.

As a result of this alignment, Iowa no longer has its own unique standard deduction amounts or a separate form for itemized deductions. The deduction method you choose for your federal tax return—either the standard deduction or itemizing on the federal Schedule A—is the same method you must use for your Iowa return. This makes the federal filing decision the sole determinant for how deductions are applied at the state level.

Deciding to Itemize: Federal Rules Now Apply in Iowa

The choice to itemize deductions is no longer a separate state-level consideration for Iowans; it is now dictated by your federal tax filing decision. You must compare the total of your potential itemized deductions to the federal standard deduction amount for your filing status. If your itemized total is higher, you will benefit from itemizing on your federal return, and consequently, on your Iowa return.

For the 2024 tax year, the federal standard deduction amounts are $29,200 for Married Filing Jointly, $14,600 for Single and Married Filing Separately filers, and $21,900 for Head of Household. An additional standard deduction amount is available for those who are age 65 or older or blind. If the sum of your itemized deductions does not exceed your applicable federal standard deduction, then taking the standard deduction is the more advantageous path.

Federal Itemized Deductions Now Used for Iowa Returns

With Iowa’s adoption of federal tax rules, the specific deductions you can claim are determined by the regulations governing the federal Schedule A (Form 1040). The total of these deductions, as calculated on your federal return, is the amount that will be factored into your Iowa taxable income. There is no separate Iowa calculation or form to complete for these expenses.

Medical and Dental Expenses

You can deduct the amount of your medical and dental expenses that exceeds 7.5% of your federal Adjusted Gross Income (AGI). This threshold is a significant factor, as only the portion of expenses above this floor is deductible. Qualifying expenses are broad, including payments for doctors, dentists, hospital care, prescription medications, and health insurance premiums paid with after-tax dollars.

Taxes You Paid

A federal provision affecting Iowa taxpayers is the limitation on the deduction for state and local taxes, commonly known as SALT. The federal rule caps the total deduction for all state and local taxes—including property taxes and either income or sales taxes—at $10,000 per household, per year ($5,000 if married filing separately). Taxpayers are now bound by this federal cap, which may limit the tax benefit for those with high property or state income tax liabilities.

Home Mortgage Interest

The federal deduction for home mortgage interest is also applicable. Taxpayers can deduct interest paid on mortgage debt used to buy, build, or substantially improve a primary residence and a second home. The rules apply to a total mortgage debt limit, and interest on home equity loans is only deductible if the loan proceeds are used for the purposes of buying, building, or substantially improving the home that secures the loan.

Charitable Contributions

For taxpayers who itemize, contributions made to qualified charitable organizations are deductible. The federal rules establish limits on these deductions based on a percentage of your AGI, which varies depending on whether the contribution is cash or non-cash property. For cash contributions, the limit is up to 60% of your AGI. It is required to maintain records, such as bank statements or written acknowledgments from the charity, for all donations claimed.

How to Report Itemized Deductions on Your Iowa Return

Since Iowa now begins its tax calculation with federal taxable income, there is no longer a separate Iowa Schedule A form to complete. The process of reporting your itemized deductions has been integrated directly into the main IA 1040 form. Your itemized deduction total is already factored into the federal taxable income figure that you will enter near the beginning of your Iowa return.

To complete your Iowa tax return when itemizing, you must first finalize your federal Form 1040 and the accompanying federal Schedule A. The resulting federal taxable income from your federal return becomes the starting point for your IA 1040. The official IA 1040 form and its detailed instructions are available on the Iowa Department of Revenue’s website.

Filing Your Completed Return

Under the new system, you must attach a copy of your federal Schedule A to your IA 1040 if you itemize. Once your Iowa return and all necessary federal attachments are complete, you have two primary methods for submission. The most common method is electronic filing through approved tax software, which will automatically include the required federal forms with your state submission.

Alternatively, you can file a paper return. If you choose this option, you must mail your completed IA 1040, along with the full copy of your federal return and any payment voucher if tax is owed, to the Iowa Department of Revenue. The mailing address for paper returns is: Iowa Income Tax Document Processing, PO Box 9187, Des Moines, IA 50306-9187.