Legislative Update
This week marked the second funnel here in the Iowa legislature. This means that any bill that has not already passed out of the House or Senate, and passed out of a committee in the opposite chamber is considered to be done for the session. Unless they are assigned to the Ways and Means or Appropriations committee. This helps to narrow our focus to the budget and bills with the best chance of becoming law.
Iowa Tax Due Date Extended-Automatic Unemployment Fix
This week the Iowa Department of Revenue officially extended the filing and payment deadline to June 1, 2021 for 2020 individual income tax returns and first quarter estimated income tax payments for individuals. The extension does not include business filers and other tax types for individuals.
No late-filing or underpayment penalties shall be due for qualifying taxpayers who comply with the extended filing and payment deadline. Interest on unpaid taxes shall be due beginning on June 2, 2021.
Additionally, because Iowa is a state that automatically conforms with the Internal Revenue Code, certain unemployment compensation will not be included in Iowa income. Based on the federal legislation, the first $10,200 of unemployment compensation income is excluded from taxation for qualifying taxpayers.
Because the federal legislation was enacted after many taxpayers filed their returns, taxpayers were unable to take advantage of this change. To assist these taxpayers, the Department will begin making unemployment compensation related automatic adjustments. The adjustment process may take up to 90 days due to cross-checking these amounts against 1099s and validating eligibility to ensure accuracy and eliminate fraud.
Taxpayers will not need to file an amended Iowa tax return if their only adjustment pertains to unemployment compensation. The Department currently is processing state income tax refunds in 28 days, slightly under the Department’s goal of 30 days. Taxpayers can check the status of their refunds online at the Department’s website Where’s My Refund
Lee Hein 