Iowa Department of Revenue Forms & Instructions
IA 1120S Instructions — Iowa Income Tax Return of S Corporation
preamble
2025 IA 1120S Iowa Income Tax Return of S Corporation
Instructions
Recent Changes • Amended Returns: Lines 44a and 44b have been added for use by amended return filers only, to account for refunds and credit carryforwards already claimed for the tax year. • S corporations may make a Pass -Through Entity Tax (PTET) election to be subject to tax at the entity level. See the instructions below for Part 6 for more information. S corporations that make a PTET election are subject to the requirement to make estimated payments. • The Department modified the PTET election deadline. A PTET election must be made by the date which is six months after the original due date for filing the IA 1120S. • Schedule C is used to report payments made by the S corporation for the tax year. • All S corporations are required to complete Schedule E Iowa Business Activity Ratio (BAR) , even if all of its business is conducted in Iowa. • Taxpayers may authorize an individual to receive information about this return. See the instructions below for Third Party Disclosure Designee for more information. • The person who signs this return on behalf of the taxpayer must 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. See the instructions below for Authorized Signer for more information. • Due to recent legislative changes , several adjustments that were previously required or allowed on Schedule A have been repealed. These lines have been removed from the schedule and reserved for future use. See the instructions below for Schedule A for more information. Repealed adjustments include: • Percentage depletion for oil, gas, and geothermal wells • TIP credit from federal form 8846 • Safe harbor lease adjustments • Iowa tax expense/refund • Work opportunity credit wage reduction • Alcohol and cellulosic biofuel credit from federal form 6487 • Qualifying Iowa COVID-19 grants
Who Must File
Every S corporation doing business in Iowa or deriving income or loss from real, tangible, or intangible property located or having a situs in Iowa must file an IA 1120S Iowa Income Tax Return for S Corporation. The IA 1120S must also be used by interest charge domestic international sales corporations and foreign sales corporations. If the S corporation is a financial institution, it must also file an IA 1120F Franchise Return for Financial Institutions (43-001). Note: Only S corporations with activity (income or loss) from Iowa sources as described above, or which have a commercial domicile in Iowa, are required to file. An S corporation should not file if its only connection to Iowa is because one or more shareholders are Iowa residents. What Must be Filed To be considered a complete return and not subject to late filing penalties, all of the following must be timely filed with the Department: • An annual Iowa Income Tax Return for S corporation (IA 1 120S) including all required schedules and attachments. • An IA 1120S Schedule K-1 for each person who was a shareholder at any time during the taxable year. • A copy of the federal S corporation 1120-S return and all supporting schedules, not including federal Schedules K-1. Time and Place for Filing The Iowa S corporation return must be filed on or before the last day of the fourth month following the close of the S corporation's tax year. For calendar year filers, the due date is April 30, 2026. If the S corporation is required to file a short period return consisting of fewer than 12 months, the Iowa short period return is due 45 days after the due date of the federal short period return. Every S corporation that owes no Iowa tax and does not file by the original due date automatically receives a 6-month extension of time to file after the original due date, provided the return is filed within that 6-month period. No extension request form is required. If the S corporation is making the PTET election (see Part 6 below) or owes tax on builtin gains or passive investment income (see Part 5 below), a 6-month automatic extension, to file a return, will be granted only if at least 90% of that total tax liability is paid by the original due date of the return. Late-filed returns are subject to penalty.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 2 For more information, see the instructions for Part 8, lines 47 and 48 below. Mandatory Electronic Filing For tax years ending on or after December 31, 2022, an S corporation must file its annual return with the Department electronically using the federal modernized e-file system (MeF) if it meets any one of the following conditions for the tax year. • The S corporation has $250,000 or more in total gross receipts. • The S corporation is required to provide 10 or more IA 1120S Schedules K-1 to shareholders. • The S corporation is reporting $25,000 or more in Iowa tax credits on Schedule B of its Iowa S corporation return. See Iowa Administrative Code rule 701-8.7 for definitions and other important information about the electronic filing requirement. All S corporations are encouraged to file electronically. If an S corporation return is subject to the electronic filing requirement , but it is filed in another manner, it is not considered a valid return unless the Department provides an exception to the electronic filing requirement. Complete and submit an Electronic Filing Requirement Exception Request (78-641) form to request an exception from the electronic filing requirement. Mail paper returns to: Corporation Tax Return Processing PO Box 10468 Hoover State Office Building Des Moines Iowa 50306-046
OTHER IMPORTANT INFORMATION
Conformity with the Internal Revenue Code (IRC) For tax years beginning on or after January 1, 2020, Iowa has adopted rolling conformity, meaning the state will automatically conform to any changes made to the IRC, except as specified by Iowa law. Composite Filing Iowa Code section 422.16B imposes composite return filing and tax remittance obligations on S corporations for tax years beginning on or after January 1, 2022. An S corporation with nonresident shareholders is required to file an IA PTE -C Iowa Composite Return and remit Iowa income or franchise tax on behalf of its nonresident shareholders, unless the S corporation makes a timely PTET election for the same tax year or meets one of the composite return filing exemptions described in Iowa Administrative Code rule 701- 405.5(1). A nonresident shareholder is any shareholder who is a nonresident individual; an estate or trust without a situs in Iowa; or a corporation, partnership, or other business entity without a commercial domicile in Iowa. For more information, see the instructions for Part 3 below and the IA PTE-C Iowa Composite Return (41-174). The IA 1040C has been discontinued for any S corporation tax year that begins on or after January 1, 2022. Disregarded Entities An S corporation that owns 100% of an entity that is disregarded as a separate entity for federal income tax purposes must report the activities of that disregarded entity on its Iowa S corporation return, and must include an IA Schedule DE Iowa Disregarded Entity Schedule (41-179) with its return.
