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Iowa Department of Revenue addresses Wynne by issuing guidance on credits for taxes paid to other states

The Iowa Department of Revenue on Oct. 16 became the second state tax authority to directly respond to the U.S. Supreme Court’s decision in Comptroller of the Treasury v. Wynne following the Maryland Comptroller’s acquiescence to the case. The department’s guidance conforms to the Wynne decision and expands the application of the individual income tax credit that Iowa residents may take for taxes paid to other states. Under the department’s new practice, the credit may be taken against Iowa local income surtaxes in addition to Iowa state income tax. Furthermore, the credit now also includes income taxes paid to local jurisdictions in other states. Because the change is being applied on both a prospective and retroactive basis, Iowa residents may have income tax refund opportunities.

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