Text: SSB03163 Text: SSB03165 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.3, subsection 5, Code Supplement
1 2 2003, is amended to read as follows:
1 3 5. "Internal Revenue Code" means the Internal Revenue Code
1 4 of 1954, prior to the date of its redesignation as the
1 5 Internal Revenue Code of 1986 by the Tax Reform Act of 1986,
1 6 or means the Internal Revenue Code of 1986 as amended to and
1 7 including January 1, 2003, and as amended by Pub. L. No. 108-
1 8 173 } 1201 creating section 223 of the Internal Revenue Code
1 9 to allow for a deduction for contributions to health savings
1 10 accounts, whichever is applicable.
1 11 Sec. 2. Section 422.7, Code Supplement 2003, is amended by
1 12 adding the following new subsection:
1 13 NEW SUBSECTION. 44. If the taxpayer was allowed a
1 14 deduction in computing federal adjusted gross income for
1 15 amounts contributed to an Archer medical savings account under
1 16 section 220 of the Internal Revenue Code or to a health
1 17 savings account under section 223 of the Internal Revenue
1 18 Code, an additional state deduction for such federal deduction
1 19 is allowed as follows: subtract an additional amount equal to
1 20 fifty percent of the amount of such federal deduction.
1 21 Sec. 3. NEW SECTION. 422.11J LONG-TERM CARE INSURANCE
1 22 TAX CREDIT.
1 23 For tax years beginning on or after January 1, 2007, the
1 24 taxes imposed under this division less the credits allowed
1 25 under sections 422.12 and 422.12B shall be reduced by a long-
1 26 term care insurance tax credit. The amount of the credit is
1 27 equal to fifty percent, not to exceed five hundred dollars, of
1 28 the premium costs paid during the tax year on each qualified
1 29 long-term care insurance contract that offers coverage to the
1 30 taxpayer, the taxpayer's spouse or dependent, or a parent or
1 31 grandparent of the taxpayer or the taxpayer's spouse. Any
1 32 credit in excess of the tax liability is nonrefundable. A
1 33 deduction for premium costs is not allowed for the tax year
1 34 for the amount of credit taken under this section.
1 35 For purposes of this section, "qualified long-term care
2 1 insurance contract" means the same as defined in section 7702B
2 2 of the Internal Revenue Code.
2 3 Sec. 4. APPLICABILITY DATES. Sections of this Act are
2 4 applicable as follows:
2 5 1. Sections 1 and 2 of this Act are retroactively
2 6 applicable to January 1, 2004, for tax years beginning on or
2 7 after that date.
2 8 2. Section 3 of this Act is applicable to tax years
2 9 beginning on or after January 1, 2007.
2 10 EXPLANATION
2 11 This bill provides tax incentives for taxpayers to purchase
2 12 certain methods of health coverage. The Internal Revenue Code
2 13 (IRC) was amended by adding new section 223 of the IRC
2 14 relating to deductions for contributions to health savings
2 15 accounts effective with tax years beginning after December 31,
2 16 2003. The bill couples with this change in the IRC and thus
2 17 contributions deductible for federal tax purposes are
2 18 deductible for state tax purposes in regard to contributions
2 19 made to health savings accounts. In addition, the bill
2 20 increases the amount of the federal deduction by 50 percent
2 21 not only for contributions to health savings accounts but also
2 22 to those for Archer medical savings accounts under IRC section
2 23 220. These deductions are retroactive to tax years beginning
2 24 on or after January 1, 2004.
2 25 The bill provides a long-term care insurance tax credit
2 26 under the individual income tax equal to 50 percent of the
2 27 premiums paid by the taxpayer on each qualified long-term care
2 28 insurance contract that covers the taxpayer, the taxpayer's
2 29 spouse or dependent, or a parent or grandparent of the
2 30 taxpayer or the taxpayer's spouse. Each credit shall not
2 31 exceed $500 and any excess credits are not refundable. The
2 32 insurance contract for which the credit is allowed, per the
2 33 IRC, is a renewable insurance policy that has no cash
2 34 surrender value and that provides coverage for necessary
2 35 diagnostic, preventive, therapeutic, curing, treatment,
3 1 mitigating, and rehabilitative services to chronically ill
3 2 individuals prescribed by a licensed health care practitioner.
3 3 A deduction for premium costs paid is not allowed to the
3 4 extent of the amount of the credit taken. This tax credit
3 5 applies to tax years beginning on or after January 1, 2007.
3 6 LSB 6907SC 80
3 7 mg/sh/8
Text: SSB03163 Text: SSB03165 Text: SSB03100 - SSB03199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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