Iowa Fiduciary Tax Return Instructions 63-002

Fiduciary Tax Return Instructions 63-002
63-002 IA 1041 Instructions (Iowa Fiduciary Return Instructions)
2025 IA 1041 Instructions

FILE ELECTRONICALLY USING MODERNIZED e-FILE (MeF)

Iowa Fiduciary Return Instructions
revenue.iowa.gov

Carefully read all instructions when completing this return.
Recent Changes
Mandatory Electronic Filing
For tax years ending on or after December 31, 2023, Iowa fiduciary income taxpayers are required to
file their annual returns electronically if the taxpayer meets any of the following conditions for the tax
year:
• The taxpayer has at least $250,000 in gross receipts. “Gross receipts” means gross receipts or
sales from all business operations conducted within and without Iowa without any adjustment for
returns and allowances, and also includes receipts from all interest, dividends, rents, and royalties;
income from ordinary and capital gains; and the distributive share of income received by the
taxpayer from a partnership, S corporation, estate, or trust. Iowa Admin. Code r. 701—8.7(1).
• The taxpayer is claiming $25,000 or more in tax credits on the Iowa return for the year.
• The taxpayer is required to issue at least 10 schedule K-1s to its beneficiaries for the tax year.
All fiduciaries are encouraged to file electronically. If a fiduciary 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.
Alternative Minimum Tax
The Iowa Alternative Minimum Tax has been repealed for tax years beginning on or after January 1, 2023.
Line 8: A box has been added to report the amount of qualified retirement income included in the total
amount of other income reported.
Schedule A, Part I, line 3: For tax years beginning on or after January 1, 2024 the amount of federal
refunds are no longer required to be added back on Schedule A. This line has been changed to
“RESERVED FOR FUTURE USE.”
Schedule A, Part I, line 4 and Part II, line 6: There is no longer a separate Iowa net operating loss
(NOL) calculation. Taxpayers must add back federal NOLs incurred prior to January 1, 2023. Taxpayers
may apply NOLs carried forward from tax years beginning prior to January 1, 2023. Taxpayers must
include the new IA 124 to calculate their Iowa NOL carryforwards and federal NOL addbacks from tax
years beginning prior to January 1, 2023.
Schedule A, Part II, line 3: Taxpayers are not allowed to deduct the amount of Iowa refunds reported
on the federal 1041. This line has been changed to “RESERVED FOR FUTURE USE.”.
Schedule A, Part II, line 4: Taxpayers are no longer allowed to deduct the amount of federal taxes
paid for tax years beginning on or after January 1, 2024 on Schedule A. This line has been changed to
“RESERVED FOR FUTURE USE.”
Schedule A, Part II, line 5: Taxpayers are no longer allowed to deduct administrative expenses for tax
years beginning on or after January 1, 2024 on Schedule A. This line has been changed to “RESERVED
FOR FUTURE USE.
Line 35: The amount of the out of state tax credit is calculated on IA 130FID for tax years beginning on
or after January 1, 2024.
Line 41: Taxpayers claiming the Pass-Through Entity Tax (PTET) Credit should report the credit on
line 41. Include the IA Schedule CC with your return.
IA 130FID: This is a new form for tax years beginning on or after January 1, 2024 which is used to
calculate the amount of Out of State tax credit.
IA 1041 K-1, Part III, Line 3: A box has been added to report the beneficiary's share of qualified
retirement income included in the other information amount reported.
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2025 Iowa Fiduciary Instructions, page 2
Returns to File
An Iowa fiduciary return (IA 1041) must be filed for
estates, trusts, and other entities that are taxed as
trusts for federal income tax purposes.
An Iowa Composite Return (IA PTE-C) must be
filed if the estate or trust has any nonresident
beneficiaries.
Additionally, an Iowa individual income tax return
(IA 1040) must be filed for the following:
● The decedent, if the income during the tax
period ending with the date of death meets the
Iowa resident or nonresident filing requirements.
This return must be prepared with the same
method of accounting last used by the decedent.