Iowa Resident Out-of-State Tax Credit
Iowa Code section 422.8 and Iowa Administrative Code rule 701-304.6 allow Iowa residents to claim the Iowa Out-of-State Tax C redit for certain entity - level income taxes paid by a n S corporation to another state, local jurisdiction, or foreign country on income also subject to tax in Iowa only if the resident shareholder receives a qualifying supplemental schedule from the S corporation reporting certain information. If the S corporation paid entity -level income tax (including composite return income tax , but not including withholding tax ) to another qualifying jurisdiction on the distributive share of the resident shareholder's income also subject to tax in Iowa, the S corporation must provide a qualifying supplemental schedule identifying the jurisdiction to which the income tax was paid, the pass -through entity that paid the income tax, and the shareholder's pro-rata share of the income, tax liability, and tax paid in that jurisdiction. A shareholder will not be permitted to claim an Out-of-State Tax Credit on the IA 130 (41-130) for that income tax unless the shareholder r eceives that qualifying supplemental schedule from the S corporation and submits a copy with the IA 1040 Iowa Individual Income Tax Return (41-001). If the S corporation is itself an owner of another passthrough entity that paid entity -level income tax to another qualifying jurisdiction on income also subject to tax in Iowa, and the S corporation receives a qualifying supplemental schedule from that pass - through entity, the S corporation may in turn report that income tax to its shareholders on a qualifying supplemental schedule with the shareholder's IA Schedule K-1.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 3 When reporting this other pass -through entity's income tax to its shareholders, the S corporation must reduce the income tax by the amount of any credit available from that other jurisdiction to the S corporation related to the income tax payment. The S corporation may not report this tax to its shareholders as described above if the S corporation does not receive the qualifying supplemental schedule from the other pass-through entity. The S corporation should keep the schedule it received from the other pass -through entity because the Department may request it of the resident shareholder in order to prove the credit claimed on the IA 130. The resident shareholder is responsible for providing documentation of the out-of-state tax paid by a passthrough entity at the Department's request Example: Partnership X earns $2,000 of income in State A, which imposes an entity -level income tax directly on the partnership. Partnership X pays $100 of income tax to State A. Partnership X is owned 50% by S corporation Y, and provides a schedule to S corporation Y indicating that Y's pro-rata share of the income taxed by State A is $1,000, and Y's pro-rata share of the income tax imposed by and paid to State A is $50. S corporation Y does not receive a credit in State A for its share of the tax paid by Partnership X. S corporation Y is owned 50% by individual Z, a resident of Iowa. S corporation Y provides a schedule to individual Z indicating that Z's pro- rata share of Partnership X's income taxed by State A is $500, and Z's pro-rata share of Partnership X's income tax imposed by and paid to State A is $25. Individual Z may use the income and tax amounts reported on that schedule in completing Z's IA 130 Iowa Out-of-State Tax Credit Schedule, provided that the $500 of income identified on the schedule is also reported on individual Z's IA 1040 return and is taxed by Iowa. Tax Credits S corporations may earn various tax credits or receive tax credits passed through to them from another pass-through entity. These tax credits must be reported on Schedule B of the IA 1120S and are then allocated to shareholders on the IA Schedule K-1. Shareholders cannot claim these allocated tax credits until the S corporation has filed an S corporation return that properly reports the available tax credits on Schedule B. For more information, see the instructions for Schedule B below. S corporations may also receive composite credits from another pass-through entity for Iowa income tax paid on behalf of the S corporation, or PTET credits for entity -level Iowa income tax paid by the pass - through entity . These credits are not reported on Schedule B and allocated to shareholders , but instead must be claimed by the S corporation on Part 8, line 43 of this return, or on the IA PTE-C. Amended Returns If an amended federal return was filed, or if other errors are discovered on the Iowa return, the taxpayer must file an amended Iowa S corporation return, IA 1 120S, check the "Amended Return" box and include the IA 102 Amended Return Schedule (41-171), as well as the other required supporting documentation. If the S corporation was required to file its original return electronically, the S corporation's amended Iowa return for the same tax year must be filed electronically. Federal Centralized Partnership Audit Regime For tax years 2018 and forward, the IRS makes audit adjustments and generally collects taxes at the partnership level for partnerships subject to the federal centralized partnership audit regime. If the S corporation was a direct or indirect partner in a partnership that is audited by the IRS resulting in adjustments that affect Iowa tax liability, the S corporation must follow certain procedures and timelines for reporting those adjustments to Iowa, even if the S corporation or shareholders were not responsible for filing a federal amended return or paying additional federal tax. Similar procedures and timelines also apply to an affected partnership and its direct and indirect partners for amendments to returns requested on a centralized administrative adjustment request (AAR). For more information, see the Department's guidance on reporting federal income tax changes to Iowa available at revenue.iowa.gov and Iowa Code section 422.25A.
Iowa Pass-Through Entity Audits
For tax year 2020 and forward, any audit of an S corporation by the Department will be conducted solely at the S corporation level through the entity's Iowa pass -through representative. If an S corporation is audited by the Department resulting in adjustments to Iowa tax liability, the S corporation and its owners must follow certain procedures and timelines for reporting the adjustments to Iowa and paying any resulting Iowa tax.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 4 For more information, see Iowa Code sections 422.25B and 422.25C. These provisions may be applied to a tax year prior to 2020 if the Department, the pass-through entity, and the pass-through entity owners agree. For Additional Information Contact Taxpayer S ervices at 515- 281-3114 or 800-367-3388 8 a.m. - 4:30 p.m. CT or email idr@iowa.gov
COMPLETING THE RETURN
Calendar Year or Fiscal Year Enter tax period beginning and ending dates as MM/DD/YYYY. The Iowa S corporation return must be made on the same period basis as the S corporation accounts are required to be kept for federal tax purposes, even if shareholders report their income on a different year basis.
