House File 715 H-1319 Amend House File 715 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 IOWA EDUCATIONAL SAVINGS PLAN AND FIRST-TIME HOMEBUYERS DUE 5 DATES 6 Section 1. Section 422.7, subsection 22, paragraph a, Code 7 2023, is amended to read as follows: 8 a. Subtract the maximum contribution that may be deducted 9 for Iowa income tax purposes as a participant in the Iowa 10 educational savings plan trust pursuant to section 12D.3, 11 subsection 1 . For purposes of this paragraph, a participant 12 who makes a contribution on or before the date prescribed in 13 section 422.21 for making and filing an individual income tax 14 return, excluding extensions , or the date for making and filing 15 an individual income tax return determined by the director 16 pursuant to an order issued under section 421.17, subsection 17 30 , may elect to be deemed to have made the contribution on the 18 last day of the preceding calendar year. The director, after 19 consultation with the treasurer of state, shall prescribe by 20 rule the manner and method by which a participant may make an 21 election authorized by the preceding sentence. 22 Sec. 2. Section 541B.3, subsection 1, paragraph a, Code 23 2023, is amended to read as follows: 24 a. Beginning January 1, 2018, an An individual may open an 25 interest-bearing savings account with a financial institution 26 and designate the entire account as a first-time homebuyer 27 savings account for the purpose of paying or reimbursing a 28 designated beneficiary’s eligible home costs in connection with 29 a qualified home purchase. The first-time homebuyer savings 30 account designation shall be made no later than April 30 of the 31 year following the tax year during which the account is opened, 32 on forms provided by the department and shall be submitted on 33 or before the date prescribed in section 422.21 for making and 34 filing an individual income tax return, excluding extensions, 35 -1- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 1/ 39 #1.

or the date for making and filing an individual income tax 1 return determined by the director pursuant to an order issued 2 under section 421.17, subsection 30, applicable to the tax year 3 in which the account is opened . 4 Sec. 3. Section 541B.3, subsection 2, paragraph a, Code 5 2023, is amended to read as follows: 6 a. The account holder shall designate one individual as 7 beneficiary of the first-time homebuyer savings account. The 8 designation shall be made on forms provided by the department 9 and no later than April 30 of the year following the tax year 10 during which the account is opened and shall be submitted on 11 or before the date prescribed in section 422.21 for making and 12 filing an individual income tax return, excluding extensions, 13 or the date for making and filing an individual income tax 14 return determined by the director pursuant to an order issued 15 under section 421.17, subsection 30, applicable to the tax 16 year in which the designation is made . The account holder may 17 change the designated beneficiary of the first-time homebuyer 18 savings account at any time. 19 DIVISION II 20 BONUS DEPRECIATION AND INCREASED EXPENSING —— APPLICABILITY 21 Sec. 4. 2018 Iowa Acts, chapter 1161, section 134, is 22 amended to read as follows: 23 SEC. 134. APPLICABILITY. 24 1. This division of this Act applies to tax years beginning 25 on or after the effective date of this division of this Act. 26 2. The repeal of section 422.7, subsections 39, 39B, 43, 27 and 53, and section 422.35, subsections 19, 19B, 20, and 28 24, relating to bonus depreciation under section 168 of the 29 Internal Revenue Code or increased expensing under section 179 30 of the Internal Revenue Code, applies to property placed in 31 service on or after the effective date of this division of this 32 Act. 33 Sec. 5. EFFECTIVE DATE. This division of this Act, being 34 deemed of immediate importance, takes effect upon enactment. 35 -2- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 2/ 39

Sec. 6. RETROACTIVE APPLICABILITY. This division of this 1 Act applies retroactively to January 1, 2023, for tax years 2 beginning on or after that date. 3 DIVISION III 4 TAX FILING STATUS MODIFICATIONS 5 Sec. 7. Section 422.5, Code 2023, is amended by adding the 6 following new subsection: 7 NEW SUBSECTION . 12. For tax years beginning on or after 8 January 1, 2023, a taxpayer shall use the same filing status 9 for Iowa income tax purposes as the taxpayer used for federal 10 income tax purposes. 11 Sec. 8. Section 422.7, subsection 4, Code 2023, is amended 12 to read as follows: 13 4. Individual taxpayers and married taxpayers who file a 14 joint federal income tax return and who elect to file a joint 15 return or separate returns for Iowa income tax purposes may 16 avail themselves of the disability income exclusion and shall 17 compute the amount of the disability income exclusion subject 18 to the limitations for joint federal income tax return filers 19 provided by section 105(d) of the Internal Revenue Code. The 20 disability income exclusion provided in section 105(d) of the 21 Internal Revenue Code, as amended up to and including December 22 31, 1982, continues to apply for state income tax purposes for 23 tax years beginning on or after January 1, 1984. 24 Sec. 9. Section 422.7, subsection 5, paragraph a, Code 2023, 25 is amended to read as follows: 26 a. For tax years beginning in the 2023 calendar year, 27 subtract the amount of federal income taxes paid during the tax 28 year to the extent payment is for a tax year beginning prior 29 to January 1, 2023, and add any federal income tax refunds 30 received during the tax year to the extent the federal income 31 tax was deducted for a tax year beginning prior to January 1, 32 2023. Where married persons who have filed a joint federal 33 income tax return file separately for state tax purposes, such 34 total shall be divided between them according to the portion 35 -3- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 3/ 39