● Wards in guardianships or conservatorships.
● Resident and nonresident beneficiaries of
estates or trusts, if the minimum filing
requirements are met.
For more information, see Iowa Administrative
Code rule 701—700.4.
Required Documents to File with the IA 1041
Iowa Fiduciary Return
● All pages of the IA 1041, including schedules,
and all completed IA 1041 K-1s.
● A copy of the federal form 1041 return, including
all schedules and K-1s for each beneficiary.
● A copy of the decedent’s will must accompany
the initial fiduciary return if the Department has
not previously received a copy for inheritance
tax purposes.
● A copy of inter vivos trust instruments must be
filed with the initial return for the trust.
● If the will has been filed in Iowa probate
proceedings, then this instrument is not required to
be filed with the initial return of testamentary trusts.
● If the probate inventory has not been filed in
Iowa probate proceedings at the time the initial
fiduciary return is filed, a statement should
accompany the return advising when the
inventory will be filed.
● A probate inventory for a foreign estate should
be filed with the return if an ancillary
administration has not been opened in Iowa.
● A copy of the Iowa Composite Credits Schedule,
IA Schedule CC, if a composite or PTET credit
was claimed.
Amended Return
If an amended federal return was filed, the
taxpayer must file an amended Iowa return and
include the IA 102. Use the IA 1041 to file and
check the “Amended Return” box. If the fiduciary
return was required to file its original return

electronically, the fiduciary’s amended Iowa return
for the same tax year must be filed electronically.
Rounding off to Whole Dollars: You can round
off cents to whole dollars on your return and
schedules. If you do round to whole dollars, you
must round all amounts. To round, drop amounts
under 50 cents and increase amounts from 50 to
99 cents to the next dollar. For example, $1.39
becomes $1 and $2.50 becomes $3. If you have to
add two or more amounts to figure the amount to
enter on a line, include cents when adding the
amounts and round off only the total.
Preparer PTIN
Enter the preparer’s Preparer Tax Identification
Number (PTIN). If the preparer does not have a
PTIN, enter the preparer’s Social Security Number
(SSN) or Federal Employer Identification Number
(FEIN).
When to File
The return with payment is due within four calendar
months after the end of the tax year. A fiduciary
return must be filed for every accounting period in
which there is taxable income of $600 or more and
for the final accounting period regardless of
income. The accounting period used must be the
same period that was adopted for federal income
tax purposes.
For Example: A trust administrator chooses a
calendar year end, for a trust, for federal income
tax purposes, meaning the year-end of the trust
accounting period is December 31st. The tax
return for the trust is due the last day of the fourth
month after the end of the tax year, April 30th.
All income from the probate property owned by the
decedent must be reported until the property is
sold or distributed, or disposition of the property is
made. Income derived from probate property
should also be reported if the income is deposited
in an estate bank account and expenses relating to
the probate property are paid from estate funds
and controlled by the fiduciary. The income derived
from non-probate property must be reported on the
beneficiaries’ individual income tax return.
How and Where to File
The Iowa Department of Revenue accepts Iowa
Fiduciary Tax Returns (IA 1041) through
Modernized e-File (MeF). The Department also
accepts Fiduciary returns submitted by mail.
Mail paper returns to:
Fiduciary Return Processing
Iowa Department of Revenue
PO Box 10467
Des Moines, Iowa 50306-0467
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2025 Iowa Fiduciary Instructions, page 3
Mandatory Electronic Filing
For tax years ending on or after December 31,
2023, Iowa fiduciary income taxpayers are
required to file their annual returns electronically if
the taxpayer meets any of the following conditions
for the tax year:
● The taxpayer has at least $250,000 in gross
receipts. Gross receipts means gross receipts or
sales from all business operations conducted
within and without Iowa without any adjustment
for returns and allowances, and also includes
receipts from all interest, dividends, rents, and
royalties; income from ordinary and capital
gains; and the distributive share of income
received by the taxpayer from a partnership, S
corporation, estate, or trust.