Part 1: Corporation Name and Address
• If the S corporation has a Federal Employer Identification Number (FEIN), it must be entered here. If the S corporation has applied for but not yet received a number, enter "applied" and inform the Department of the number once it is obtained. For information on obtaining an FEIN, contact the Internal Revenue Service (IRS) at 800-829-4933. • Enter the county number of the main Iowa location. S corporations without a physical location in Iowa should enter 00. A list of county numbers can be found on the Department website (revenue.iowa.gov). • Enter the North American Industry Classification System (NAICS) Code for the specific industry group corresponding to the S corporation's primary business activity. • Enter the total number of shareholders, total number of Iowa resident shareholders, and total number of Iowa nonresident shareholders. A resident share - holder is any shareholder who is a resident individual; an estate or trust with a situs in Iowa; or a business entity with a commercial domicile in Iowa. Include a corresponding IA Schedule K-1 for each person who was a shareholder at any time during the tax year. Part 2: Pass-Through Representative (PTR) Enter the required information about the person the S corporation is appointing as its Iowa pass-through representative (PTR) for the tax year. An S corporation is required to have an Iowa PTR for each tax year. There can be only one Iowa PTR for each tax year. An S corporation may appoint any qualifying person, including itself or a different entity, to be its Iowa PTR. If the S corporation appoints itself or another entity as its Iowa PTR, the S corporation is required to appoint a designated individual as the sole individual to act on behalf of the entity PTR. An Iowa PTR has the sole authority to act on behalf of the S corporation for the purpose of Iowa amended income tax returns, audits, examinations, and appeals. The S corporation and its shareholders are bound by the actions of the Iowa PTR. If the S corporation desires to change its Iowa PTR for the tax year at a later date, it must use the IA 8979 Iowa Pass-through Representative Appointment (41-173) form, not an amended Iowa S corporation return.
Part 3: Corporation Information
Check the type of return and type of entity that is filing this return. Corporation Activities-A nswer the questions about the corporation's activities. Composite Return Requirement -Answer the questions about the S corporation's nonresident shareholders. If the answer is "No" to the questions, the S corporation is not required to file an IA PTE -C Iowa Composite Return in addition to the IA 1120S. If the answer is "Yes" to either question "i" or "ii", the S corporation is required to file an IA PTE-C and pay any composite tax due on behalf of its nonresident shareholders, unless the S corporation is making a PTET election for the same tax year or satisfies one of the composite return filing exemptions described in Iowa Administrative Code rule 701-405.5(1).
Part 4: S Corporation Distributive Items for Iowa
Tax Purposes. Lines 1-12: For each line, enter the amount from the corresponding line of the S corporation's federal 1120-S return. Line 14 : Enter the separately stated section 179 deduction from the S corporation 's federal 1120-S, Schedule K. Line 15: Enter the sum of the other separately stated deductions from the S corporation's federal 1120-S return, Schedule K, line 12. However, do not include any amount that is only informational and not available as a current -year deduction to the shareholder. Line 18: Additions to S corporation income may be required under Iowa law. Enter the total Additions from IA 1120S, Schedule A, line 16.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 5 Line 19: Reductions to S corporation income may be allowed under Iowa law. Enter the total Reductions from IA 1120S, Schedule A, line 16. Line 22 : If the S corporation has nonbusiness income, complete Schedule D. Enter the amount from Schedule D, line 17, on this line. Line 24: Enter the S corporation's Business Activity Ratio (BAR) from the IA 1120S, Schedule E, line 13. Line 26 : Enter the S corporation's nonbusiness income allocated to Iowa from the Schedule D, line 8.
Part 5: Built -In Gains or Passive Investment
Income Tax S corporations that are subject to federal tax on builtin gains under Internal Revenue Code (IRC) section 1374 or passive investment income under IRC section 1375 are subject to Iowa corporation income tax on this income to the extent received from business carried on in this state or from sources in this state. Line 28: The starting point for computing the Iowa tax on built-in gains income is the amount of built -in gains income (including built -in gain carryforward amounts) calculated for federal tax purposes after considering the federal income limitation. Enter the S corporation's net recognized built -in gains from its federal 1120-S return, Schedule D. Iowa is conformed to the federal 5- year recognition period for determining the Iowa built -in gains tax, except for certain installment sales made during tax years 2016- 2018 when Iowa used a 10- year recognition period. For more information on these installment sales, see the Department's guidance on built-in gains, available at revenue.iowa.gov. Line 29: The starting point for computing the Iowa tax on passive investment income is the amount of excess net passive income calculated for federal tax purposes after considering the federal income limitation. Enter the amount from line 10 of the S Corporation's Excess Net Passive Income Tax Worksheet for Line 23a, found in the instructions for federal Form 1120-S.
Line 33: Any remaining Iowa net operating loss
(NOL) carryforward arising from a tax year ending prior to January 1, 2025 for which the corporation was a C corporation is allowed as a deduc tion against the built -in gains and excess passive investment income to the extent the Iowa NOL carryforward period has not expired. Enter any remaining Iowa NOL carryforward amount on this line, and include a schedule documenting the corporation's entitlement to such Iowa NOL. For purposes of determining the amount of any remaining Iowa NOL which may be carried forward to any future tax years, the amount of the net recognized built -in gain or excess net passive investment income is treated as taxable income. Line 34: Subtract line 33 from line 32. If the result is less than zero, enter zero. This is the corporation's built-in gains and passive investment income subject to Iowa tax. Line 35: The amount of Iowa taxable built -in gains and passive investment income computed on line 34 is subject to Iowa tax at the same rates as C corporation income (5.5%, 7.1%). $100,000 or less, multiply by 5.5%. Over $100,000, multiply by 7.1% and subtract $1,600. If you are using this form to file for a short tax year that began in 2026 , use the 2026 corporate income tax rates.
