Iowa Fiduciary Tax Return Instructions 63-002

Fiduciary Tax Return Instructions 63-002
IA 1120F Instructions (43-008)
2023 IA 1120F

What’s New for 2023
Third Party Disclosure Designee
Taxpayers now have the ability to authorize an
individual to receive information about this return on the
return. Above the signature line is a new section where
the taxpayer may provide contact information for the
person they wish to authorize. This authorization is
limited to discussing or receiving information about
matters related to this return, and does not authorize the
individual to act on behalf of the taxpayer. For example,
the individual could not sign a Power of Attorney form
on behalf of the taxpayer.
Authorized Signer
The person who signs this return on behalf of the
taxpayer must now attest that they have authority to act
on behalf of the taxpayer in tax matters. This attestation
will give the signer full authority to interact with the
Department on behalf of the taxpayer without the need
to file an additional Representative Certification form.
This includes the ability to discuss the return and other
tax matters with the Department, take action on behalf
of the taxpayer, and to appoint a Power of Attorney to
represent the taxpayer before the Department.
Iowa Taxable Income (Line 1)
For tax years beginning on or after January 1, 2023, the
starting point for calculating Iowa net income is federal
taxable income after the application of the federal net
operating loss deduction.
IA 124 Net Operating Loss (NOL)
Net operating losses are no longer separately
calculated for Iowa tax purposes. Taxpayers should use
the IA 124 to calculate any pre-2023 federal NOL
carryforward that must be added back or any pre-2023
Iowa NOL that may be deducted. See IA 124 for more
information.
Other Additions and Reductions Schedules
For 2023 returns, Schedule D has been discontinued
and the Other Reductions that used to be reported there
have been consolidated into Schedule A, similar to other
Iowa forms. Schedule A now includes two columns, one
for additions, the other for reductions. The line for
additions for Iowa franchise tax deducted on the federal
return has also been moved from the main form to
Schedule A. Schedule A also has a new line for net
operating loss adjustments from the IA 124 (see above).
Mandatory Electronic Filing
For tax years ending on or after December 31, 2022,
Iowa franchise taxpayers are required to file their annual
returns electronically if the taxpayer meets any of the
following conditions for the tax year:

Iowa Franchise Instructions
tax.iowa.gov

● The taxpayer has at least $250,000 in gross receipts.
● The taxpayer is claiming $25,000 or more in tax credits

on the Iowa return for the year.

● The taxpayer is an S corporation that was required to

issue 10 or more Iowa Schedule K-1s to shareholders.

See Iowa Administrative Code rule 701—8.7 for
definitions and other important information about the
electronic filing requirement.
For tax years beginning on or after January 1, 2022,
electronic filing through the Modernized eFile (MeF)
program is available to Iowa franchise taxpayers.
General Instructions
Who Must File
Entities doing business in Iowa as financial institutions
must file an IA 1120F Franchise Return for Financial
Institutions. Financial institutions include state banks as
defined in Iowa Code section 524.103, subsection 41,
state banks chartered under the laws of any of other
state, national banking associations, trust companies,
federally chartered savings and loan associations, out-ofstate state-chartered savings banks, financial institutions
chartered by the Federal Home Loan Bank Board, nonIowa chartered savings and loan associations, and
production credit associations.
When to File
Franchise tax returns must be filed no later than the last
day of the fourth month following the close of the financial
institution’s taxable year or 45 days after the due date of
the federal tax return, excluding extensions of time to file,
whichever is the latest. In order to claim a refund or credit
due to overpayment of tax, an amended return must be
filed within three years of the due date of the original
return or within one year of the date the overpayment of
tax was made. For 2023 calendar year filers, the return is
due April 30, 2024.
Where to File
Electronically file through MeF or
Mail your return to:
Franchise Tax Processing
Iowa Department of Revenue
PO Box 10413, Des Moines IA, 50306-0413
How to Pay
Pay electronically through govconnect.iowa.gov, MeF, or
ACH credit, or mail in the Iowa Tax Payment Voucher
(96-048) if making payment by check.
Make check payable to “Iowa Department of Revenue”
Questions:
[email protected]
515-281-3114 or 800-367-3388

