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Iowa DOR Extends Deadlines for Tax-Preferred Savings Accounts

Dated May 5, 2021

SUMMARY BY TAX ANALYSTS

The Iowa Department of Revenue announced that in light of a recent proclamation issued by the governor, it has extended the deadlines for taxpayers to make necessary administrative designations for first-time homebuyer savings accounts that were opened in 2020 and contributions to educational savings plans for the 2020 tax year, extending both deadlines to May 30; the deadline for filing state income taxes is June 1.

Release: Iowa extends additional deadlines

Iowa Extends Additional Deadlines: FTHSA & 529 Plan

Governor Reynolds signed a proclamation on April 30, 2021, that provides an extension to owners of First-Time Homebuyer Savings Accounts to make required account and beneficiary designations. The proclamation also extends the time that owners of Iowa Educational Savings (529) Plans may make contributions to their accounts that may be considered made in tax year 2020. The proclamation extends both deadlines to May 30, 2021. The due date for filing 2020 Iowa individual income tax returns remains June 1, 2021 under Order 2021-01 issued by Director Paulsen on March 29, 2021. Specifics of the extensions are below.

First-Time Homebuyer Savings Accounts

Eligible taxpayers who opened an interest-bearing savings account in calendar year 2020 and who wish to participate in the first-time homebuyer savings account program normally must complete and file an Account Holder and Designated Beneficiary Form 41-162, no later than April 30 in the next calendar year in order for the account to qualify as a first-time homebuyer savings account. However, on April 30, 2021, Governor Reynolds issued a public health disaster emergency proclamation extending the deadline for filing these forms for taxpayers who opened an account in 2020 to May 30, 2021. View additional information on account owner responsibilities related to First-Time Homebuyers Savings Account.

Iowa Educational Savings (529) Plan Contributions

Under normal circumstances taxpayers could elect to deduct qualifying contributions made to an Iowa Educational Savings (529) Plan between January 1, 2021, and April 30, 2021 (up to the contribution limit), on their 2020 Iowa income tax returns, rather than their 2021 returns. On April 30, 2021, Governor Reynolds issued a public health disaster emergency proclamation which, in part, extended the deadline to make such contributions and still deduct them on a 2020 return from April 30, 2021, to May 30, 2021. View additional information on the College Savings Iowa (529 Plan) Deduction.

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