It depends. Be sure you have answered the questions in the 1099-R federal interview to defer the tax on the income. There is nothing in the expanded instructions allowing for the income received to be deferred for an early distribution of retirement accounts.
TurboTax will automatically calculate certain aspects of the return and otherwise, ask more questions in the state interview. There are aspects that Iowa does not conform to federal law.
The 2020 Iowa Form IA 1040 Expanded Instructions page 3 only state: For tax years beginning on or after January 1, 2020, Iowa has adopted rolling conformity, meaning the state will automatically conform to any changes made to the Internal Revenue Code (IRC), except as specified by Iowa law.
See: Iowa Nonconformity: Coronavirus Aid, Relief, and Economic Security Act of 2020 which states:
Iowa generally conforms with tax provisions of the CARES Act to the extent they affect Iowa income taxes for tax years beginning on or after January 1, 2020.
For more information, see: CARES Act Retirement Provisions FAQ