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2023 IA 1120F Iowa Franchise Instructions, page 2
Automatic Extension of Time to File
All taxpayers who have paid 90% or more of their correct
tax on or before the original due date of their return
automatically have an additional six months in which to
file their return and pay any additional tax due with no
penalty. Taxpayers who have not paid 90% or more of
their correct tax on or before the original due date of their
franchise tax return are not allowed the additional sixmonth period of time to file, and owe both penalty and
interest on the additional tax due after the original due
date of their return. If an additional payment is necessary
in order to meet the 90% requirement, it must be made
by the original due date of the return. The automatic
extension does not change the due date of the return; it
only extends the time to file the return. Such payments
can be made electronically on govconnect.iowa.gov or by
using Iowa Tax Payment Voucher (96-048). Interest will
accrue on any tax due after the original due date of the
return. All elections made on a return filed within six
months of the original due date will be considered timely.
Amended Returns
When filing an amended return, submit the amended IA
1120F and the IA 102 Amended Return Schedule.
Federal Conformity
For tax years beginning on or after January 1, 2020, Iowa
has adopted rolling conformity, meaning the state will
automatically conform with any changes made to the
Internal Revenue Code (IRC), except as specified by
Iowa law. Taxpayers may have ongoing adjustments as
a result of Iowa’s nonconformity for tax year 2018 or 2019
that must be reported on this form. See IA 101, and
instructions to Schedule A below.
Section 179 Expensing and Bonus Depreciation
Expensing and depreciation allowed on the Iowa return
may differ from amounts allowed on the federal return.
Refer to the IA 4562A and IA 4562B.
Registration Information Changes
If you are changing the Federal Employer Identification
Number (FEIN) or the name of the financial institution,
send a letter prior to filing your tax return explaining the
circumstances and the effective date of change, and
documentation showing proof of the change. Send your
letter to:
Registration Services
PO Box 10470
Des Moines, IA 50306-0470
Apportionment of Income
All IA 1120F filers must complete the IA Franchise
Schedule 59F.
How to File
Complete all questions on the IA 1120F. Include a
complete copy of your federal return as filed with the
Internal Revenue Service (IRS). If a copy is not included,
this will not be considered a complete return. The