● The taxpayer is claiming $25,000 or more in tax
credits on the Iowa return for the year.
● The taxpayer is required to issue at least 10
schedules K-1 to its beneficiaries for the tax year.
All fiduciaries are encouraged to file electronically.
If a fiduciary 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.
Refund Claims and Federal Tax Changes
Claims for refund must be made within a certain
period of time. The Department has additional time
to make a determination of the correct tax following
a federal amended return or federal audit, and that
additional time is unlimited if the taxpayer does not
provide sufficient notice of the federal changes to
the Department. For more information regarding
refund claims and federal tax changes, see the
instructions to the IA 102 Amended Return
Schedule.
State Pass-Through Representative
If the estate or trust desires to appoint someone
other than the fiduciary as the state pass-through
representative for purposes of Iowa Code section
422.25B, a statement should be included with the
return indicating who is appointed as state passthrough representative as well as their contact
information.
Distributions
A distribution of property-in-kind to a beneficiary
entitled to the income made after June 1, 1984, in
taxable years ending after that date is subject to an
election by the fiduciary to recognize any gain or
loss in the estate or trust. The election is an
affirmative act and failure to indicate whether or not
the election is made will be construed as an

election by the fiduciary not to recognize any gain
or loss on the distribution.
The election applies to all distributions made
during the taxable year.
Return Instructions
The following instructions are for completing the
Iowa fiduciary return. Detailed instructions are
provided for lines requiring special attention.
Conformity with Internal Revenue Code
Iowa generally conforms with federal tax changes,
to the extent they affect Iowa income taxes, for tax
years beginning on or after January 1, 2020, but
certain Iowa nonconformity adjustments may be
necessary. Modifications to federal taxable income
are reported on Schedule A.
Return Information
Tax Period
The IA 1041 applies to a single tax year of no more
than twelve months. Unless indicated on the form, the
IA 1041 is assumed to apply to the calendar year
indicated at the top of the form. If the return is for a
fiscal year, enter the beginning and ending dates.
Return Type
Check the appropriate boxes to indicate whether
this is an initial, final, amended, or short period
return. Indicate if you are making a section 645
election. You may need to check more than one
box. Note: If a tax certificate of acquittance is
requested the final return box must be checked
and the face of the return must indicate that a tax
certificate of acquittance is requested.
Tax Certificate of Acquittance
The following minimum requirements must be met
in order to be eligible to receive an income tax
certificate of acquittance:
● The “Final Return” box must be marked.
● The box must be marked “Yes” for the Tax
Certificate of Acquittance request. If the “No”
box is checked, you must refile the return with
“Yes” marked in order to correct the error and to
be eligible to receive a Tax Certificate of
Acquittance.
● Iowa taxable income, on IA 1041, line 25 must
be zero.
The Tax Certificate of Acquittance will be mailed to
the fiduciary reported on the return. A carbon copy
will be mailed to the Power of Attorney, if one is
reported. A Tax Certificate of Acquittance will not
be mailed to a Designee reported under the
‘Designation for Tax Disclosure’ section.
The Department will not issue a Tax Certificate of
Acquittance for a grantor trust under any
circumstances.
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2025 Iowa Fiduciary Instructions, page 4
Furthermore, on a final return for an estate the
appropriate box must be checked to indicate
whether or not an Iowa Inheritance Tax Return, IA
706, will be filed.
Residency and Trust Situs
For estates and testamentary trusts: Indicate the
decedent’s residence at time of death. For inter
vivos trusts: If the trust is created by court order or
makes an accounting to the court, indicate the situs
based on the court having jurisdiction over the
trust.
If the trust is a grantor trust, indicate the grantor’s
or owner’s residence. If the trust, other than a
grantor trust, is not required to make an accounting
to and is not subject to control of a court, its situs
depends on the relevant facts of the case
including:
● The residence of the trustees
● The location of the principal office where the
trust is administered
● The location of the evidence of intangible assets
of the trust
For more information about determining the situs
of a trust, see Iowa Administrative Code rule 701—
700.3.