Line 36: Any Iowa tax credit carryforward under Iowa
Code section 422.33 arising in a taxable year for which the corporation was a C corporation is allowed against the gross tax on Iowa built -in gain and passive investment income computed on line 35, to the extent the Iowa tax credit's carryforward period has not expired. Enter any remaining Iowa tax credit carryforward on this line, and include a schedule documenting the corporation's entitlement to such Iowa tax credit. Line 37: Subtract line 36 from line 35. If the result is less than zero, enter zero. This is the corporation's net Iowa tax on Iowa built-in gain and passive investment income. Part 6: Pass-Through Entity Tax (PTET) Election If you are electing or have already elected to be subject to the entity level tax for this tax year pursuant to Iowa Code section 422.16C, check the box. This election is irrevocable and must be made by the date which is six months after the original due date for filing your return. The election is valid only for this tax year. A PTET election may be made by the election deadline even if your income tax return and payment will be late, but you may be subject to late file and late pay penalties. See Part 8 instructions.
Line 38: Multiply the amount on Part 4, line 27 by
3.8% (0.038).
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 8 Line 39: A financial institution subject to the Iowa franchise tax that is organized as a pass -through entity is eligible to claim a franchise tax credit against the Iowa PTET. Enter the amount from your 2025 IA 1120F, line 13. If zero or less, enter zero. The entity must file and pay its franchise tax liability in order to claim this franchise tax credit against its Iowa PTET. Amounts entered to a disregarded entity will be denied if IA Schedule DE Iowa Disregarded Entity Schedule (41-179) is not included. Line 40: Subtract line 39 from line 38. If zero or less, enter zero. This is the S corporation's net Iowa PTET due. Note about Iowa PTET credits. The S corporation's net Iowa PTET calculated on this line 40 is used to determine the total refundable Iowa PTET credits available to shareholders, but the amount must be reduced by the applicable percentage before it is reported to shareholders on the Iowa Schedules K-1. The total available Iowa PTET credits equal s the S corporation's net Iowa PTET from line 40 multiplied by 96.2% (.962). This total available PTET credit amount is reported on IA 1120S, Schedule K, line 20, column (d), and then allocated to each shareholder on the Schedule K-1 in the same ratio that the S corporation's taxable income is allocated to the shareholder.
Part 7: Audit Election to Pay
Line 41: If you are filing an amended return to report changes from a federal centralized partnership audit or an Iowa pass -through entity audit, and you are making an irrevocable election to pay the tax, penalty, and interest resulting from that audit on behalf of your shareholders, check the box above line 41 and complete the IA 103 Pass-Through Audit
Election to Pay Schedule (41-172). Report the tax from the IA 103, line 26 on this line. Include the IA 103 with your amended return. When an election to pay on your shareholders' behalf is made, do not issue amended IA 1120S Schedules K -1 to your shareholders, but instead notify the shareholder of all of the following in a separate letter or schedule: (1) identify the shareholder's distributive share of the audit adjustments, (2) notify the shareholder that you have elected to pay the resulting Iowa tax, penalty, and interest on their behalf, and (3) notify the shareholder that the shareholder shall not claim any deduction, credit, or refund for the amount paid by the S corporation, and the shareholder may not include the amount paid on the shareholder's Iowa return in any manner. S corporations may also make estimated payments of expected Iowa tax resulting from a pending Internal Revenue Service (IRS) audit. A federal audit estimate payment must be made through GovConnect.Iowa.gov.
Part 8: Total Tax, Penalty, and Interest Due
Line 43: Enter the amount of composite and PTET credits received that you are claiming on this return. Do not enter any credits that have been or will be claimed on an IA PTE-C or IA 1120F. Include the IA
Schedule CC Iowa Composite Credits and PTET Schedule (41-178) with your return.
Line 44: Enter the amount of payments from
Schedule C, line 4. Lines 44a and 44b: Amended returns only. Enter any refunds or credit carryforwards already claimed on a prior return for this year on line 44a. Subtract the amount on line 44a from the payments shown on line 44, and enter the result on line 44b. Note: Credit carryforward amounts claimed on a return can only be changed within one year of the end of the tax year for which the overpayment was made. If you are amending within one year of the end of the tax year and wish to reduce the credit carryforward am ount you elected to apply to next year on a prior return, do not include the amount you previously elected to have carried forward to next year and no longer wish to apply as a carryforward, on this line. Instead, include only the revised amount you still wish to carryforward to the next year. This option is not available if your amended return is filed more than one year after the close of the tax year. Line 46: If payment is received after the payment due date, interest accrues on the unpaid tax at a rate prescribed by law from the payment due date until payment is received. Any portion of a month is considered a full month in calculating interest due on unpaid tax.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 7 Line 47: Enter your late payment penalties associated with the unpaid tax due. Pursuant to Iowa law under the audit election to pay , penalties on the amount due by the S corporation will be computed from the due date of the S corporation's original return without extension, and shall be imposed as if the S corporation was required to pay tax or show tax due on the original return. S corporations subject to built-in gains or passive investment income tax, or who make the PTET election may be subject to the failure to timely pay penalty. The S corporation may be subject to the following penalties: Failure to Timely Pay the Tax Due: A penalty of 5% must be added to the unpaid tax if less than 90% of the correct amount of tax was paid by the original due date of the return. Multiply the unpaid tax due by 5% (.05) and enter that amount on line 4 7. This penalty is in addition to any penalty for failure to timely file, as described below on line 48. 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. This penalty is in lieu of the failure to timely pay penalty described above, but is in addition to any penalty for failure to timely file described below on line 48. Fraud: A penalty of 75% will be added to the 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 (78- 629) form to request a penalty be waived.
