Iowa low-income exemption

[jantonelli]

Both online and desktop versions of Turbotax are taking the Iowa low-income exemption when the taxpayer is claimed as a dependent on another person's Iowa state return.  

On Iowa tax return Turbotax checks the "Check if using alternate tax (line 5), tax reduction calculation (line 12),
or low-income exemption. See instructions." in step 5, even though Step 2 line 1 "Single: Were you claimed on another person’s Iowa return" is checked as YES.

Iowans cannot claim the low-income exemption if they are claimed as a dependent on another person's return.

[jantonelli]

The Iowa low-income exemption is allowed if taxable income is less than $5000 even if you CAN be claimed as a dependent on another person's return.  

Per revenue.iowa,gov website condition 2:

Filing status 1, Single: If you are using filing status 1 (single), you are exempt from Iowa tax if you meet either of the following conditions:

1. Your Iowa taxable income from all sources, IA 1040, line 4, is $9,000 or less and you are not claimed as a dependent on another person’s Iowa tax return. ($24,000 if you are 65 or older on 12/31/25)
2. Your Iowa taxable income from all sources, IA 1040, line 4, is less than $5,000 and you are claimed as a dependent on another person’s Iowa return. For purposes of this condition, none of the income listed above is required to be added back to the Iowa taxable income.