Composite Return Requirement
For tax years beginning on or after January 1,
2022, trusts and estates with nonresident
beneficiaries are required to complete and file an
IA PTE-C and pay composite tax on behalf of their
nonresident beneficiaries. Answer questions 1-4
on the IA 1041, page 2 to determine if you have a
composite return requirement. If you answer “Yes”
to any of questions 1-4, the estate or trust has a
nonresident beneficiary and must file an IA PTE-C.
If you answer “No” to all of questions 1-4, you are
not required to file an IA PTE-C. See the IA PTE-C
for more information about the Iowa composite
return requirement.
If you answer “Yes” to question 5, you may claim
your composite credit against any fiduciary income
tax owed on the IA 1041, or against any composite
tax owed on your IA PTE-C if you are required to
file an IA PTE-C. To claim a composite credit on
the IA 1041, line 41, complete the IA Schedule CC
and include it with this return. See the IA PTE-C for
information about how to claim a composite credit
against Iowa composite tax.
Third Party Authorization
Income tax certificates of acquittance, will be
mailed to the fiduciary and Power of Attorney
(POA) reported on the IA 1041.

More information about the Department's ThirdParty Authorization procedure is available at
(revenue.iowa.gov)
in
the
Confidentiality,
Disclosure, and Authorized Representation
section.
Lines 1-18: Income and Deductions.
The amounts entered on lines one through
eighteen should mirror the information shown on
your federal return. Any modifications should be
reported on line 19.
If an amount was reported on line 8, indicate the
amount of retirement income reported on line 8 in
the space provided.
Line 19: Iowa Net Modification from Schedule
A, Part II, line 8. See Schedule A instructions.
Line 21: Iowa Income Distribution Deduction
from Schedule B, line 15. See Schedule B
instructions.
Line 22: Qualified Business Income Deduction.
Report the same amount of qualified business
income deduction as reported for federal purposes.
Line 25: Iowa taxable income.
On a final return taxable income must be zero.
Line 26: Tax
Tax Rate
For tax year 2025, Iowa will have a single tax rate
of 3.8%
Example on how to compute tax: The taxable
income from line 25 is $24,000.
The calculation = $24,000 x 3.8% (.038)= $912.
Line 28: Iowa Lump-Sum Tax.
If federal form 4972 was used to compute federal
tax on all or part of a lump-sum distribution, enter
25% of the separate federal tax imposed. A copy
of federal form 4972 must be included.
Line 30: Tax on the ESBT Portion of the Trust
from Schedule E, line 5.
See Schedule E instructions.
Line 32: Personal Exemption Credit.
A $40 exemption credit is allowed on all fiduciary
returns regardless of whether the return covers less
than a full tax year. This is a nonrefundable credit
Lines 33 and 35: Nonresident Tax Credit or Outof-State Tax Credit.
Iowa estates and trusts that have income from nonIowa sources must report this income to Iowa for
taxation. If income tax has been paid on the nonIowa income to another jurisdiction, a credit for the
tax paid will be allowed and computed on the IA
130FID. The IA 130FID is a new form for tax years
beginning on or after January 1, 2024 which is
used to calculate the amount of Out-of-State tax
credit. Nonresident estates and trusts are not
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2025 Iowa Fiduciary Instructions, page 5
eligible for the Out-of-State tax credit. Estates and
trusts with income from an electing small business
trust (ESBT) see instructions below.
Line 37: Other Nonrefundable Credits.
Do not include any amounts that are allocated to a
beneficiary. Generally, these credits are
apportioned on the basis of the income allocable to
the estate or trust and the beneficiaries. Enter the
Part I Total of the IA 148 Tax Credits Schedule.
The amount claimed on line 37 must be limited not
to exceed the amount of tax on line 31, minus the
personal exemption credit on line 32 and the
Nonresident or Out-of-State credits on lines 33 and
35. The IA 148 Tax Credits Schedule must be
included.
Line 39: Income Tax Withheld.