preparer must sign and date the return, and enter the
preparer’s PTIN, Social Security Number, FEIN, or Tax
Identification Number.
IA 1120F Instructions
Line 1: Net Income - Enter the amount of federal taxable
income (line 30 for federal 1120 filers).
Line 2: Interest and Dividends - Enter total interest and
dividends from the following sources:
● evidences of indebtedness
● securities of state and other political subdivisions
exempt from federal income tax
● obligations of United States possessions purchased
after January 1, 1991
If municipal interest taxable for Iowa purposes differs
from total municipal interest reported on the federal
return, a self-created schedule showing the difference
should be included.
Line 19: Penalty for Underpayment of Estimated Tax - A
financial institution owing $1,000 or more in franchise tax
and which has not paid adequate estimated payments is
subject to an underpayment of estimated tax penalty in
addition to the tax and any late penalties. Iowa 2220
penalties may be assessed when the amount or timing of
the estimated payments is incorrect even if the return is
overpaid by the original due date. Include IA 2220 with IA
1120F.
Line 20: Late Filing and Payment Penalties:
Failure to Timely File a Return: If the return is filed after
the original due date of the return and less than 90% of
the correct amount of tax was paid by the original due
date, multiply the unpaid tax by 5% (.05) and enter that
amount on line 20. This penalty is in addition to any
penalty for failure to timely pay the tax due, as described
below. If you are subject to both penalties, add this
penalty amount to the amount calculated below and enter
the sum on line 20.
Failure to Timely File with Zero Tax Due:
Financial institutions which are doing business in Iowa,
but have no tax due on line 12, and are filing their annual
franchise tax return after the due date must complete IA
200 to calculate their late filing penalty. Enter the amount
from IA 200, line 6 on line 20. This penalty is subject to a
minimum of $200 and a maximum of $25,000.
Failure to Timely Pay the Tax Due: A penalty of 5% must
be added to the tax due if less than 90% of the correct
amount of tax was paid by the original due date of the return.
Multiply the unpaid tax by 5% (.05) and enter that amount
on line 20. This penalty is in addition to any penalty for
failure to timely file, as described above. If you are subject
to both penalties, add this penalty amount to the amount
calculated above and enter the sum on line 20.
Audit or Examination Deficiency: A penalty of 5% will
be added to the unpaid tax if the Department discovers
an underpayment during an audit or examination.
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2023 IA 1120F Iowa Franchise Instructions, page 3
Fraud: A penalty of 75% will be added to the fraudulent
claim or unpaid tax for fraudulent claims or willful failure
to file a return.
Waivers: Penalties can be waived under limited
circumstances, as described in Iowa Code section
421.27. Complete and submit a Penalty Waiver Request
form (78-629) to request a penalty be waived. This form
is now available on govconnect.iowa.gov.
Line 22: Interest - For each month the required tax is not
paid, interest accrues on the unpaid tax at a rate
prescribed by law from the due date of the return until
payment is received. Any portion of a month is
considered a full month when calculating interest due on
unpaid taxes.
Line 24: Net Overpayment - Enter the amount of
overpayment. If applicable, reduce the overpayment by
the penalty on line 21.
Line 25: Credit to Next Period’s Estimated Tax - Enter
the amount of overpayment to be credited to future tax
liabilities. The carryforward election can only be made
when the return is filed before the end of the next tax
period. If a return is filed after the end of the next tax
period, the overpayment will not be credited, but instead
will be refunded. The total of the amount claimed for
refund and the amount claimed for credit to 2024
estimated tax must equal the overpayment amount.
Line 26: Refund Requested - Enter the amount of
overpayment to be refunded.
If you would like your refund directly deposited complete
lines 26a, 26b, and 26c, otherwise a paper check will be
issued. Do not input your direct deposit information if you
have an amount due on line 23.
26a. Input your financial institution’s routing number. The
routing number for a checking account must be nine
digits.
26b. Check either checking or savings to indicate what
type of account the refund will be deposited into.
26c. Input your account number. The account number for
a checking account may have up to 17 digits. The entire
refund amount will be deposited into this one account.
Note: The account the refund will be issued to must be
located in the United States.
IA 1120F Schedule A Instructions
Other Additions
Line 1: Include additions resulting from cash to accrual
adjustments for Iowa franchise tax and for federal taxexempt interest and dividends. Provide cash to accrual
worksheets.
Line 2: Complete the Expense to Carry Investment
Subsidiary Worksheet below and include a copy with the
IA 1120F.

IA 1120F Expense to Carry Investment Subsidiary
Worksheet
Iowa Code section 422.61 does not allow franchise
taxpayers to deduct expenses allocable to investments in
an investment subsidiary. The Iowa addition is applicable
to all financial institutions with investments in an
investment subsidiary. See Iowa Administrative Code
rule 701—602.20 for further details.
1. Total federal deductions from federal 1120, line
27.
$
2. Investment assets in investment
subsidiary
$
3. Total financial institution assets
$
4. Ratio. Divide line 2 by line 3,
carried to one ten thousandth
of 1% by rounding to six decimals.
(For example, .1234505 becomes
12.3451%.)
(__ __ . __ __ __ __)
5. Iowa addition. Multiply line 1
by line 4.
$
Enter this addition on the IA 1120F Schedule A, line 2.
Line 4: Add any contributions deducted in excess of the
federal limitation on a separate company basis.
Line 5: Enter any net capital loss included in the
computation of line 1 of the IA 1120F on a separate
company basis.
Line 6: Include the Iowa depreciation adjustment from IA
4562A.
Line 7: Enter the amount of Iowa franchise tax deducted
on your federal return.
Line 8: Enter the adjustment from IA 124, Part I, line 3.
Line 9: Add any other additions to income not already
included elsewhere including any adjustments from IA
101, if any, to the total entered on this line.
Other Reductions
Line 1: Include reductions resulting from cash to accrual
adjustment for Iowa franchise tax and for federal taxexempt interest and dividends. Provide cash to accrual
worksheets.
Line 3: Include any interest expenses disallowed under
sections 265(b) or 291(e)(1)(B) of the Internal Revenue
Code.
Line 4: Deduct net contributions previously not allowed
as an Iowa deduction, which were not taken at the federal
level.
Line 5: Enter any net capital loss previously not allowed
as an Iowa deduction, which was not taken at the federal
level.
Line 6: Include the Iowa depreciation adjustment from IA
4562A.
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2023 IA 1120F Iowa Franchise Instructions, page 4
Line 7: Enter the Iowa franchise tax refund reported on
your federal return.