Line 48: If the S corporation files its IA 1120S return after the due date, including extensions, and owes
Iowa tax on built -in gains or passive investment income on line 35 or made a timely PTET election and owes Iowa PTET on line 40, it may be subject to the following penalties: Failure to Timely File a Return: If the IA 1120S return is filed after the original due date of the return and less than 90% of the correct amount of Iowa tax was paid by the original due date, multiply the unpaid Iowa tax by 5% (.05) and enter that amount on line 48. This penalty is in addition to any penalty for failure to timely pay the tax due. Fraud: A penalty of 75% will be added to the 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 (78-629) form to request a penalty be waived. S corporations that do not owe Iowa tax on built -in gains or passive investment income on line 37, or net PTET on line 40, but that file their IA 1120S return after the due date, including extensions, are subject to a late filing penalty. For more information, see Iowa Code section 421.27(1)(b) and Iowa Administrative Code rule 701-10.6(2). If you are filing your return late and do not owe Iowa tax on built-in gains or passive investment income (line 37) and did not make the PTET election, use the worksheet below to compute your imputed late filing penalty. Enter the result from line 6 of the worksheet on line 48. Imputed late filing penalty worksheet 1. Iowa-source S corporation distributive items from Part 4, line 27 ................. 1. ____________ 2. Imputed Iowa tax for penalty purposes (multiply line 1 by 3.8% (.038)) .............. 2. ____________ 3. Iowa tax credits from Schedule B and from line 43 .. 3. ____________ 4. Imputed Iowa tax liability for penalty purposes. Subtract line 3 from line 2. If less than $0, enter $0 .......... 4. ____________ 5. Multiply line 4 by 5% (.05). Enter the lesser of that amount or $25,000 .......... 5. ____________ 6. Late filing penalty. Enter the greater of line 5 or $200 ....................................... 6. ____________
Line 49: If the S corporation owes Iowa tax on built-in gains or passive investment income , or made the
PTET election, use the IA 2220 Underpayment of Estimated Tax (45 -006) to determine if the correct amount of estimated tax was paid by the due date. Enter any underpayment of estimated tax penalty on this line, and include the IA 2220 with the return.
Line 50: Payment options include payment through
Modernized eFile (MeF), GovConnect.Iowa.gov, or payment by check. Go to the Department's website for electronic payment options. Do not send cash. Submit a voucher if making a payment by check. Vouchers are available on GovConnect.Iowa.gov. Line 52: Enter the amount of overpayment to be credited to the next tax period. This credit can only be changed after the due date of the return if the change is requested by the last day of the next tax year.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 8 Line 53: If you would like your refund via direct deposit complete lines 53a, 53b, and 53c; otherwise, a paper check will be issued. Do not input your direct deposit information if you have an amount due on line 50. 53a. Input your financial institution's routing number. The routing number for an account must be nine digits. 53b. Check either checking or savings to indicate which type of account the refund will be deposited into. 53c. Input your account number. The account number for an account may have up to 17 digits. The entire refund amount will be deposited into this one account. The account the refund will be issued to must be located in the United States.
Schedule A -Additions and Reductions
Schedule A is used to document those modifications or adjustments to net federal Schedule K income/loss (IA 1120S, Part 4, line 17) that are required by Iowa Code section 422.35 and Iowa Administrative Code 701chapter 502 to the extent applicable to S corporations. Additions to Iowa income are reported in the "Additions" column, and reductions to Iowa income are reported in the "Reductions" column. All entries on Schedule A must be reported as positive amounts.
Line 4: Interest expense adjustments from IA 163
Enter any addition or reduction to income from Form IA 163 I nterest Expense Adjustments (42-039), line 6. Include the IA 163 with your return. Line 6: Expensing/depreciation adjustments from IA 4562A/B IRC s ection 179 expensing and depreciation allowed on the Iowa return may differ from amounts allowed on the federal return. Enter any addition or reduction to income from the IA 4562A Iowa Depreciation Adjustment Schedule (41- 105) and IA 4562B Iowa Accumulated Depreciation Adjustment Schedule (41-105). Include the IA 4562A and IA 4562B with your return. Line 7: Tax exempt interest and dividends Add as an addition the amount of interest and dividends from foreign securities and from securities of state and other political subdivisions that are exempt from federal income tax but not exempt from Iowa income tax. Exclude interest received from certain Iowa bonds, which are listed in Iowa Administrative C ode rule 701- 302.3. See also Iowa Administrative Code rule 701- 502.6.
Line 11: Federal securities interest and dividends
Subtract as a r eduction the total interest received from federal securities such as U.S. Treasury bonds, notes, bills, and savings bonds included in federal S corporation income. Do not include interest on federal refunds. See Iowa Administrative Code rules 701-302.2 and 701-502.5 .
Line 12: Nonconformity adjustments from IA 101
Certain current-year adjustments may be required because of Iowa's nonconformity with federal law in tax years 2018 and 2019. Enter any addition or reduction to income from the IA 101 Nonconformity Adjustments (42-029). Include the IA 101 with your return.
Line 13: Charitable contribution adjustment from
Iowa credit When an S corporation earns certain Iowa tax credits for making a charitable contribution, Iowa law prohibits a tax deduction related to that charitable contribution. Add as an a ddition any charitable contribution made by the S corporation and reported to its shareholders to the extent the charitable contribution relates to any of the following Iowa tax credits: the Iowa School Tuition Organization Tax Credit; the Iowa Charitable Conservation Contribution Tax Credit; the Endow Iowa Tax Credit; the Iowa Hoover Presidential Library Tax Credit; the Iowa Farm to Food Donation Tax Credit.