Enter the total amount of income tax withheld for
Iowa from your W-2s and 1099s. This will be the
figure shown in the box labeled “State income tax.”
Also enter the total amount of Iowa withholding
identified on all K-1s. Reduce the total withholding
reported by the amount of withholding passed
through to beneficiaries and reported on the IA
1041 K-1, Part III, line 1.
Line 40: Estimated and other payments made
for tax year 2025.
Enter the total amount of 2024 Iowa estimated tax
payments. This includes any fourth quarter
payment made in January 2025.
Make sure the estimated payments claimed on
the return match what was paid. The fiduciary
who is identified with the payment, based on the
name and identification number on the electronic
payment/voucher, or an authorized third-party
representative can call the Department to verify
the payments on file. See the Department’s
website for more information regarding third-party
authorization. Taxpayers with a GovConnectIowa
account can check their estimated payments at
govconnect.iowa.gov prior to filing their fiduciary
tax return.
Amended returns only: Enter all payments
made towards the 2024 Iowa fiduciary tax return,
including amounts paid on prior 2024 Iowa
fiduciary tax returns.
Note: Any late payments may affect the actual
calculation of penalty and interest.
Line 41: Composite return and PTET credit.
Enter any Iowa Composite and PTET Credits as
reported on IA Schedule CC. You must include IA
Schedule CC.
Line 42: Motor Fuel Tax Credit. A credit may be
claimed for Iowa motor vehicle fuel tax paid on fuel

used off-highway in an unlicensed vehicle. If the
ordinary income during the accounting period is
completely or partially accumulated and tax is the
obligation of the fiduciary, the credit is claimed on
line 42. If the ordinary income is fully distributed,
the credit cannot be claimed on the fiduciary return.
Instead, the beneficiaries are entitled to claim their
pro rata share of the credit on their individual
income tax returns. The fiduciary must provide
each beneficiary with an IA 4136 Motor Fuel Tax
Credit form and a supplemental schedule showing
the distribution of credit among the beneficiaries,
allowing the beneficiary to claim the credit.
Line 46b: AMENDED RETURNS ONLY.
Enter the amount of overpayments received or
processed on previous returns for the same tax
period. Include refunds and amounts from previous
overpayments setoff to other government debt.
Line 46c: Refund.
If line 46b is greater than line 46a, include the
difference on line 48; including if line 46a is now
zero. For line 47, penalty should not be calculated
on this amount of excess refund, but interest
should be calculated on it from either the date of
the refund or the due date of the tax return,
whichever is later.
If you want to have your refund issued to you as a
paper check, enter the refund amount on line 46c
and leave lines 46d, 46e, and 46f blank. The check
will be issued to the address listed on your return.
If you would like your refund directly deposited
proceed to lines 46d, 46e, and 46f.

Note: The routing and account numbers may be in
different places on your check.
Direct deposit of a refund: Do not input your
account and routing information in rows “d” and “e”
if you have an amount due on line 48.
46d. Input your financial institution’s routing
number. The routing number for a checking
account must be nine digits. See sample above for
routing number example, or contact your financial
institution if you are unsure.
46e. Input your account number. The account
number for a checking account may have up to 17
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2025 Iowa Fiduciary Instructions, page 6
digits. See the sample above for an account
number example, or contact your financial
institution if you are unsure. For savings accounts
you may need to contact your financial institution
to obtain the account number. The entire refund
amount will be deposited into this one account.
46f. Check either checking or savings to indicate
what type of account the refund will be deposited
into.
Note: The account the refund will be issued to
must be located in the United States. Verify that the
routing and account numbers are correct to avoid
a delay in your refund. Any error will result in a
paper refund. Do not request a deposit of your
refund to an account that is not in your name, such
as your tax return preparer’s account. Although
you may owe your tax return preparer a fee for
preparing your return, do not have any part of your
refund deposited into the preparer’s account to pay
the fee.
Line 47: Penalty and interest.
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 47a
‘Penalty’. 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 47a ‘Penalty’.
