House File 2111

                                       HOUSE FILE       
                                       BY  ALONS, CHAMBERS, HEATON,
                                           KURTENBACH, and HEDDENS


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act modifying income requirements for the child and dependent
  2    care state income tax credit for taxpayers with a child with
  3    special needs and providing for retroactive applicability.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 5408YH 80
  6 jp/pj/5

PAG LIN

  1  1    Section 1.  Section 422.12C, Code 2003, is amended by
  1  2 adding the following new subsection:
  1  3    NEW SUBSECTION.  1A.  For the purposes of this subsection,
  1  4 "child with special needs" means the same as "family member"
  1  5 as defined in section 225C.35.  Notwithstanding subsection 1,
  1  6 regardless of net income, if a taxpayer resides in a county in
  1  7 which the department of human services does not offer the
  1  8 children=at=home program and the taxpayer has a dependent
  1  9 child with special needs, the taxes imposed under this
  1 10 division, less the credits allowed under sections 422.11A,
  1 11 422.11B, 422.12, and 422.12B, shall be reduced by a child and
  1 12 dependent care credit equal to one hundred percent of the
  1 13 federal child and dependent care credit provided in section 21
  1 14 of the Internal Revenue Code.
  1 15    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act is
  1 16 retroactively applicable to the tax year beginning January 1,
  1 17 2004, and is applicable on and after that date.
  1 18                           EXPLANATION
  1 19    This bill modifies the income requirements of the child and
  1 20 dependent care state income tax credit for taxpayers with a
  1 21 child with special needs.
  1 22    Under current law, this credit is provided as a percentage
  1 23 of the federal child and dependent care credit on a sliding
  1 24 scale, depending upon the net income of the taxpayer.  The
  1 25 credit is completely phased out for taxpayers with a net
  1 26 income of $40,000 or more.
  1 27    The bill provides that a taxpayer who resides in a county
  1 28 in which the department of human services does not offer the
  1 29 children=at=home program and who has a dependent child with
  1 30 special needs is eligible for 100 percent of the federal child
  1 31 and dependent care credit, regardless of the taxpayer's net
  1 32 income.  The children=at=home program provides grant funding
  1 33 in 14 counties to families with a special needs child, based
  1 34 upon eligibility criteria used for the family support subsidy
  1 35 program, except for annual income.  Under the bill, a "child
  2  1 with special needs" means the same as the definition of
  2  2 "family member" for the family support subsidy program in Code
  2  3 section 225C.35:  a person who is less than 18 years of age
  2  4 and who by educational determination has a moderate, severe,
  2  5 or profound educational disability or special health care
  2  6 needs, or who otherwise meets the definition of developmental
  2  7 disability in federal law.
  2  8    The bill is retroactively applicable to the tax year
  2  9 beginning July 1, 2004, and is effective on and after that
  2 10 date.
  2 11 LSB 5408YH 80
  2 12 jp/pj/5