Line 14: All-source PTE modifications from Iowa
K-1s If the S corporation is also a member of another pass-through entity (PTE) such as a partnership, estate, or trust, report the S corporation's distributive share of all- source Iowa modifications furnished to the S corporation on its Iowa K -1. Report the Iowa modification as an Addition or a Reduction, as appropriate. Line 15: Other Report any other adjustment to net federal Schedule K income/loss required under Iowa law. A detailed schedule describing the type and amount must be included. Adjustments entered on this line may include, but are not limited to, the following: • A reduction for wages paid to new employees who qualify as persons with disabilities or as ex - offenders. Iowa Code section 422.35(3), (4); Iowa Administrative Code rule 701-502.11. • To the extent included in the S corporation's net federal schedule K income, subtract as a reduction the amount of a federal, state, or local grant provided to a communications service provider during the tax year, if the grant was used to install broadband service in targeted service areas at or above the download and upload speeds.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 9 • Adjustments to the S corporation's net federal Schedule K income/loss made by the Iowa Department of Revenue during an I owa pass - through audit, to the extent they are not accounted for elsewhere on the Schedule A. If more than one adjustment is required, report each adjustment separately. Do not include on line 15 any adjustment related to the individual Iowa capital gain deduction (see Iowa Administrative Code rule 701- 302.87). If you need to provide information to your shareholders about this individual shareholder-level adjustment, do so on a supplemental schedule with the Iowa Schedule K-1.
Schedule B - Iowa Tax Credits Reported to
Shareholders Enter on Schedule B all the Iowa tax credits earned or received by the S corporation in the current tax year that are being reported to the shareholders on the 2025 IA 1120S Schedules K-1. Do not include composite credits, PTET credits, or credits for prior payments. The total amount of each Iowa tax credit reported on Schedule B must equal the aggregate amounts reported to your shareholders on the IA Schedules K- 1, Part IV . Report tax credits earned by the S corporation separately from tax credits received by the S corporation from another pass -through entity. Include the tax credit certificate number if applicable. Use the following Iowa tax credit codes: • 03 Endow Iowa Tax Credit (include certificate number) • 05 Nonrefundable Historic Preservation Tax Credit (include certificate number) • 06 Housing Investment Tax Credit (include certificate number) • 07 Investment Tax Credit (include certificate number) • 08 New Jobs Tax Credit (include certificate number) (include IA 133 (41-133) with return) • 10 Renewable Energy Tax Credit (include certificate number) • 12 School Tuition Organization Tax Credit (include certificate number) • 14 Angel Investor Tax Credit FKA Venture Capital - Qualifying Business (include certificate number) (for amounts reported to taxpayers other than individuals, estates, or trusts) • 16 Wind Energy Production Tax Credit (include certificate number) • 17 Agricultural Assets Transfer Tax Credit (include certificate number) • 17 Beginning Farmer Tax Credit (include certificate number) • 20 Charitable Conservation Contribution Tax Credit (include federal form 8283 with return) • 21 Redevelopment Tax Credit (include certificate number) • 22 Solar Energy System Tax Credit (include certificate number) • 25 Innovation Fund Tax Credit (include certificate number) • 26 Farm to Food Donation Tax Credit (include IA 178 with return) • 27 Workforce Housing Investment Tax Credit (include certificate number) • 29 Hoover Presidential Library Tax Credit (include certificate number) • 30 Employer Child Care Tax Credit (include certificate number and IA 8882 (41-168) with return) • 31 MEGA Nonrefundable Investment Tax Credit (include certificate number) • 46 Nonrefundable Third Party Developer Tax Credit (include certificate number) • 47 Nonrefundable Third P arty Developer Tax Credit for racks, shelving, and conveyor equipment (include certificate number) • 52 Biodiesel Blended Fuel Tax Credit (include IA 8864 with return) • 55 E85 Gasoline Promotion Tax Credit (include IA 135 with return) • 56 Refundable Historic Preservation Tax Credit (include certificate number) • 58 Research Activities Tax Credit (include IA 128 or IA 128S with return) • 59 Supplemental Research Activities Tax Credit (include certificate number) (include IA 128 or IA 128S with return) • 62 Refundable Third Party Developer Tax Credit (include certificate number) • 65 E15 Plus Gasoline Promotion Tax Credit (Include IA 138 with return) • 67 Refundable Redevelopment Tax Credit (include certificate number) • 68 Angel Investor Tax Credit FKA Venture Capital - Qualifying Business (include certificate number) (for amounts reported to individuals, estates, or trusts) • 69 Renewable Chemical Production Tax Credit (include certificate number) • 71 MEGA Refundable Investment Tax Credit (include certificate number) • 75 BIG Program Investment Tax Credit (include certificate number)
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 10 • 76 Seed Investor Tax Credit (include certificate number) • 77 Sustainable Aviation Fuel Production Tax Credit (include certificate number) • 97 Refundable Third Party Developer Tax Credit for racks, shelving, and conveyor equipment (include certificate number) • 4136 Iowa Fuel Tax Credit (include IA 4136 with return)
Schedule C- Payments
Line 1(a): Enter the total amount applied to your 2025 Iowa S corporation tax from your previous IA 1120S Iowa Income Tax Return of S Corporation. Line 1(b)-(f): Enter the total amount of estimated or other voucher payments made for tax year 2025 prior to the original due date of the IA 1120S return. S corporations that owe more than $1,000 of net Iowa tax on built-in gains and passive investment income (line 37) or net Iowa PTET (line 40) are required to pay estimated tax. Estimated tax payments are not required for tax due pursuant to an election to pay on line 41. Visit GovConnect.Iowa.gov to make estimated or other payments or to print payment vouchers. Schedule E - Business Activity Ratio (BAR) Complete all applicable lines, even if 100% of the S corporation's business is conducted in Iowa. All figures are net of amounts reported on Iowa Schedule D. Business income means income which arises from the S corporation's trade or business, a part of which is conducted within Iowa. Business income must be apportioned to Iowa by means of the BAR. The BAR must be computed to the nearest tenthousandth of a percent . For example, 0.1234505 becomes 12.3451%.
