Iowa 124

Forum|Forum|2 years ago
February 26, 2024
1 reply
17 views

Anybody working with the new Iowa 124 form? I have a client who needs to manually limit the federal NOL to 80%. When I do that, the IA124 line 1 is pulling the limited NOL. Line 2 is the actual deduction which is the same number, leaving nothing for carryover to 2024 for Iowa.

When I don't limit the federal NOL, it pulls the full amount to line 1, minus the deduction taken, and leaves some for the following year. Which I think is correct, other than line 2 should be the limited amount.

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Best answer by MicheleLB

If you choose the "Current Year NOL" button on screen 15 there are places to override the amounts on the IA Form 124 to account for the correct federal carryover. I'm trying to figure out how to populate the IA NOL on Part II of this form. Line 4 should be the income attributable to Iowa, there isn't a place to override this amount and it's not calculating correctly.

M

MicheleLBAnswer

Level 2

If you choose the "Current Year NOL" button on screen 15 there are places to override the amounts on the IA Form 124 to account for the correct federal carryover. I'm trying to figure out how to populate the IA NOL on Part II of this form. Line 4 should be the income attributable to Iowa, there isn't a place to override this amount and it's not calculating correctly.

B

bjscheelAuthor

Level 3

Great, that fixes that part. To populate a different Iowa NOL for Line 1 of Part II, you can do that in the Iowa Net Operating Loss section of Screen 15.

As to Line 4 of Part II, in the instructions to the 124, it says it comes from line 4 of the IA1040 (without accounting for the NOL adjustment). As far as I can tell, Lacerte is doing that. I just looked at one and if I take the IA1040 line 3, then go to Iowa Schedule 1 and make the adjustments except for the NOL lines, it comes up with the same number as on the 124 line 4.

So maybe Lacerte is doing it right according to instructions? BUT, I really question if this is Iowa's intended outcome. I have a client with a large NOL. His line 4 income without the NOL adjustments is negative, so $0 on 124 Part II line 4. The effect is $150,000 of federal NOL being added to income, and no Iowa NOL being deducted. So he is paying Iowa tax on $150,000 NOL! Maybe that's right but it feels very wrong. Of course this is a March 1 farmer.

I sent an email to IDOR, but they probably won't answer fast enough. I might try calling.

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