SF 2399 (LSB 5377SV (1) 87)

SENATE FILE 2399

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 2379)

A BILL FOR

An Act exempting from the Iowa individual income tax the amount of income resulting from prize money and medals received from competition in the olympic or paralympic games, and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.7, Code 2018, is amended by adding the following new subsection:
   NEW SUBSECTION.  18.  a.  Subtract, to the extent included, the amount of income resulting from the value of any medal awarded in, or any prize money received from the United States olympic committee on account of, competition in the olympic games or paralympic games.
   b.  The subtraction in paragraph “a” does not apply to a taxpayer whose net income exceeds one million dollars for the tax year, or five hundred thousand dollars in the case of a married person filing separate returns or separately on a combined return.
    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2018, for tax years beginning on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the taxation of medals or prize money received from competition in the olympic or paralympic games.
   For federal income tax purposes pursuant to Internal Revenue Code §74(d), enacted by Congress in 2016, income resulting from the value of any medal awarded in, or any prize money received from the United States olympic committee on account of, competition in the olympic games or paralympic games is exempt from the federal income tax for individuals whose adjusted gross income does not exceed $1 million ($500,000 for married individuals filing separately). However, Iowa has not coupled with (enacted) this federal provision for purposes of the Iowa individual income tax.
   The bill exempts from the Iowa individual income tax the amount of income resulting from the value of any medal awarded in, or any prize money received from the United States olympic committee on account of, competition in the olympic games or paralympic games to any taxpayer whose net income does not exceed $1 million ($500,000 in the case of a married person filing separate returns or separately on a combined return).
   The bill applies retroactively to January 1, 2018, for tax years beginning on or after that date.