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PAG LIN
1 1 Section 1. NEW SECTION. 422.12F CHILD CARE TAX CREDIT.
1 2 1. The taxes imposed under this division, less the credits
1 3 allowed under section 422.12 and section 422.12B, shall be
1 4 reduced by a child care tax credit for married taxpayers where
1 5 one spouse is not gainfully employed for more than one hundred
1 6 four hours during each calendar quarter during the tax year
1 7 and that spouse provides household services and care for a
1 8 qualifying child. An individual who has net earnings from
1 9 self-employment which are subject to the self-employment tax
1 10 under the federal Social Security Act of six hundred dollars
1 11 or more during a calendar quarter or two thousand four hundred
1 12 dollars or more during a calendar year is considered gainfully
1 13 employed for more than one hundred four hours during a
1 14 calendar quarter. The amount of the credit is equal to two
1 15 hundred fifty dollars for each qualified child.
1 16 2. Any credit in excess of the tax liability is
1 17 nonrefundable. The credit is only available to married
1 18 taxpayers filing jointly. A taxpayer shall not claim a credit
1 19 under this section and section 422.12C for the same tax year.
1 20 Nonresidents or part-year residents of Iowa must determine
1 21 their Iowa child care tax credit in the ratio of their Iowa
1 22 source net income to their all source net income.
1 23 3. "Qualifying child" means a dependent with respect to
1 24 whom the taxpayer is entitled to a deduction under section
1 25 151(c) of the Internal Revenue Code who is a child, stepchild,
1 26 or adopted child, or other lineal descendent of the taxpayer
1 27 and who is less than six years of age at the end of the tax
1 28 year.
1 29 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
1 30 retroactively to January 1, 2001, for tax years beginning on
1 31 or after that date.
1 32 EXPLANATION
1 33 This bill provides a $250 individual income tax credit for
1 34 each qualified child for married taxpayers where one spouse
1 35 remains at home to provide household services and care for a
2 1 qualifying child and is not gainfully employed for more than
2 2 104 hours during each calendar quarter during the tax year.
2 3 Net earnings from self-employment of at least $600 in a
2 4 calendar quarter or $2,400 in a calendar year is considered
2 5 gainfully employed for more than 104 hours during a calendar
2 6 quarter.
2 7 A qualifying child is a dependent who is a child,
2 8 stepchild, adopted child, or other lineal descendent of the
2 9 taxpayer who is less than six years old at the end of the tax
2 10 year.
2 11 The bill applies retroactively to January 1, 2001, for tax
2 12 years beginning on or after that date.
2 13 LSB 1304SS 79
2 14 mg/gg/8
Text: SF00040 Text: SF00042 Text: SF00000 - SF00099 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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