Text: HF00180 Text: HF00182 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 422.5, subsection 1, Code 1997, is 1 2 amended by adding the following new paragraph: 1 3 NEW PARAGRAPH. l. If a taxpayer elects to deduct federal 1 4 income taxes paid or accrued to the extent provided in section 1 5 422.9, subsection 2, paragraph "b", subparagraph (2), the 1 6 rates specified in paragraphs "g", "h", and "i" shall be 1 7 reduced to the rate of seven and one-half percent for each 1 8 paragraph. 1 9 Sec. 2. Section 422.9, subsection 1, Code 1997, is amended 1 10 to read as follows: 1 11 1. An optional standard deduction, after deduction of 1 12 federal income tax, equal to one thousand two hundred thirty 1 13 dollars for a married person who files separately or a single 1 14 person or equal to three thousand thirty dollars for a husband 1 15 and wife who file a joint return, a surviving spouse, or an 1 16 unmarried head of household. The optional standard deduction 1 17 shall not exceed the amount remaining after deduction of the 1 18 federal income tax. The amount of the federal income taxes 1 19 deducted shall not exceed the amount as computed under 1 20 subsection 2, paragraph "b". 1 21 Sec. 3. Section 422.9, subsection 2, paragraph "b", Code 1 22 1997, is amended to read as follows: 1 23 b. The taxpayer shall elect the extent to which federal 1 24 income taxes are deductible as follows: 1 25 (1) Add the amount of federal income taxes paid or accrued 1 26 as the case may be, during the tax year, adjusted by any 1 27 federal income tax refunds.Provided, however, thatHowever, 1 28 where married persons, who have filed a joint federal income 1 29 tax return, file separately, such total shall be divided 1 30 between them according to the portionthereofpaid or accrued, 1 31 as the case may be, by each. Federal income taxes paid do not 1 32 include amounts paid as a result of an adjustment to a federal 1 33 return for a tax year to which subparagraph (2) was selected. 1 34 (2) Add the amount of federal income taxes paid with the 1 35 federal return or as a result of an adjustment to a federal 2 1 return for tax years ending prior to January 1, 1998. 2 2 Subtract the amount of federal income tax refunds received for 2 3 a tax year to the extent that the federal income tax was 2 4 deducted in a previous tax year. A taxpayer electing to 2 5 deduct federal income tax as provided in this subparagraph for 2 6 the tax year shall have the income tax rates adjusted as 2 7 provided in section 422.5, subsection 1, paragraph "l". If 2 8 one spouse elects to deduct federal income taxes to the extent 2 9 allowed in this subparagraph, the other spouse shall also make 2 10 such election. 2 11 Sec. 4. This Act takes effect January 1, 1998, and applies 2 12 to tax years beginning on or after that date. 2 13 EXPLANATION 2 14 The bill gives the taxpayer an option to reduce the three 2 15 highest bracket rates from 7.55 percent, 8.8 percent, and 9.98 2 16 percent to 7.5 percent by electing to not deduct federal 2 17 income taxes paid or accrued for tax years beginning on or 2 18 after January 1, 1998. A taxpayer who does not make this 2 19 election will be taxed at the present rates and will be 2 20 allowed the present deduction for federal income taxes paid or 2 21 accrued. 2 22 The bill takes effect January 1, 1998, for tax years 2 23 beginning on or after that date. 2 24 LSB 1139HH 77 2 25 mg/jj/8
Text: HF00180 Text: HF00182 Text: HF00100 - HF00199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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