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PAG LIN
1 1 Section 1. NEW SECTION. 422.12F ELDERLY DEPENDENT CARE
1 2 TAX CREDIT.
1 3 1. The taxes imposed under this division, less the credit
1 4 allowed under section 422.12 and other nonrefundable credits,
1 5 shall be reduced by an elderly dependent care tax credit for a
1 6 taxpayer that provides household services and care for a
1 7 qualifying individual. The amount of the credit shall be
1 8 computed as follows:
1 9 a. Calculate a provisional credit equal to the product of
1 10 the applicable percentage and the household services and care
1 11 expenses.
1 12 b. Calculate the actual credit as follows:
1 13 (1) For a taxpayer with net income of less than ten
1 14 thousand dollars, seventy-five percent of the provisional
1 15 credit.
1 16 (2) For a taxpayer with net income of ten thousand dollars
1 17 or more but less than twenty thousand dollars, sixty-five
1 18 percent of the provisional credit.
1 19 (3) For a taxpayer with net income of twenty thousand
1 20 dollars or more but less than twenty-five thousand dollars,
1 21 fifty-five percent of the provisional credit.
1 22 (4) For a taxpayer with net income of twenty-five thousand
1 23 dollars or more but less than thirty-five thousand dollars,
1 24 fifty percent of the provisional credit.
1 25 (5) For a taxpayer with net income of thirty-five thousand
1 26 dollars or more but less than forty thousand dollars, forty
1 27 percent of the provisional credit.
1 28 (6) For a taxpayer with net income of forty thousand
1 29 dollars or more, zero percent of the provisional credit.
1 30 2. For purposes of this section:
1 31 a. "Applicable percentage" means the same as defined in
1 32 section 21(a)(2) of the Internal Revenue Code.
1 33 b. "Household services and care expenses" equals two
1 34 thousand four hundred dollars if there is only one qualifying
1 35 individual, and four thousand eight hundred dollars if there
2 1 are two or more qualifying individuals.
2 2 c. "Qualifying individual" means an individual who is
2 3 sixty-two years of age or older and is claimed as a dependent
2 4 by the taxpayer.
2 5 3. Any credit in excess of the tax liability shall be
2 6 refunded. In lieu of claiming a refund, a taxpayer may elect
2 7 to have the overpayment shown on the taxpayer's final,
2 8 completed return credited to the tax liability for the
2 9 following taxable year.
2 10 4. Married taxpayers electing to file separate returns or
2 11 to file separately on a combined return form must determine
2 12 the elderly dependent care tax credit under subsection 1 based
2 13 upon their combined net income and allocate the total credit
2 14 amount to each spouse in the proportion that each spouse's
2 15 respective net income bears to the total combined net income.
2 16 Nonresidents or part-year residents of Iowa must determine
2 17 their elderly dependent care tax credit in the ratio of their
2 18 Iowa source net income to their all source net income.
2 19 Nonresidents or part-year residents who are married and elect
2 20 to file separate returns or to file separately on a combined
2 21 return form must allocate the elderly dependent care tax
2 22 credit between the spouses in the ratio of each spouse's Iowa
2 23 source net income to the combined Iowa source net income of
2 24 the taxpayers.
2 25 5. A taxpayer shall not claim the Iowa child and dependent
2 26 care credit and elderly dependent care tax credit for the same
2 27 individual.
2 28 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
2 29 retroactively to January 1, 2001, for tax years beginning on
2 30 or after that date.
2 31 EXPLANATION
2 32 This bill provides a refundable tax credit under the
2 33 individual income tax for a taxpayer who provides household
2 34 services and care for a dependent who is 62 years or older.
2 35 The computation of the amount of the credit is patterned after
3 1 the method for computing the federal credit available for
3 2 persons who incurred expenses for household and dependent care
3 3 services so that they may be gainfully employed and patterned
3 4 after Iowa's child and dependent care credit, which is a
3 5 percentage of that federal credit. A taxpayer may not claim
3 6 the elderly dependent care tax credit and the Iowa child and
3 7 dependent care credit for the same individual.
3 8 The bill applies retroactively to January 1, 2001, for tax
3 9 years beginning on or after that date.
3 10 LSB 2996SS 79
3 11 mg/cls/14
Text: SF00364 Text: SF00366 Text: SF00300 - SF00399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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