Interpreting an Iowa Form 8453 (The E-filing Authorization Form)

At least once a year, a client who actually bothers to look at what I give them to sign will ask a question about the Iowa Form 8453 (technical name: IA 8453-IND). This is the form a tax pro must get the client to sign, to authorize the tax pro to e-file the taxpayer’s Iowa return. If you just look at the numbers on the form and try to do math using those numbers, you’ll never get the bottom line refund or amount owed to match the return. Let’s examine.

To interpret the Form 8453, we need to start with the Iowa Form 1040. Let’s take a single person with $40,000 of income. Let’s say they received a $1,000 federal refund the prior year, and had $4,000 withheld from their pay for federal taxes. This is what the bottom of page 1 of this person’s Iowa tax return looks like:

Then we go on to the second page of the Iowa 1040:

What page 2 is saying is: the taxpayer’s tax liability is $1,593, then they get a $40 personal credit, leaving the final tax liability at $1,553. They had $2,000 of Iowa taxes withheld, producing a refund of $447.

Now let’s look at the Form 8453 and we’ll see  how it’s hard to tie out the numbers on the 8453 with the tax return:

Specifically, what people will ask about is the fact that total tax on line 2 minus the withholding on line 3 DOES NOT equal the refund on line 4. In this example, $1,593 – $2,000 = $407, not $447. The reason is, the personal credit of $40 is not included on the Form 8453. Why not? I don’t know, I didn’t design the form!