Text: SSB03136 Text: SSB03138 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 422.11J SCHOOL TUITION
1 2 ORGANIZATION TAX CREDIT.
1 3 1. The taxes imposed under this division less the credits
1 4 allowed under sections 422.12 and 422.12B shall be reduced by
1 5 a school tuition organization tax credit equal to the amount
1 6 of the voluntary cash contributions made by the taxpayer
1 7 during the tax year to a school tuition organization, not to
1 8 exceed either of the following:
1 9 a. Five hundred dollars for a single individual.
1 10 b. Six hundred twenty-five dollars for a married couple.
1 11 2. To be eligible for this credit, all of the following
1 12 shall apply:
1 13 a. A deduction pursuant to section 170 of the Internal
1 14 Revenue Code for any amount of the contribution is not taken
1 15 for state tax purposes.
1 16 b. The contribution does not designate that any part of
1 17 the contribution be used for the direct benefit of any
1 18 dependent of the taxpayer.
1 19 3. Any credit in excess of the tax liability is not
1 20 refundable but the excess for the tax year may be credited to
1 21 the tax liability for the following five tax years or until
1 22 depleted, whichever is the earlier.
1 23 4. Married taxpayers who file separate returns or file
1 24 separately on a combined return form must determine the tax
1 25 credit under subsection 1, paragraph "b", based upon their
1 26 combined net income and allocate the total credit amount to
1 27 each spouse in the proportion that each spouse's respective
1 28 net income bears to the total combined net income.
1 29 Nonresidents or part-year residents of Iowa must determine
1 30 their tax credit in the ratio of their Iowa source net income
1 31 to their all source net income. Nonresidents or part-year
1 32 residents who are married and elect to file separate returns
1 33 or to file separately on a combined return form must allocate
1 34 the tax credit between the spouses in the ratio of each
1 35 spouse's Iowa source net income to the combined Iowa source
2 1 net income of the taxpayers.
2 2 5. For purposes of this section:
2 3 a. "Disabled student" means a student who has any of the
2 4 following conditions:
2 5 (1) Hearing impairment.
2 6 (2) Visual impairment.
2 7 (3) Preschool moderate delay.
2 8 (4) Preschool severe delay.
2 9 (5) Preschool speech or language delay.
2 10 b. "Qualified school" means a preschool for disabled
2 11 students in this state or a nonpublic elementary or secondary
2 12 school in this state which is accredited under section 256.11
2 13 and adheres to the provisions of the federal Civil Rights Act
2 14 of 1964 and chapter 216.
2 15 c. "School tuition organization" means a charitable
2 16 organization in this state that is exempt from federal
2 17 taxation under section 501(c)(3) of the Internal Revenue Code
2 18 and that allocates at least ninety percent of its annual
2 19 revenue for educational scholarships or tuition grants to
2 20 children to allow them to attend any qualified school of their
2 21 parents' choice. In addition, to qualify as a school tuition
2 22 organization, the charitable organization shall provide
2 23 educational scholarships or tuition grants to students without
2 24 limiting availability to only students of one school.
2 25 6. A school tuition organization that receives a voluntary
2 26 cash contribution pursuant to this subsection shall report to
2 27 the department, in a form prescribed by the department, by
2 28 February 28 of each year all of the following information:
2 29 a. The name, address, and contact name of the school
2 30 tuition organization.
2 31 b. The total number of contributions received during the
2 32 previous calendar year.
2 33 c. The total dollar amount of contributions received
2 34 during the previous calendar year.
2 35 d. The total number of children awarded educational
3 1 scholarships or tuition grants during the previous calendar
3 2 year.
3 3 e. The total dollar amount of educational scholarships and
3 4 tuition grants awarded during the previous calendar year.
3 5 f. For each school to which educational scholarships or
3 6 tuition grants were awarded all of the following shall be
3 7 provided:
3 8 (1) The name and address of the school.
3 9 (2) The number of educational scholarships and tuition
3 10 grants awarded during the previous calendar year.
3 11 (3) The total dollar amount of educational scholarships
3 12 and tuition grants awarded during the previous calendar year.
3 13 Sec. 2. APPLICABILITY DATE. This Act applies to tax years
3 14 beginning on or after January 1, 2005.
3 15 EXPLANATION
3 16 This bill provides for an individual income tax credit
3 17 equal to the voluntary contributions made to a school tuition
3 18 organization that is exempt from federal income tax. The tax
3 19 credit is limited to $500 for single individuals and $625 for
3 20 married persons filing jointly. If married individuals file
3 21 separately, the $625 is divided between them based upon each
3 22 individual's net income. At least 90 percent of total
3 23 contributions must be used by the school tuition organization
3 24 to provide educational scholarships or tuition grants to
3 25 children attending nonpublic schools or preschools for
3 26 disabled students that are accredited under state law and
3 27 adhere to the federal Civil Rights Act of 1964 and the state
3 28 civil rights law. The contribution may not be deducted as a
3 29 charitable deduction for state tax purposes or be designated
3 30 for the direct benefit of the taxpayer's dependents.
3 31 The school tuition organization must report to the
3 32 department of revenue information related to the amount of
3 33 contributions made to the organization, and the number,
3 34 school, and amount of scholarships and grants awarded.
3 35 The bill applies to tax years beginning on or after January
4 1 1, 2005.
4 2 LSB 6013SC 80
4 3 mg/pj/5
Text: SSB03136 Text: SSB03138 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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