Note: If 90% of the correct amount due is paid by
the original due date of the return, then no penalty
will be assessed provided that the return is filed
within six months of the due date. Any tax elections
made on the return will be considered timely if the
return is filed no later than six months from the
original due date. If additional payment is
necessary in order to meet the 90% requirement,
you must pay using the Iowa Tax Payment
Voucher (96-048), available to print at
GovConnectIowa. Find the link and additional
information at revenue.iowa.gov.
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 47a
‘Penalty’. 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 47a ‘Penalty’.

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.
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.
Line 48: Amount Due
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.
However, if you are amending to report a federal
centralized partnership audit change and you have
elected to pay the tax due on the owners’ behalf,
you must complete the IA 103, include the amount
due from the IA 103 on this line, and then submit
the IA 103 with payment to the address listed on
the IA 103.
Schedule A: Iowa Modifications
Additions:
Line 1: Interest from foreign securities and
state municipal securities
Add interest from foreign securities and state and
municipal securities to the extent that interest was
exempt from federal tax. However, interest from
certain Iowa state and municipal securities is
exempt from Iowa tax and should not be included
on this line. For more information, see Iowa Code
section 422.7(2); Iowa Administrative Code rules
701—302.3, 700.8(7)“e”.
Line 2: Dividends not included in federal
income
Add dividends not included in federal income,
including dividends from foreign securities and
state and municipal securities to the extent those
dividends were exempt from federal tax. However,
dividends from certain Iowa state and municipal
securities are exempt from Iowa tax and should not
be included on this line. For more information, see
Iowa Code section 422.7(2); Iowa Administrative
Code rule 701—302.3.
Line 4: Other income
Enter other additions to income on this line, and
state the nature of the income. List the type and
amount on an included schedule. Items included
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2025 Iowa Fiduciary Instructions, page 7
on this line include but are not limited to all of the
following:
● Other income reported on the estate’s or trust’s
federal form 1041, line 8.
● Depreciation adjustment from the IA 4562A and
the IA 4562B. Include both schedules with the
return.
● Nonconformity adjustments from the IA 101.
Include the form with the return. If the estate or
trust is also a member of another pass-through
entity, enter the estate’s or trust’s distributive
share of Iowa modifications furnished by the
pass-through entity if the modifications result in
a positive amount. This is the amount reported
on your IA 1065 K-1, line 19, or on your IA
1120S K-1, line 16.
● If the estate or trust is also a member of another
pass-through entity, enter the estate’s or trust’s
distributive share of Iowa modifications
furnished by the pass-through entity if the
modifications result in a positive amount. This is
the amount reported on your IA 1065 K-1, line
18(a), or on your IA 1120S K-1, line 16(a).
● Any adjustment from IA 163 Interest Expense
Adjustment resulting in an addition to income.
Include IA 163 with your return.
● Report the amount of federal net operating loss
included on IA 1041, line 16.
● Federal net operating loss carryforward incurred
prior to January 1, 2023 from IA 124, Part I, line 3.
● Other income required under Iowa law.
Subtractions:
Line 1: Taxable interest income received from
federal obligation
Subtract interest received from federal securities.
For more information, see Iowa Code section
422.7(1); Iowa Administrative Code rule 701—
302.2, 700.8(7)”e”.
Line 2: Dividend income received from federal
obligations
Subtract dividends received from federal
securities. For more information, see Iowa Code
section 422.7(1); Iowa Administrative Code rule
701—302.2.
Line 6: Other deductions
Enter other deductions to income on this line, and
state the nature of the deduction. List the type and
amount on an included schedule. Items included
on this line include but are not limited to all of the
following:
● Depreciation adjustment from the IA 4562A and
the IA 4562B. Include both schedules with the
return.

● For burial trust funds, described in Iowa Code

section 523A.102, subtract interest and
earnings received to the extent included in
income.
● Nonconformity adjustments from the IA 101.
Include the form with the return. If the estate or
trust is also a member of another pass-through
entity, enter the estate’s or trust’s distributive
share of Iowa modifications furnished by the
pass-through entity if the modifications result in
a negative amount. This is the amount reported
on your IA 1065 K-1, line 19, or on your IA
1120S K-1, line 16.
