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On May 30, Iowa Governor Kim Reynolds signed Senate File 2417, an extensive state tax reform bill to improve the tax structure in Iowa. The Department has released additional guidance publications to explain the following tax changes:
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Section 179 Expensing – Under section 179 of the Internal Revenue Code, taxpayers can deduct from their federal income tax the cost of qualifying property used in a trade or business in the year the property was placed in service. Iowa taxpayers who elect the federal section 179 deduction must also take a section 179 deduction for the same assets for Iowa income tax purposes in that year. However, for certain years, the Iowa limitations on this deduction are different from the federal limitations for the same year. This means that for some tax years, adjustments are required to determine the correct Iowa section 179 expensing deduction. The amount of the Iowa limitation for tax year 2018 is different depending on the type of taxpayer claiming the credit. For certain taxpayers who own an interest in a passthrough entity that claims this deduction, a new special election is available beginning in 2018. This special election will be available to all taxpayers with eligible passthrough income beginning in 2019.
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Moving Expense Deductions – Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act suspended the federal moving expense deduction for tax years 2018-2025, except for moving expenses incurred by active duty military members who move pursuant to a military order and incident to a permanent change of station. Iowa did not conform to this limitation for tax year 2018, allowing taxpayers to deduct qualifying moving expenses.
The Department has created a tax reform page on its website to provide taxpayers with guidance on tax reform topics. Additional guidance will be added as it becomes available.
To receive notifications of resources and guidance issued by the Department, subscribe to updates by selecting the tax topics of interest.
The statutory mission of the Iowa Department of Revenue is to serve
Iowans and support state government by collecting all taxes required by
law, but no more.
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