SF 459 (LSB 2396XS (4) 90)

SENATE FILE 459

BY  JOCHUM, KNOX, GIDDENS, WEINER, PETERSEN, QUIRMBACH, DONAHUE, DOTZLER, WINCKLER, BOULTON, WAHLS, BISIGNANO, T. TAYLOR, TRONE GARRIOTT, BENNETT, and CELSI

A BILL FOR

An Act increasing the earned income tax credit available against the Iowa individual income tax, and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.12B, subsection 1, paragraph a, subparagraph (2), Code 2023, is amended to read as follows:
   (2)  For tax years beginning on or after January 1, 2014, but before January 1, 2023, fifteen percent.
    Sec. 2.  Section 422.12B, subsection 1, paragraph a, Code 2023, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (3)  For tax years beginning on or after January 1, 2023, thirty percent.
    Sec. 3.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2023, 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 increases the earned tax credit available against the Iowa individual income tax.
   Under current law, a taxpayer is allowed to claim an Iowa earned income tax credit equal to 15 percent of the federal earned income tax credit under section 32 of the Internal Revenue Code. Additionally, the Iowa earned income tax credit is a refundable credit.
   The bill raises the Iowa earned income tax credit from the current 15 percent of the federal earned income tax credit to 30 percent of the federal earned income tax credit.
   The bill applies retroactively to tax years beginning on or after January 1, 2023.