● Any adjustment from IA 163 Interest Expense
Adjustment resulting in a reduction to income.
Include IA 163 with your return.
● Iowa net operating loss carryforward incurred prior
to January 1, 2023 from IA 124, Part II, line 5.
● Other deductions allowed under Iowa law.
Schedule B: Iowa Distributable Net Income
The income distribution deduction allowable to
estates and trusts for amounts paid, credited, or
required to be distributed to beneficiaries is limited
to Iowa Distributable Net Income (DNI). This
amount, which is figured on line 7, is also used to
determine how much of an amount paid, credited,
or required to be distributed to a beneficiary will be
includible in his or her gross income
Schedule C: Computation of Nonresident/PartYear Resident Tax Credit
Complete this form if the trust or estate has
Iowa source income and the situs of the trust
or estate is outside of Iowa for the full year or
for part of the year.
Nonresident Instructions: A full-year nonresident
trust or estate should list all-source income and
deductions from page 4 of the return in Column A,
and list all Iowa source income and deductions in
Column B of IA 1041 Schedule C.
Part-year instructions: A part-year nonresident
trust or estate should list all-source income and
deductions from page 4 of the return in Column A,
and list all source income and deductions received
or paid while maintaining situs in Iowa plus any
Iowa-source income received while a nonresident
in Column B of IA 1041 Schedule C.
Iowa-source income: Iowa source income
reportable in Column B of IA 1041 Schedule C
includes, but is not limited to, income from an Iowa
business, farm, or other real estate; and wages,
fees, or commissions earned in Iowa. Income from
bank accounts, stocks, bonds, or other intangible
personal property is assigned to Iowa only to the
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2025 Iowa Fiduciary Instructions, page 8
extent that it is from a business, trade, or
profession carried on within Iowa.
Schedule E: Electing Small Business Trust Tax
Computation (ESBT)
Line 1: Enter total federal adjusted ESBT income
as determined on the separate schedule prepared
for the federal estate and trust income tax return.
Include the federal schedule with the Iowa tax
return.
Line 2: Enter total Iowa additions to ESBT income.
Common additions can be located in the IA 1041,
Schedule A, Part I instructions. If the ESBT
received Iowa Schedules K-1, include the amounts
from Part II, line 16, on this line if the net
modification is positive. Include a statement that
separately lists the additions.
Line 3: Enter total Iowa deductions to ESBT
income. Common deductions can be located in the
IA 1041, Schedule A, Part II instructions. If the
ESBT received Iowa Schedules K-1, include on
this line the amounts from Part II, line 16, on this
line if the net modification is negative. Include a
statement that separately lists the deductions.
Line 5a: Calculate the tax using the tax rate
schedule. See line 26 instructions.
Line 5b: On a separate worksheet, calculate the
amount of non-refundable credits allowed which
are related to the ESBT portion of the income only.
Create and include a statement showing the
calculation. Do not report these credits in IA 1041
lines 33, 35, and 37.
Line 5c: Subtract line 5b from line 5a and report
this amount on line 5c. This amount cannot be
negative. Residents also enter this amount on IA
1041, line 30. Nonresidents and part-year
residents continue to line 6
ESBT Refundable Tax Credits: Report the
amount of any refundable tax credits on IA 1041
lines 39-43, if applicable, include Iowa Schedule
CC or IA 148.
Line 6: Report amount of Iowa source income after
any related modifications reported on lines 2 and 3.
Iowa 1041 Schedule K-1
Instructions for preparing the IA 1041
Schedule K-1
IA Schedule K-1 shows each beneficiary’s share
of Iowa source income, Iowa modifications, Iowa
tax credits, and other important information.
Complete information for each beneficiary in an
acceptable format must be provided. The IA 1041
and IA Schedule K-1 are provided on our website.

