Text: HF00222 Text: HF00224 Text: HF00200 - HF00299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 422.12C, subsection 1, paragraphs e and 1 2 f, Code 2001, are amended to read as follows: 1 3 e. For a taxpayer with net income of thirty-five thousand 1 4 dollars or more but less thanfortyeighty thousand dollars, 1 5 forty percent. 1 6 f. For a taxpayer with net income offortyeighty thousand 1 7 dollars or more, zero percent. 1 8 Sec. 2. NEW SECTION. 422.12F DEPENDENT CARE TAX CREDIT 1 9 – REFUND. 1 10 1. The taxes imposed under this division, less the credit 1 11 allowed under section 422.12 and other nonrefundable credits, 1 12 shall be reduced by a dependent care tax credit for married 1 13 taxpayers where one spouse is not gainfully employed for more 1 14 than one hundred four hours during each calendar quarter 1 15 during the tax year and that spouse provides household 1 16 services and care for a qualifying individual. The credit is 1 17 also available to an unmarried head of household where the 1 18 head of household is not gainfully employed for more than one 1 19 hundred four hours during each calendar quarter during the tax 1 20 year and the head of household provides household services and 1 21 care for a qualifying individual. An individual who has net 1 22 earnings from self-employment which are subject to the self- 1 23 employment tax under the federal Social Security Act of six 1 24 hundred dollars or more during a calendar quarter or two 1 25 thousand four hundred dollars or more during a calendar year 1 26 is considered gainfully employed for more than one hundred 1 27 four hours during a calendar quarter. The amount of the 1 28 credit shall be computed as follows: 1 29 a. Calculate a provisional credit equal to the product of 1 30 the applicable percentage and the household services and care 1 31 expenses. 1 32 b. Calculate the actual credit as follows: 1 33 (1) For a taxpayer with net income of less than ten 1 34 thousand dollars, seventy-five percent of the provisional 1 35 credit. 2 1 (2) For a taxpayer with net income of ten thousand dollars 2 2 or more but less than twenty thousand dollars, sixty-five 2 3 percent of the provisional credit. 2 4 (3) For a taxpayer with net income of twenty thousand 2 5 dollars or more but less than twenty-five thousand dollars, 2 6 fifty-five percent of the provisional credit. 2 7 (4) For a taxpayer with net income of twenty-five thousand 2 8 dollars or more but less than thirty-five thousand dollars, 2 9 fifty percent of the provisional credit. 2 10 (5) For a taxpayer with net income of thirty-five thousand 2 11 dollars or more but less than eighty thousand dollars, forty 2 12 percent of the provisional credit. 2 13 (6) For a taxpayer with net income of eighty thousand 2 14 dollars or more, zero percent of the provisional credit. 2 15 2. For purposes of this section: 2 16 a. "Applicable percentage" means the same as defined in 2 17 section 21(a)(2) of the Internal Revenue Code. 2 18 b. "Household services and care expenses" equals two 2 19 thousand four hundred dollars if there is only one qualifying 2 20 individual, and four thousand eight hundred dollars if there 2 21 are two or more qualifying individuals. 2 22 c. "Qualifying individual" means the same as defined in 2 23 section 21(b)(1) of the Internal Revenue Code. 2 24 3. Any credit in excess of the tax liability shall be 2 25 refunded. In lieu of claiming a refund, a taxpayer may elect 2 26 to have the overpayment shown on the taxpayer's final, 2 27 completed return credited to the tax liability for the 2 28 following taxable year. 2 29 4. The credit is only available to married taxpayers 2 30 filing jointly and unmarried heads of household. A taxpayer 2 31 shall not claim a credit under this section and section 2 32 422.12C for the same tax year. Nonresidents or part-year 2 33 residents of Iowa must determine their Iowa dependent care tax 2 34 credit in the ratio of their Iowa source net income to their 2 35 all source net income. 3 1 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 3 2 retroactively to January 1, 2001, for tax years beginning on 3 3 or after that date. 3 4 EXPLANATION 3 5 This bill provides a refundable tax credit under the 3 6 individual income tax for a spouse or unmarried head of 3 7 household who remains at home to provide household services 3 8 and care for a dependent and who is not gainfully employed for 3 9 more than 104 hours during each calendar quarter during the 3 10 tax year. Net earnings from self-employment of at least $600 3 11 in a calendar quarter or $2,400 in a calendar year is 3 12 considered gainfully employed for more than 104 hours during a 3 13 calendar quarter. The computation of the amount of the credit 3 14 is patterned after the method for computing the federal credit 3 15 available for persons who incurred expenses for household and 3 16 dependent care services so that they may be gainfully employed 3 17 and patterned after Iowa's child and dependent care credit, 3 18 which is a percentage of that federal credit. The bill also 3 19 expands the present child and dependent care credit to include 3 20 taxpayers with net incomes of between $40,000 and $80,000. 3 21 The bill applies retroactively to January 1, 2001, for tax 3 22 years beginning on or after that date. 3 23 LSB 1288HH 79 3 24 mg/cf/24
Text: HF00222 Text: HF00224 Text: HF00200 - HF00299 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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