A dwindling number of Iowa taxpayers submit paper income tax returns to the State of Iowa. Victoria Daniels of the Iowa Department of Revenue has preliminary results for all but the last three days of the tax season, which ended April 30 for Iowa income taxpayers.
“E-filing is up about 4.1 percent and approximately 91 percent of Iowans, to date, have filed electronically,” Daniels says.
The final report on 2013 state income tax collections can’t be written until those who did not meet the April 30 deadline and filed for an extension submit their income tax returns this fall. Daniels says filing electronically cuts down on errors.
“Your electronic filing software is programmed to recognize and look for certain things and if you enter something that’s not correct, it will stop you and won’t let you go any farther,” Daniels says. “You don’t have anything to stop you when you’re filling out a paper return.”
The state tax agency’s more recent report tracked returns through the close of business on April 25, the final Friday of tax-filing season in Iowa.
“As far as individual income tax returns received, we had received 1,442,221 in 2014,” Daniels says. “Now that had increased about 1.6 percent from the same time period of 2013, but in 2013 at this time we still had quite a few paper returns that hadn’t been worked yet.”
The average income tax refund is nearly $590. That’s about 13 percent higher this year compared to the average refund a year ago. Daniels says one reason for the increase is likely the Taxpayers Trust Fund tax credit.
“If you have a tax liability, you’re able to use that and take advantage of that $54 per person, so that’s not refundable, but it could be used toward any tax liability that you had,” Daniels says. “The second factor, as you may recall during the 2013 legislative session there was an increase in the Earned Income Tax Credit which is a refundable tax credit. That increased from seven percent of the federal credit to 14 percent of the federal credit and so that could play some role in the amount of the refund being higher this year.”
Iowans who filed for an extension still had to pay at least 90 percent of what they owed by April 30 or they’ll face a tax penalty.