(1) When the word
"department" appears herein, the word refers to and is
synonymous with the "Iowa
department of revenue"; the word
"director" is the "
director of revenue" or the
director's
authorized assistants and employees.
The administration of the individual income tax is a
responsibility of the department. The department is charged with the
administration of the individual income tax, fiduciary tax, withholding of tax
and individual estimate declarations, subject always to the rules, regulations
and direction of the director.
(2) The term "computed tax"
means the amount of tax remaining before deductions of the personal exemption
credit and other credits in Iowa Code chapter 422, division II, and before the
computation of the school district surtax and the emergency medical services
income surtax.
(3) The word
"taxpayer" includes under this division:
a. Every resident of the state of
Iowa.
b. Every part-year resident
of the state of Iowa.
c. Every
estate and trust resident of this state whose income is in whole or in part
subject to the state income tax.
d.
Nonresident individuals, estates and trusts (those with a situs outside of
Iowa) receiving taxable income from property in Iowa or from business, trade,
or profession or occupation carried on in this state.
(4) The term "fiduciary"
shall mean one who acts in place of or for the benefit of another in accordance
with the meaning of the term defined in Iowa Code section
422.4. The term includes, but is
not limited to, the executor or administrator of an estate, a trustee, guardian
or conservator, or a receiver.
(5)
The term "employer" means those who have a right to exercise
control as to the performance of services as defined in Iowa Code section
422.4.
(6) The term "employee"
means and includes every individual who is a resident, or who is domiciled in
Iowa, or any nonresident, or corporation performing services within the state
of Iowa, the performance of which services constitutes, establishes, and
determines the relationship between the parties as that of employer and
employee. This includes officers of corporations, individuals, including
elected officials performing services for the United States government or any
agency or instrumentality thereof, or the state of Iowa, or any county, city,
municipality or political subdivision thereof.
(7) The term "wages" means
any remuneration for services performed by an employee for an employer,
including the cash value of all such remuneration paid in any medium or form
other than cash. Wages have the same meaning as provided by the Internal
Revenue Code as made applicable to Iowa income tax.
Wages subject to Iowa income tax withholding consist of all
remuneration, whether in cash or other form, paid to an employee for services
performed for the employer. For this purpose, the word "wages" includes all
types of employee compensation, such as salaries, fees, bonuses, and
commissions. It is immaterial whether payments are based on the hour, day,
week, month, year or on a piecework or percentage plan.
Wages paid in any form other than money are measured by the
fair market value of the goods, lodging, meals, or other consideration given in
payment for services.
Where wages are paid in property other than money, the
employer should make necessary arrangements to ensure that the tax is available
for payment. Vacation allowances and back pay, including retroactive wage
increases, are taxed as ordinary wages.
Tips or gratuities paid directly to an employee by a customer
and not accounted for to the employer are not subject to withholding. However,
the recipients must include them in their personal income tax returns.
Amounts paid specifically, either as advances or
reimbursements, for traveling or other bona fide ordinary and necessary
expenses incurred or reasonably expected to be incurred in the business of the
employer are not wages and are not subject to these taxes. Traveling and other
reimbursed expenses must be identified either by making a separate payment or
by specifically indicating the separate amounts where both wages and expense
allowance are combined in a single payment.
Wages are to be considered as paid when they are actually
paid or when they are constructively paid, that is, when they are credited to
the account of, or set apart for the wage earner so that they may be drawn upon
by the wage earner at any time, although not then actually reduced to
possession.
This rule is intended to implement Iowa Code sections
422.3,
422.4 and
422.16.
