"Then it asks for the amount to be excluded from Iowa. " Actually, no it doesn't.
The Iowa interview screen says, "IRA distributions NOT reportable to Iowa". The IRA distributions are to be "excluded" from Iowa income, not "not reportable". These are different terms in taxation.
To me, this phrase is alluding to the fact that IRA distributions cannot be excluded unless they were taxable on the federal return.
In the normal case, you would enter your IRA amount that is taxable on the federal return, therefore would be taxable in Iowa except for the exclusion.
However. I agree that this phrasing is not obvious. I will ask that this interview screen be reviewed.
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