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Level 3
posted Feb 14, 2025 6:09:50 AM

My Iowa state return adds back the municipal bond interest that was deducted on my Federal return. Why does Iowa add $2 to my value?

My MN return adds back the correct amount. I even zeroed out the value in the input and the $2 shows up on Iowa return. Would someone fix this bug please?

0 5 2459
5 Replies
Expert Alumni
Feb 14, 2025 8:31:16 PM

Iowa exempts qualified bond interest. When you entered the bond interest in the federal section, you would have marked the nontaxable Iowa state amount. Return to the federal entry. Verify your entry for Iowa.

 

Level 3
Feb 14, 2025 9:20:04 PM

I understand your comment but your response would drive a smaller addition to the state return, not more.  In my case say I have $511 of muni-bond interest in a national/multi-state fund.  In practice the Iowa amount is not consequential at 0.2% but let's say for argument it is 5% like FL.  Then I would exempt 5% of the $511 or ~ $25 and 511-25 = $486 would be added back on my Iowa return (rather than the original $511). 

 

I have checked the multiple states source without any additional selections.  IN MY CASE, the Fed return is properly picking up the $511, the MN resident state return is picking up the $511 and the Iowa is for some reason adding another $2 and entering $513.  I verified this by zeroing out the interest and $2 still appears in the Iowa addition.

Expert Alumni
Feb 15, 2025 9:07:03 AM

I have recreated your municipal bond interest with an Iowa return.

  • I entered the interest of $511 with $10 to Iowa
  • The Iowa sch 1 shows the correct amount on line 1.

Perhaps you have another income from a brokerage that is being added - since it is your resident state.

 

 

Level 3
Feb 15, 2025 12:17:19 PM

Thank you Amy, I tried basically the same thing early this morning before you posted this.  In my earlier note for privacy, I had redacted the numbers ahead of the $511.13 since I didn't think they were relevant but they may be for rounding.  This morning before you posted, I put $45.12 in the Iowa box and 20,466.01 in Multiple states for total of 20511.13   The Iowa return then had $20,468 (note $2 add) on Iowa schedule 1 line 1.  If you try that and don't get same as I did, I guess could delete the brokerage section.  At this point, I ran error check clean yesterday before posting this and have e-filed so unless someone else sees the same behavior I think I'll give up.  thanks again 

Level 3
Feb 15, 2025 12:19:55 PM

Guess I should mention I am non-resident of Iowa and resident of MN.  The MN return is correct.