The deadline for filing Iowa tax returns is three weeks away (Monday, May 2) and we still don’t know for sure what the Section 179 and bonus depreciation rules for 2010 tax returns are. As of right now, Iowa has a Section 179 limit of $134,000, and does not recognize bonus depreciation at all. This past week, the Iowa House and Senate passed a bill that would have coupled with federal Section 179 rules for 2010, allowing up to $500,000 of expensing. But Governor Branstad has yet to sign the bill, and has said he’ll likely veto it.
The political wrangling over this issue isn’t a huge issue for businesses that placed less than $134,000 of assets into service in 2010. But for businesses that placed more than $134,000 of assets into service, it is hard to complete the Iowa tax return without knowing what the Section 179 rules are.
UPDATE: The Section 179 limit in Iowa for 2010 and 2011 is $500,000, same as for federal returns. Click here for more information.