1, 2025, for deaths on that date or later. The law reduces the inheritance tax in five stages by reducing the tax rate by 20% per year over four years until it is eliminated completely on Jan. Iowa is one of six states still imposing a tax on certain beneficiaries of an estate. Senate File 619 phases out the state’s inheritance tax.
Corporate taxpayers will no longer separately calculate NOLs and instead calculate ‘net income’ as computed for federal income tax purposes. Under current law for corporate taxpayers, the starting point for calculating the corporate income tax and franchise tax is federal taxable income before the net operating loss (NOL) deduction because NOLs are calculated at the state level.Iowa was one of only a few states that allowed a deduction for any portion of federal income taxes paid The deductibility of federal income taxes is eliminated.The capital gains deduction is generally repealed except for the sale of real property used in a farming business under certain conditions.
The state currently requires taxpayers to use federal adjusted gross income Individual taxpayers will begin to use federal taxable income, after deductions and adjustments, to calculate their state income taxes.This includes a reduction of the top rate from 8.98% to 6.5% Individual income tax rate brackets will transition from nine to four.A highlighted summary of some of the provisions include the following: Individual
Without the revenue contingencies, the changes are automatically effective on Jan. The state was not projected to meet the percentage growth target. The previous law had provided that the changes would occur only if the state's net general fund revenue equaled $8.3146 billion for the fiscal year ending June 30, 2022, and equaled at least 104% of net general fund revenue for the fiscal year ending June 30, 2021. Senate File 619 removes certain revenue triggers that, if achieved, were to enact a number of individual and corporate income tax changes effective Jan. Individual and corporate income tax – triggers removed The governor signed the measure after it passed with broad support in both chambers of the legislature. Some of these changes are significant including reductions in the personal income tax, a phase out of the state’s inheritance tax and an exemption for cancellation of indebtedness income under the federal Paycheck Protection Program. Kim Reynolds signed into law Senate File 619, making various changes to the state’s tax code.
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