41-105: IA 4562A/IA 4562B Depreciation Adjustment Schedule 41-105 (2024)

Who files this form

Complete the 2024 IA 4562A if you claimed depreciation on property, or disposed of property, for which Iowa depreciation adjustments were made in earlier tax years.

The printed instructions also require this form for taxpayers with certain earlier federal and Iowa differences, including:

• Federal section 179 expense above $25,000 for tax years beginning in 2003 through 2005, if you chose to claim no more than $25,000 for Iowa.
• Federal section 179 expense above $133,000 for tax years beginning in 2009; $25,000 for tax years beginning in 2016 or 2017; $70,000 for tax years beginning in 2018; or $100,000 for tax years beginning in 2019.
• Five-year depreciation on certain new farming machinery and equipment purchased in 2009.
• Property used in a farming business placed in service after December 31, 2017, and before January 1, 2019, using the federal 200% declining balance method. Iowa requires the 150% method for that property.
• Iowa like-kind exchanges of personal property in tax years 2018 or 2019 that resulted in different Iowa and federal bases.
• Passenger vehicles placed in service during tax year 2018 with regular first-year federal depreciation above $3,560 for trucks and vans or $3,160 for other passenger vehicles.
• The specific federal cost recovery adjustments listed in the instructions under the Tax Cuts and Jobs Act, the Taxpayer Certainty and Disaster Tax Relief Act, or the CARES Act.

For tax years beginning on or after January 1, 2021, Iowa fully conforms with federal bonus depreciation. No adjustment is required on this form for property placed in service during those tax years if federal bonus depreciation was taken.

Use IA 4562B to record the cumulative effect of adjustments computed on IA 4562A.

What you'll need

Have these forms and records available, as applicable:

• Your name, SSN or FEIN, and any applicable pass-through entity name and FEIN.
• Asset records showing descriptions, dates placed in service, asset lives, costs or other bases, and current-year and accumulated federal and Iowa depreciation and section 179 expense.
• Federal Form 4562, including lines 9 through 12, for the section 179 calculations.
• Sale or disposal dates and total Iowa and federal depreciation and section 179 expense for disposed property.
• Prior IA 4562As and tax-period adjustment amounts for the accumulated adjustment schedule.
• Your 2023 column H worksheet, if you have an Iowa section 179 carryforward.
• Your 2018 or 2019 IA 4562A, Part IV, if you made a special election in either year.
• The applicable prior IA 8824, including line 25, if disposed property had different Iowa and federal like-kind exchange treatment.

If you group assets by class, keep records supporting how each asset was grouped.

How to file

Include IA 4562A and IA 4562B with your Iowa tax return. The supplied text does not give a mailing address or e-file directions.

1. If you made a special election in 2018 or 2019, complete IA 4562B, Part II, before IA 4562A, Part I.
2. Complete IA 4562A, Part I, for qualifying property. You may include a separate property schedule or group assets by class.
3. Complete Part II for applicable sales or dispositions. Otherwise, skip to Part III.
4. In Part III, subtract line 2 from line 1, then add the disposition adjustment on line 4. Report the resulting line 5 amount on your Iowa return.
5. Complete IA 4562B, Part I, to update your accumulated adjustments.

Report IA 4562A, Part III, line 5 as follows:

• IA 1040: Schedule 1, line 9, Column A for positive amounts or Column B for negative amounts.
• IA 1041: Schedule A additions, line 4 for positive amounts or Schedule A subtractions, line 6 for negative amounts.
• IA 1065, IA 1120S, or IA 1120F: Schedule A, line 6.
• IA 1120: Schedule A, line 8.

Common mistakes

• Putting accumulated deductions in current-year columns. Columns E, F, H, and I are only for current-year deductions, not prior-year or accumulated amounts.
• Using an incorrect section 179 total. Column E must equal federal Form 4562, line 12. Column H's total must equal line 7 of the column H worksheet, even if the business income limit makes it less than the sum of the entries in that column.
• Sending the column H worksheet with the return. Keep it for your records instead. You must provide carryover documentation if the Department requests it.
• Including qualifying Iowa like-kind exchange dispositions in Part II. Do not include personal property given up in a qualifying Iowa like-kind exchange reported on IA 8824.
• Failing to keep prior IA 4562As. You must provide copies if requested. Failure to do so will delay processing or cause denial of your adjustment.
• Leaving out IA 4562B notation. Enter negative adjustments in parentheses and place an asterisk after a tax period if its adjustment changed from the amount originally claimed.

Questions people ask

What is the difference between IA 4562A and IA 4562B?

IA 4562A computes Iowa depreciation and disposition adjustments. IA 4562B records their cumulative effect and includes the special election deduction table.

Can I group assets instead of listing each one separately?

Yes. You may group assets by class, such as all three-year assets or all five-year assets. You must keep records supporting how each item was grouped.

Do I need to complete Part II if I did not sell or dispose of adjusted property?

No. If you did not sell or dispose of property for which an Iowa depreciation adjustment was applied, you may skip IA 4562A, Part II.

Does the business income limit apply to Iowa section 179 deductions?

Yes. The current-year Iowa section 179 amount, including special election deductions, is limited to business income in the same manner as the federal section 179 deduction. Use the column H worksheet to calculate the allowable amount.

Where do I start the accumulated adjustment history on IA 4562B?

Start with the first tax period in which you made a depreciation or section 179 adjustment on your Iowa return. Enter each subsequent tax period through the current period, and update the balance by each period's adjustment.

Official sources

• https://revenue.iowa.gov/media/4115/download?inline