Line 1a: Gross receipts from sale of tangible personal property - Include all gross receipts, after returns and allowances , from the sale of tangible personal property, as reported on the federal Form
1120S. See Iowa Administrative Code rule 701-503.5 for more information on sourcing receipts from the manufacture or sale of tangible personal property. Line 1b: Gross receipts from performance of services - Include all gross receipts , after returns and allowances, from the performance of services, as reported on the federal F orm 1120S. See Iowa Administrative Code rules 701-503.6(1), 701- 503.6(2), and 701-503.6(4) for more information on sourcing receipts from performance of services.
Line 1c: Gross receipts from railroad, trucking, aviation, or other transportation activities - Include all gross receipts, after returns and allowances, from the performance of railroad operations, transportations operations of an airline, truck and bus line companies, water transportations companies, freight care and equipment companies, and oil, gasoline, gas, or other pipeline operations, as reported on the federal Form
1120S. See Iowa Administrative Code rules 701- 503.7(1), 701- 503.7(2), and 701- 503.7(3) for more information on sourcing receipts from performance of transportation activities. Line 1d: Gross receipts from telecommunication services - Include all gross receipts , after returns and allowances, from telecommunication operations, as reported on the federal F orm 1120S . See Iowa Administrative Code rule 701-503.7(4) for more information on sourcing receipts from telecommunication services.
Line 1e: Gross receipts from radio and television broadcasts - Include all gross receipts, after returns and allowances , from radio and television broadcasting operations, as reported on the federal
F orm 1120S. See Iowa Code section 422.33(2)(a)(2)(e) and Iowa Administrative Code rule 701-503.7(5) for more information on sourcing receipts from broadcasting operations. Line 1f: Gross receipts from printed and electronic media - Include all gross receipts , after returns and allowances , from printed and electronic media, as reported on the federal F orm 1120S. See Iowa Administrative Code rule 701-503.7(6) for more information on sourcing receipts from printed and electronic media.
Line 1g: Gross receipts from utilities services -
Include all gross receipts , after returns and allowances, from utilities services, as reported on the federal Form 1120S. See Iowa Administrative Code rules 701-503.7(7) and 701 -503.7(8) for more information on sourcing receipts from utilities services.
Line 1h: Gross receipts from financial activities -
Include all gross receipts , after returns and allowances, as reported on the federal form 1120S from financial activities. See Iowa Administrative Code rule 701-503.6(3) for more information on sourcing receipts from financial activities.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 11
Line 10: Partnership gross receipts - When reporting gross receipts from another partnership, include a schedule detailing the partnership name, partnership FEIN, share of partnership Iowa receipts
(Column A), and share of partnership everywhere receipts (Column B) for each partnership reported on this line. Line 11: Other - Include a schedule detailing the type and amount of other income included on this line. Apportionment guidelines: For more information about allocation and apportionment of Iowa income, see Iowa Code section 422.33(2) and Iowa Administrative Code rule 701-chapter 503. Investment business income: All investment income that is business income, including capital gains or losses, must be included in the computation of the BAR if the investment income is derived from intangible property that has become an integral part of some business activity occurring regularly in or outside of Iowa. The investment income must be included in Column A (numerator) to the extent the intangible property which produced that income is an integral part of some business activity occurring regularly in Iowa. All other investment income that is business income may, at the taxpayer's election, be included in the computation of the BAR. On the return, the taxpayer elects whether to include in the BAR for that year and all subsequent years, investment income it has determined to be business income. If elected to be included, then for that year and for all subsequent years, total investment income that has been determined to be business income will be included in the numerator as follows (see Iowa Administrative Code rule 701-503.2(3) for clarification): • Accounts receivable interest is to be included in Column A (numerator) to the extent allocable to Iowa. • Capital and ordinary gains or losses, or rent and royalties from tangible property or real property must be included in Column A ( numerator) for property located in Iowa. • Other investment income including interest, dividends, capital and ordinary gains, and royalties from intangibles must be included in Column A (numerator) if the commercial domicile is in Iowa. For an S corporation first doing business in Iowa, the election to include or exclude eligible investment income determined to be business income in the BAR of that year's initial return is binding on all subsequent years' returns. The election to include or exclude business investment income in the BAR can later be changed only with permission of the Director of the Iowa Department of Revenue. See Iowa Administrative Code rule 701-503.2 for additional information about the election and the apportionment of investment income.
