Senate File 2201 - Introduced SENATE FILE BY ZAUN, McKINLEY, WARD, NOBLE, PUTNEY, GASKILL, BEHN, WIECK, ZIEMAN, HOUSER, KETTERING, BOETTGER, HARTSUCH, MULDER, and JOHNSON Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to the exemption under the individual income tax 2 of certain federal tax rebates and including a retroactive 3 applicability date provision. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6080SS 82 6 mg/sc/14 PAG LIN 1 1 Section 1. Section 422.9, Code 2007, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 8. In determining the amount of deduction 1 4 for federal income tax under subsection 1 or subsection 2, 1 5 paragraph "b", for tax years beginning in the 2008 calendar 1 6 year, the amount of the deduction for the tax year shall not 1 7 be adjusted by the amount received during the tax year of the 1 8 income tax rebate provided pursuant to the federal Recovery 1 9 Rebates and Economic Stimulus for the American People Act of 1 10 2008, Pub. L. No. 110=185, and the amount of such income tax 1 11 rebate shall not be subject to taxation under this division. 1 12 Sec. 2. RETROACTIVE APPLICABILITY DATE. This Act applies 1 13 retroactively to January 1, 2008, for tax years beginning on 1 14 or after that date and before January 1, 2009. 1 15 EXPLANATION 1 16 Under state individual income tax, an individual is allowed 1 17 a deduction for federal income tax paid during the tax year, 1 18 adjusted by any federal income tax refunds received during the 1 19 same tax year. This bill provides that for the 2008 tax year 1 20 any federal tax rebate received under the federal Recovery 1 21 Rebates and Economic Stimulus for the American People Act of 1 22 2008 is not subject to tax and thus would not be used to 1 23 reduce any deduction an individual has for federal income 1 24 taxes paid. 1 25 The bill applies retroactively to January 1, 2008, for tax 1 26 years that begin on or after that date but before January 1, 1 27 2009. 1 28 LSB 6080SS 82 1 29 mg/sc/14