House
File
434
-
Introduced
HOUSE
FILE
434
BY
R.
TAYLOR
A
BILL
FOR
An
Act
exempting
from
the
individual
income
tax
the
amount
1
of
income
resulting
from
the
discharge
of
certain
student
2
loan
debt
on
account
of
death
and
including
retroactive
3
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
TLSB
2403YH
(2)
87
mm/rn/sc
H.F.
434
Section
1.
Section
422.7,
Code
2017,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
18.
Subtract,
to
the
extent
included,
3
the
amount
of
income
resulting
from
a
discharge
of
qualified
4
student
loan
debt
on
account
of
the
death
of
the
student
or
5
borrower.
For
purposes
of
this
subsection,
“qualified
student
6
loan”
means
a
student
loan
as
defined
in
section
108(f)(2)
7
of
the
Internal
Revenue
Code
or
a
private
education
loan
as
8
defined
in
15
U.S.C.
§1650(a)(7).
9
Sec.
2.
RETROACTIVE
APPLICABILITY.
This
Act
applies
10
retroactively
to
January
1,
2017,
for
tax
years
beginning
on
11
or
after
that
date.
12
EXPLANATION
13
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
14
the
explanation’s
substance
by
the
members
of
the
general
assembly.
15
Under
current
law
for
federal
income
tax
purposes
and
Iowa
16
income
tax
purposes,
a
discharge
(cancellation)
of
student
17
loan
debt
on
account
of
death
results
in
taxable
income
to
18
the
debtor
for
the
amount
of
the
debt
discharged.
This
bill
19
exempts,
for
Iowa
individual
income
tax
purposes,
income
20
resulting
from
a
discharge
of
qualified
student
loan
debt
on
21
account
of
the
death
of
the
student
or
borrower.
22
“Qualified
student
loan”
is
defined
in
the
bill,
but
23
generally
includes
postsecondary
education
student
loans
made
24
by
the
United
States
or
a
federal
agency
or
instrumentality,
a
25
state
or
political
subdivision
of
a
state,
a
tax-exempt
public
26
benefit
corporation
controlling
a
hospital,
certain
educational
27
organizations,
or
private
educational
lenders.
28
The
bill
applies
retroactively
to
January
1,
2017,
for
tax
29
years
beginning
on
or
after
that
date.
30
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