Part I: General Information
Corporation information Enter the name and Federal Employer Identification Number (FEIN) of the S corporation on each IA Schedule K-1. If this is an amended IA Schedule K -1, check the "Amended K-1" box. If the S corporation is amending for a federal centralized partnership audit change or an Iowa pass -through entity audit change and is electing to pay with an IA 103, do not issue amended Schedules K-1. Instead, the S corporation will need to send a letter to the shareholder as described on the instructions above for the IA 1120S, line 41. Shareholder Information • Enter name, Social Security Number (SSN), FEIN, or Individual Taxpayer Identification Number (ITIN), and address of shareholder. In the case of a disregarded entity, enter the applicable information of the beneficial owner.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 13 • Check either the resident shareholder or nonresident shareholder box. A nonresident shareholder includes any individual who is not a resident of Iowa, any estate or trust without a situs in Iowa, or any business entity without a commercial domicile in Iowa. Any shareholder whose state or residence, situs, or commercial domicile, as applicable, is not known by the S corporation shall be considered a nonresident shareholder. • Check the appropriate box for the shareholder 's entity type. • Enter shareholder's percentage of ownership in the S corporation. • Enter the shareholder's share of the S corporation's Iowa receipts reported on the IA 1120S, Schedule E, column A, line 12. • Enter the shareholder 's share of the S corporation's everywhere receipts reported on the IA 1120S, Schedule E, column B, line 12. • Enter the shareholder 's share of the S corporation's total nonbusiness income from Iowa Schedule D, line 17. • Enter the S corporation's BAR from the IA 1120S, Schedule E, line 13. • Answer yes or no to the question of whether the S corporation is including additional attachments with the K-1. • Answer yes or no to the question of whether the S corporation made a PTET election for the tax year. Part II: Shareholder's Pro Rata Share Items: Column (a) federal/all-source amounts: Enter the shareholder's pro rata share of the federal/all-source S corporation items from the corresponding lines of the IA 1 120S, Iowa Schedule K, column (a) . The allocation of shareholder items among shareholders should be consistent with the allocations made on the federal Schedules K-1. Alternative allocations of S corporation items among shareholders for Iowa tax purposes are not permitted. Column (b) amounts attributable to Iowa: On lines 1-17 of column (b) enter the shareholder's pro rata share of the Iowa apportioned amount from the corresponding lines of the IA 1120S, Iowa Schedule K, column (d). On line 18 of column (b), enter the shareholder's pro rata share of the Iowa allocated income from the IA 1120S, Iowa Schedule K, column (d), line 18. Provide a supplemental schedule to shareholders with the IA Schedule K-1 describing the type and amount of each Iowa modification or Iowa allocated income reported on lines 17 or 18, if any. Part III: Iowa Composite and PTET Credits: On line 1, enter the nonresident shareholder's share of the Iowa composite tax paid by the S corporation from the total reported on the IA 1120S , Iowa Schedule K, column (d), line 19. On line 2, enter the shareholder's share of the Iowa PTET credit from the total reported on the IA 1120S, Iowa Schedule K, column (d), line 20. PTET credits must be allocated to shareholders in the same ratio that the S corporation's taxable income is allocated to the shareholder. Part IV: Shareholder's portion of Iowa credits: Enter the shareholder's pro rata share of each Iowa tax credit included by the S corporation on the IA 1120S, Schedule B. For each tax credit claim , provide the tax credit code, tax credit certificate number (if applicable), and current year amount allocated to the shareholder . Tax credits must be allocated to shareholder s in the ratio of each shareholder's share of the earnings of the S corporation to the S corporation's total earnings, unless Iowa law explicitly provides for a different method of allocation. Franchise Tax Credit If you are a financial institution and the shareholder is eligible to claim the Franchise Tax Credit, you must include the following information on a separate supplemental schedule with the IA Schedule K -1 (63-009) to allow shareholders to complete an IA 147 Iowa Franchise Tax Credit (41-147): • The financial institution's total net income from IA 1120S, Part 4, line 21. • The financial institution's total franchise tax liability minus credit claims from IA 1120F, line 13. • The shareholder's ownership percentage. Information for shareholders on reporting the IA 1120S Schedule K-1 Any shareholder can have nexus with Iowa for income or franchise tax purposes and an Iowa tax return filing requirement by having an ownership interest in an S corporation doing business in Iowa. If the tax year of a shareholder is different than that of the S corporation , the distributive share of S corporation items is to be included on the shareholder's Iowa return for the tax year during which the tax year of the S corporation ends. Business-entity shareholders: Any shareholder that is a business entity (corporation, partnership, LLC, etc.) must use the appropriate amounts from the Iowa Schedule K-1 to complete their Iowa tax return.
2025 IA 1120S Iowa Income Tax Return of S Corporation Instructions, page 14 When reporting business income, the shareholder's all-source Iowa modifications from IA Schedule K -1, column (a), line 17 are reported on Schedule A of the IA 1065 (41-016), IA 1120 (42-001), IA 1120S (42- 004), or IA 1120F. The shareholder's share of the S corporation's Iowa Receipts and Receipts Everywhere from the IA Schedule K-1, Part I, are reported as part of the BAR calculation on the IA 1065, IA 1120, IA 1120S, or the IA Franchise Schedule 59F Apportionment of Income to Iowa of the IA 1120F. Individual shareholders: Resident and nonresident individual shareholders must report all S corporation income that is reportable on the shareholder 's federal individual income tax return when completing the IA 1040 Iowa Individual Income Tax Return. The shareholder's all-source Iowa modifications from IA Schedule K-1, column (a), line 17 are reported on the IA 1040, Schedule 1, line 3, to the extent they affect Iowa net income. In addition, nonresident or part - year resident individual shareholders report the IA Schedule K -1, column (b) amounts attributable to Iowa on Form IA 126 Iowa Nonresident and Part - Year Resident Credit (41-126). Report the Iowasource amount of each S corporation item on the appropriate line of the IA 126, to the extent it a ffects Iowa net income. Iowa modifications and Iowa allocated income from the IA Schedule K -1, column (b), lines 17 and 18 are reportable on the IA 126, line 12. Estate/trust shareholders: Resident and nonresident estate/trust shareholders must report all S corporation income that is reportable on the shareholder's federal income tax return when completing the IA 1041 Iowa Fiduciary Return Instructions (63- 001). The shareholder's all-source modifications from IA Schedule K-1, column (a), line 17 are reported on the IA 1041, Schedule A , Part I, line 4 (if positive) or Part II, line 6 (if negative). In addition, nonresident or part -year resident estates/trusts report the IA Schedule K-1, column (b) amounts attributable to Iowa on the IA 1041, Schedule C Computation of Nonresident/Part -year Resident Tax Credit. Report the Iowa-source amount of each S corporation item on the appropriate line of the IA 1041, Schedule C to the extent it affects Iowa taxable income. Iowa modifications and Iowa allocated income from the IA Schedule K -1, column (b), lines 17 and 18 are reportable on the IA 1041, Schedule C, Column B, line 18, to the extent they affect Iowa taxable income.
Source: official text