Iowa largely conforms to the federal rules for medical expense deductions—but with important state-specific twists. Understanding the Iowa rules can help you determine what you can deduct on your Iowa return and what expenses may not qualify. Here’s an in-depth look at the key differences and guidelines for Iowa taxpayers in 2025.
1. Iowa’s Deduction Threshold
Unlike the federal standard threshold of 7.5% of AGI, Iowa requires that unreimbursed medical and dental expenses exceed 10% of your Iowa-modified AGI before they become deductible. This more restrictive threshold means fewer expenses will qualify under state law :contentReference[oaicite:1]{index=1}.
2. Which Medical Expenses Qualify?
Iowa recognizes the same medical expenses as deductible under the federal definition, including:
- Doctor, dentist, specialist, and hospital fees
- Prescription medicines and insulin
- Vision care, hearing aids, and durable medical equipment
- Long-term care and certain insurance premiums
- Transportation costs—mileage, parking, and tolls to receive medical care
Only unreimbursed and post‑tax-paid expenses are included :contentReference[oaicite:2]{index=2}.
3. Health Insurance Premium Deduction for Seniors
Iowa offers an additional premium deduction for seniors:
- If you are **65 or older** and your Iowa taxable income is **under $100,000**, you can deduct 100% of qualifying health and dental insurance premiums paid with post‑tax funds :contentReference[oaicite:3]{index=3}.
- This includes Medicare B/D premiums and long-term nursing home coverage :contentReference[oaicite:4]{index=4}.
4. Iowa AGI vs. Federal AGI
Iowa starts with your federal AGI, modifies it for state-specific items like depreciation differences or non‑conforming income, and then applies the 10% threshold :contentReference[oaicite:5]{index=5}. Your deductible amount is the excess of qualifying expenses over this threshold.
5. Avoiding Double-Dipping
You can’t deduct the same premiums both as a standard medical expense and a separate adjustment. If you take the premium deduction on the main IA-1040 form, those premiums cannot be included in Schedule A :contentReference[oaicite:6]{index=6}.
6. Reporting on Iowa Forms
To claim medical deductions:
- Enter medical/dental expenses on **Schedule A, Line 1:** subtract 10% of Iowa-modified AGI from total unreimbursed expenses :contentReference[oaicite:7]{index=7}.
- If eligible as a senior, deduct health insurance premiums on **IA 1040, Schedule 1, Line 15** :contentReference[oaicite:8]{index=8}.
7. Documentation and Recordkeeping
Keep the following records to support your claims:
- Detailed medical invoices and receipts
- Proof of payment (bank/credit card statements)
- Insurance EOBs to show unreimbursed portions
- Mileage logs with dates and purposes
- Premium statements for Medicare or long-term care
8. Planning Tips for Iowa Taxpayers
- Bunch medical expenses into one year to exceed the 10% AGI threshold.
- Track transportation costs for medical visits—they count too.
- Seniors under $100K AGI should maximize premium deductions.
- Coordinate deductions—avoid double counting insurance premiums.
Conclusion
Iowa’s medical expense deduction rules are more restrictive than federal rules, thanks to the 10% AGI threshold. However, seniors who meet age and income criteria can benefit from additional premium deductions. Careful planning, accurate recordkeeping, and understanding Iowa-specific modifications can help you optimize your tax outcome in 2025.