an IA 8821 Tax Information Disclosure Designation form
or IA 2848 Power of Attorney form.

Line 9: Add any other reductions from income not
already included elsewhere including any adjustments
from IA 101, if any, to the total entered on this line.

This authorization is limited to the ability to discuss the
return and receive return information from the
Department. It does not authorize the individual to act on
behalf of the taxpayer, or to appoint another person as
Power of Attorney for the taxpayer.

Amounts entered on this line may include, but are not
limited to, the following:
● The net Global Intangible Low-Taxed Income (GILTI)
to the extent included on IA 1120F, line 1.
● The amount of a federal, state, or local grant provided
to a communications service provider during the tax
year, to the extent included on IA 1120F, line 1, if the
grant was used to install broadband infrastructure that
facilitates broadband service in targeted service areas
at or above the download and upload speeds.
● The amount of any qualifying COVID-19 grant
identified in Iowa Administrative Code rule 701—
602.32 to the extent included on IA 1120F, line 1.
IA 1120F Schedule C Instructions
Payments
List the exact amount of each payment. Amended return
filers must record the tax amount previously paid or
refunded on the original return on Schedule C and
reduce or increase net payments accordingly.

Authorized Signer: By signing this form, you attest that
you are authorized to act on behalf of the financial
institution in tax matters. The Department will consider
the person who signs this form to have full authority to
interact with the Department on behalf of the taxpayer
without the need to file an additional Representative
Certification form. This includes the ability to discuss the
return and other tax matters with the Department, take
action on behalf of the taxpayer, and to appoint a Power
of Attorney to represent the taxpayer before the
Department.
Preparer’s Information: If the return was prepared by
someone other than the taxpayer, all lines for preparer
information must be completed. Enter the FEIN or PTIN
for the preparer’s identification. A Tax Return Preparer as
defined by Iowa Code section 421.62 may be subjected
to penalty for failure to include their PTIN.

Confidentiality and Fair Information Practices Notice:
Information from this return may be made available to the
IRS or to tax officials of another state under a tax
information exchange program. Except as allowed by law,
information on this return cannot be released to anyone
who is not an Iowa Department of Revenue or IRS
employee. Any Department of Revenue employee who
discloses tax information without legal authority is subject
to a fine of $1,000.
Any applicable information requested must be provided.
The information is necessary to complete, correct, or
process tax returns; to calculate tax due; to collect tax,
interest, and penalties, or to carry out administrative
duties. If necessary information is not provided, or if
fraudulent information is provided, penalties and interest
may be assessed, and criminal prosecution may result.
Without required information, the exemptions, credits,
deductions, or adjustments shown on returns may be
disallowed.
Third Party Disclosure Designee: If the taxpayer would
like to designate an individual to discuss this return with
the Department, complete this section with that
individual’s information.
An individual listed in this section will be able to discuss
and receive information from the department about this
return. This authorization is specific to the corporate
income tax return for this tax year. If the taxpayer wishes
to have this individual represent the taxpayer on other
matters, or for other tax years, the taxpayer must submit
43-008d (08/31/2023)