Iowa will now incorporate the federal standard or itemized deduction and will no longer allow an Iowa-specific standard or itemized deduction.
For tax years beginning on or after January 1, 2023, the starting point for taxation is federal taxable income. Iowa has also adopted rolling conformity, meaning the state will automatically conform with any changes made to the Internal Revenue Code, except as specified by Iowa law. The calculation of Iowa taxable income is the same as the calculation for federal taxable income, with certain exceptions which are described in the income tax instructions. Examples of the differences between federal and Iowa taxable income include but are not limited to: depreciation for certain assets placed in service before tax year 2021, section 179 special election deductions, and the business interest expense limitation.
Disclaimer: Always verify details with the most current Federal and State Department of Revenue Forms and Instructions. Tax laws and regulations are subject to change. For complex situations, consult a CPA or tax attorney.