No you will not have a penalty or interest due. On the IA 1040X, it will ask for the amount paid with the original return and enter 0.00. For an explanation, indicate you did not include your Iowa withholding on original return. Mail it as soon as possible. Depending on when your IA 1040x is processed, you may get a notice from the Iowa Dept of Revenue. If you do and just respond with a copy of the IA 1040X with a quick note that you amended the original return and now have a refund.
