The following are provisions for refunding or crediting to the taxpayer deposits or payments for tax in excess of amounts legally due.
If an overpayment of income tax is claimed as a credit against estimated tax for the succeeding taxable year, such amount shall be considered as a payment of the income tax for the succeeding taxable year and no claim for credit or refund shall be allowed.
When a taxpayer elects to have an overpayment credited to estimated tax for the succeeding year, interest may be properly assessed on a deficiency of income tax for the year in which the overpayment arose. If a taxpayer elects to have all or part of an overpayment shown on the return applied to the estimated income tax for the succeeding taxable year or refunded, the election is binding to the taxpayer.
An overpayment of tax may be used to offset any outstanding tax liability owed by the taxpayer, but once an elected amount is credited as a payment of estimated tax for the succeeding year, it loses its character as an overpayment for the year in which it arose and thereafter cannot offset any subsequently determined tax liability.
See 701-subrule 55.3(7) for examples illustrating how this rule is applied.
This rule is intended to implement Iowa Code section 422.66 and section 422.73 as amended by 2012 Iowa Acts, Senate File 2328.
Iowa Admin. Code r. 701-60.3