General Information
Estate or Trust information
Enter the name and Federal Employer
Identification Number (FEIN) of the estate or trust
on each IA Schedule K-1. If this is an amended
IA Schedule K-1, check the “Amended K-1” box.
If this is a final IA Schedule K-1, check the “Final
K-1” box.
Beneficiary Information
● Enter the beneficiary’s name, Social Security
Number (SSN) or FEIN, and address In the
case of a disregarded entity, enter the
applicable information of the beneficial owner.
● Check either the resident beneficiary or
nonresident beneficiary box. A nonresident
beneficiary includes any individual who is not
a resident of Iowa, any estate or trust without
a situs in Iowa, or any business entity
(corporation, partnership, LLC, other) without
a commercial domicile in Iowa. Any
beneficiary whose state or residence, situs, or
commercial domicile, as applicable, is not
known by the partnership shall be considered
a nonresident beneficiary.
● Enter beneficiary’s percentage of ownership in
the trust or estate.
● Check the appropriate box for the estate or
trust entity type.
● Check the appropriate box for the beneficiary
type.
Part I: Iowa Adjustments.
Enter the beneficiary’s pro rata share of Iowa
adjustments from IA 1041, Schedule A, Part II, line 8.
Part II: Nonresident beneficiary share of Iowa
source distributable net income
Complete Part II only if the beneficiary is a
nonresident beneficiary. On lines 1-8, enter the
beneficiary’s pro rata share of the Iowa sourced
income amount reported on IA 1041 lines 1-8. On
line 9 enter the beneficiary’s share of the Iowa
source modifications reported on Schedule A.
Example: Simple trust A has the following sources
of income:
Interest from US EE savings bond interest: $5,000
Iowa farm income: $20,000
The trust also reports the following subtractions on
Schedule A, Part II:
Line 1 - Taxable interest received from federal
obligations: $5,000
Line 6 - Depreciation adjustment from form IA
4562A: $4,500
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2025 Iowa Fiduciary Instructions, page 9
The trust has two beneficiaries which share in the
income equally. Beneficiary A is a resident of the
state of Iowa, beneficiary B is a non-resident of Iowa.
The IA 1041 K-1s would report the following
amounts for the beneficiaries:
Part I - Both beneficiaries would report 50% of the
modifications reported on Schedule A of ($4,750)
((-$5,000-$4,500)* 50% interest)
Part II - The K-1 for beneficiary A would leave Part
II blank, this section is only to be completed for
non-resident beneficiaries,
The K-1 for beneficiary B would report 2 items:
Line 6 would report the beneficiary’s share of Iowa
farm income: $10,000 ($20,000 farm income/loss
from line 6 of IA 1041 * 50%).
Line 9 would report the beneficiary’s share of the
modification reported on Schedule A from Iowa
sources. In this example, only the depreciation
adjustment related to the farming operation is Iowa
source income. Line 9 would report (2,250)
(-$4,500 * 50%).
Part III: Supplemental Information
● Enter the beneficiary’s pro rata share of Iowa
income tax withheld and passed through to the
beneficiary by the estate or trust. Reduce the
total withholding reported on IA 1041, line 39 by
the amount of withholding passed through to
beneficiaries reported on this line.
● Enter the beneficiary’s pro rata share of each
Iowa tax credit included by the trust or estate on
the IA 1041, lines 37 and 43. For each tax credit
claim provide the tax credit code, tax credit
certificate number (if applicable), and current
year amount allocated to the beneficiary. Tax
credits must be allocated to beneficiaries in the
ratio of each beneficiary’s share of the earnings
of the trust or estate to the trust or estate’s total
earnings, unless Iowa law explicitly provides for
a different method of allocation.
● If an amount was reported on line 3, include the
amount of retirement income reported on line 3
in the space provided.
Part IV: Composite Information
Enter the nonresident beneficiary’s share of the
Iowa composite tax paid by the trust or estate as
listed on the trust or estate’s IA PTE-C,
Nonresident Member Schedule, column I.
Note: The PTET credit claimed by a trust or estate
cannot be allocated to a beneficiary.

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