State of Iowa tax program released 3/26/2021 for TurboTax Premier download version includes changes for the American Rescue Plan making unemployment received in 2020 not taxable for the first $10,200. The TT faq document on this subject indicates Iowa is finalized/up to date and OK to file. Everything I read says Iowa has legislation pending for this but not finalized yet?
This is the information from the expanded Iowa instructions for 2020 tax year for line 12:
Enter the amount of unemployment compensation benefits that was taxable on your federal return with the following modification:
This information would seem to indicate Iowa is following the Federal taxability guidelines for unemployment benefits. Click here for a link to the expanded instructions.
Additionally, the pending legislation for Iowa appears to only apply to the federal jobless benefits, not any state unemployment benefits received. The program changes for Iowa with the 3/26/2021 release do not appear to address that.
This is the information from the expanded Iowa instructions for 2020 tax year for line 12:
Enter the amount of unemployment compensation benefits that was taxable on your federal return with the following modification:
This information would seem to indicate Iowa is following the Federal taxability guidelines for unemployment benefits. Click here for a link to the expanded instructions.
Thank you - I did see in the news 3/29/2021 that Iowa had clarified their position on the unemployment benefits, stating that in keeping with a policy of "rolling conformity" that requires the state to automatically adjust its income tax rules to any change in the Internal Revenue Code, Iowa will follow the federal income tax rules that Congress passed in the COVID-19 relief bill. It does appear that TurboTax Premier download version has updated to handle those changes for Iowa.