The message you received about the Iowa DMV registration was not a notice of your Iowa refund. It was a notice to tell you that $352 of your license fees were deductible against your income. Look for your vehicle registration fees on IA Schedule A, line 6.
If you are using the Iowa standard deduction, then your vehicle registration is included in the standard deduction.
If you are using Iowa Itemized deductions, then your vehicle registration will reduce your income, resulting in a lower taxable income. Lowering your taxable income results in a lower total tax bill.
