Tax Help for Good Samaritan Utility Workers

Jun 15, 2015

Utility employees from out-of-state who come in and save the day when there’s a major power outage would get some help at tax-filing time, under a bill state lawmakers have approved and sent to the governor. 

If Gov. Branstad signs the bill, employees who, for example, come to Iowa from Wisconsin would no longer have Iowa taxes withheld no matter how much money they earn here. 

Victoria Danielson at the Iowa Department of Revenue says the change will streamline tax-filing for the workers.

“And it's also streamlining for the employer,” Danielson says.   “It is precluding them from having to do withholding for employees that are making not very much of a total percentage of their entire income from the state of Iowa”.

Currently, Danielson says, workers don’t end up paying taxes in both states, but they have to jump through hoops to avoid double taxation.  The workers have Iowa tax withheld from their paychecks but then get a credit back from their own state.

Danielson says the change would also benefit Iowa workers who help out in another state, if that state enters a reciprocity agreement with Iowa.    

She says utility companies share emergency workers all the time.

“Hurricane Sandy on the east coast,” Danielson says.  “People were sent out there.  Major flooding could be a problem. Any time there is a threat to or actual loss of power.”    

The change will also apply to out-of-state workers who come to Iowa for training.

The legislation is part of a wider bill implementing other changes to the tax code.