41-134: IA 134 S Corporation Apportionment Tax Credit 41-134 (2024)

Who files this form

Use IA 134 to calculate and claim the Iowa S Corporation Apportionment Tax Credit. You may qualify if you are an S corporation shareholder who is:

• An Iowa resident individual, or
• An estate or trust with a situs in Iowa.

The S corporation must carry on business both within and outside Iowa. The form includes calculations for full-year and part-year residents.

Complete a separate IA 134 for each S corporation. Married taxpayers filing separately must each calculate their credit on a separate IA 134.

What you'll need

To complete the 2024 IA 134, have:

• Your Iowa Schedule K-1 received from the S corporation.
• Your 2024 IA 1040 or IA 1041.
• Your 2024 federal Form 1040 or Form 1041, including the applicable federal tax information used in IA 134 Schedule A.
• Your 2024 IA 126 if you are a part-year resident. The form also provides references to IA 1041 Schedule C for part-year calculations.
• The 2024 IA 148 Tax Credits Schedule, which must be completed.

You will also need the shareholder name and SSN or FEIN, plus the S corporation’s name and FEIN.

How to file

1. Complete Parts I and II using the income and modification amounts from your Iowa Schedule K-1.
2. Complete Schedule A to calculate the federal income tax attributable to the S corporation income, then complete Part III.
3. If you are a part-year resident, also complete Part IV, lines 19–22.
4. Report the credit from line 18 for full-year residents, or line 22 for part-year residents, on the 2024 IA 148, Part I, column D. Use tax credit code 11 in column A and leave column B blank.
5. Report each S corporation credit on a separate line of IA 148, Part I. Enter the corporation’s name in Part IV, column M, and its FEIN in column N.
6. Include IA 134 and IA 148 with your IA 1040 or IA 1041.

The supplied text does not provide a mailing address or e-filing directions.

Common mistakes

• Claiming both credits on the same S corporation income. If you claim this credit, you may not claim the Iowa Out-of-State Tax Credit, IA 130, for income taxes paid by you or the S corporation to another jurisdiction on that income.
• Including an Iowa NOL carryforward deduction on line 12. Exclude any Iowa net operating loss carryforward deduction from the taxable income amount entered there.
• Skipping the part-year calculation. Part-year residents must complete lines 19–22 before claiming the credit. Line 19 cannot exceed line 3. Line 20 must exclude income attributable to Iowa that was earned while you were a nonresident.
• Carrying forward unused credit. Credit exceeding your tax liability cannot be carried forward. Enter it as expired in IA 148, column G.
• Including excluded items in Schedule A, line 8. Do not include backup withholding or the fuel tax credit in the federal income tax credits related to the S corporation.

Questions people ask

What happens if I stop claiming the credit after claiming it in the previous year?

You cannot claim the credit for the three tax years immediately following the year you declined to claim it unless the Director of the Iowa Department of Revenue consents to the election.

Can I use one IA 134 for several S corporations?

No. Complete a separate IA 134 for each S corporation and report each credit on a separate line of IA 148, Part I.

What distributions go on line 8?

Line 8 includes cash distributions and the fair market value of property distributions from income not previously taxed by Iowa, subject to the exclusions listed in the line 8 instructions. Those exclusions do not exclude distributions merely because the income was apportioned outside Iowa under a prior claim for this credit.

Can a part-year resident claim this credit?

The form provides a part-year resident calculation. Complete Part IV and report the credit from line 22 on the 2024 IA 148, Part I, column D.

Official sources

• https://revenue.iowa.gov/media/4119/download?inline