Hi, I had reached out to the Iowa Department of Revenue, just before I asked my question here.
I finally received their response today. It reads as follows:
"Hello Michael, your stimulus would not be reportable to Iowa.
However, from the instructions - If you received a refund of federal income tax during 2021:
You must report the amount on this line 27. It must be reported even if you used the standard deduction on the prior year's Iowa return. The federal refund must be included on this line because you benefited from being able to deduct federal taxes on the prior year's Iowa return, which reduced your Iowa taxable income for that year. The amount reported on this line should not exceed the total amount of any federal tax deduction taken on the prior year(s) Iowa return.
Have a great day.
Sincerely,
Russ S.
Taxpayer Services | Tax Management Division | Iowa Department of Revenue
This seems to contradict you saying "TurboTax does not include the Federal Refund because it was the Recovery Rebate Credit (stimulus) so it is not included on Line 27 as a Federal Tax Addition and Deduction on the Iowa state tax."
This leads me to believe this is a Turbotax software mistake that needs to be corrected/updated.
I ran my taxes through 2 other software programs (OLT.com and Fileyourtaxes.com), and both of those counted my Federal Refund as taxable, while Turbotax did not.
Can you please look into this again, and have the software updated if necessary.
Thank you for all your assistance
