41-145: Alternate Tax Calculation Worksheet 41-145 (2024)
Iowa · Iowa DOR · Used for tax years 2024
The 2024 Iowa Alternate Tax Worksheet (41-145) calculates alternate income tax and compares it with tax calculated using the tax rate schedule. It also includes steps to divide the alternate tax between spouses who are married filing separately.
Who files this form
The 2024 Iowa Alternate Tax Worksheet may help you owe less tax. All filing statuses except filing status 1, Single, may qualify for the alternate tax calculation.
Single taxpayers may be eligible for the Iowa income tax reduction instead. See the Iowa Income Tax Reduction Worksheet.
If you are married filing separately, you must use both spouses’ combined Iowa taxable incomes. You cannot use the alternate tax calculation if one spouse has a net operating loss (NOL) that will be carried forward. If that spouse elects not to carry the NOL forward, you may use the calculation, but you must include a statement with the return saying the spouse will not carry it forward.
What you'll need
Have these forms and figures available to complete the worksheet, as applicable:
- IA 1040, line 4: Iowa taxable income.
- Federal Form 1040, line 12: itemized or standard deduction.
- Federal Form 1040, line 13: QBI deduction.
- IA 1040, Schedule 1, line 17, column B: NOL carryover.
- Federal Form 4972, line 8: lump-sum distributions of taxable income.
- The tax rate schedule, to calculate the tax for comparison.
Married filing separately taxpayers also need the other spouse’s income information. If a spouse elects not to carry an NOL forward so the alternate tax calculation can be used, include a statement with the return saying that the spouse will not carry it forward.
How to file
If you use the alternate tax calculation instead of the tax rate calculation on IA 1040, check the box in IA 1040, Step 5.
Compare worksheet lines 4 and 5 and enter the smaller amount on line 6:
- Filing statuses 2, 4, or 5: Also enter that amount on IA 1040, line 5.
- Filing status 3, Married Filing Separately: If line 4 is less than line 5, complete lines 7–11 to split the tax between spouses. Enter line 10 on your IA 1040, line 5, and line 11 on your spouse’s IA 1040, line 5.
- Filing status 3 when line 5 is less than line 4: Enter each spouse’s tax from the tax rate schedule on that spouse’s IA 1040, line 5.
Common mistakes
- Not checking the alternate tax box: Check the box in IA 1040, Step 5, if you use the alternate tax calculation instead of the tax rate calculation.
- Leaving out a spouse’s income: Married filing separately taxpayers must use both spouses’ combined Iowa taxable incomes. If you do not provide the other spouse’s income in IA 1040, Step 2, the alternate tax calculation will not be allowed.
- Not splitting the alternate tax between spouses: Married filing separately taxpayers must prorate the tax using lines 7–11.
- Overlooking the NOL restriction: Married filing separately taxpayers cannot use the alternate tax calculation if one spouse has an NOL that will be carried forward. If that spouse elects not to carry it forward, include the required statement with the return.
Questions people ask
Can single taxpayers use this worksheet?
No. Filing status 1, Single, does not qualify for the alternate tax calculation. Single taxpayers may be eligible for the Iowa income tax reduction; see the Iowa Income Tax Reduction Worksheet.
What amount do I enter on line 2 for tax year 2024?
Enter $13,500. Enter $32,000 instead if you or your spouse was 65 or older on December 31, 2024.
How does the worksheet compare the two tax calculations?
Line 4 multiplies the income on line 3 by 5.7% (.057). Line 5 uses the tax rate schedule to determine tax on Iowa taxable income from IA 1040, line 4. Line 6 takes the smaller amount. Married filing separately taxpayers calculate the line 5 tax separately and combine the amounts.
How do married filing separately taxpayers divide the alternate tax?
Use lines 7–11. Divide line 7a by line 8 and round to the nearest tenth of a percent. Multiply line 6 by that percentage to determine your tax on line 10. Subtract line 10 from line 6 to determine your spouse’s tax on line 11.