This is a conundrum. Iodine works as a stain by binding onto the starch. Because it doesn't bind onto other things as well, we can see where the starch is. Unfortunately, this is the very thing that will probably keep the starch from being hydrolyzed by the enzyme amylase.

Enzymes only work on specific stuff (substrates) because only specific molecules fit into the active sites of the molecule. With iodine stuck to the starch, the starch is unlikely to fit into those binding sites. Whether the enzyme will still work depends on what part of the starch sticks to the stain and what part of the starch fits into the enzyme. I've never tried it myself, but I suspect the iodine would interfere with the shape of the starch enough to make a big difference.

I assume that you want to test for the presence of starch, then see if you can hydrolyze it. My suggestion is to take a sample of your material, test that for the presence of starch, then add your amylase to your material and test that product for starch. By doing assays on just a sample instead of the entire amount, you can get around the problem.

I'd also be interested in how much loss of amylase activity you get when you add the iodine. Let me know what you find out.