of the total paid by each. Federal income taxes paid for a tax 1 year in which an Iowa return was not required to be filed shall 2 not be subtracted. 3 Sec. 10. Section 422.12B, subsection 2, Code 2023, is 4 amended to read as follows: 5 2. Married taxpayers electing to file separate returns may 6 avail themselves of the earned income credit by allocating the 7 earned income credit to each spouse in the proportion that each 8 spouse’s respective earned income bears to the total combined 9 earned income. Taxpayers affected by the allocation provisions 10 of section 422.8 shall be permitted a deduction for the credit 11 only in the amount fairly and equitably allocable to Iowa under 12 rules prescribed by the director. 13 Sec. 11. Section 422.12C, subsection 4, Code 2023, is 14 amended to read as follows: 15 4. Married taxpayers who have filed joint federal returns 16 electing to file separate returns must determine the child and 17 dependent care credit under subsection 1 or the early childhood 18 development tax credit under subsection 2 based upon their 19 combined net income and allocate the total credit amount to 20 each spouse in the proportion that each spouse’s respective net 21 income bears to the total combined net income. Nonresidents 22 or part-year residents of Iowa must determine their Iowa child 23 and dependent care credit in the ratio of their Iowa source 24 net income to their all source net income. Nonresidents or 25 part-year residents who are married and elect to file separate 26 returns must allocate the Iowa child and dependent care credit 27 between the spouses in the ratio of each spouse’s Iowa source 28 net income to the combined Iowa source net income of the 29 taxpayers. 30 Sec. 12. RETROACTIVE APPLICABILITY. This division of this 31 Act applies retroactively to January 1, 2023, for tax years 32 beginning on or after that date. 33 DIVISION IV 34 WITHHOLDING 35 -4- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 4/ 39

Sec. 13. Section 99B.8, Code 2023, is amended to read as 1 follows: 2 99B.8 Tax on prizes. 3 All prizes awarded pursuant to a gambling activity under 4 this chapter are Iowa earned income and are subject to state 5 and federal income tax laws. A person conducting a game of 6 skill, game of chance, bingo, or a raffle shall deduct state 7 income taxes, pursuant to section 422.16, subsection 1 2 , from 8 a cash prize awarded to an individual. An amount deducted from 9 the prize for payment of a state tax shall be remitted to the 10 department of revenue on behalf of the prize winner. 11 Sec. 14. Section 99D.16, Code 2023, is amended to read as 12 follows: 13 99D.16 Withholding tax on winnings. 14 All winnings provided in section 99D.11 are Iowa earned 15 income and are subject to state and federal income tax laws. 16 An amount deducted from winnings for payment of the state tax, 17 pursuant to section 422.16, subsection 1 2 , shall be remitted 18 to the department of revenue on behalf of the individual who 19 won the wager. 20 Sec. 15. Section 99F.18, Code 2023, is amended to read as 21 follows: 22 99F.18 Tax on winnings. 23 All winnings derived from slot machines operated pursuant to 24 this chapter are Iowa earned income and are subject to state 25 and federal income tax laws. An amount deducted from winnings 26 for payment of the state tax, pursuant to section 422.16, 27 subsection 1 2 , shall be remitted to the department of revenue 28 on behalf of the winner. 29 Sec. 16. Section 99G.31, subsection 3, paragraph i, Code 30 2023, is amended to read as follows: 31 i. The proceeds of any lottery prize shall be subject to 32 state and federal income tax laws. An amount deducted from the 33 prize for payment of a state tax, pursuant to section 422.16, 34 subsection 1 2 , shall be transferred by the authority to the 35 -5- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 5/ 39

department of revenue on behalf of the prize winner. 1 Sec. 17. Section 422.16, Code 2023, is amended by striking 2 the section and inserting in lieu thereof the following: 3 422.16 Withholding of income tax at source —— penalties —— 4 interest —— declaration of estimated tax —— bond. 5 1. As used in this section, unless the context otherwise 6 requires, “withholding agent” means any individual, fiduciary, 7 estate, trust, corporation, partnership or association in 8 whatever capacity acting and including all officers and 9 employees of the state of Iowa, or any municipal corporation 10 of the state of Iowa and of any school district or school 11 board of the state, or of any political subdivision of the 12 state of Iowa, or any tax-supported unit of government that is 13 obligated to pay or has control of paying or does pay to any 14 resident or nonresident of the state of Iowa or the resident’s 15 or nonresident’s agent any wages that are subject to the Iowa 16 income tax in the hands of such resident or nonresident, or 17 any of the above-designated entities making payment or having 18 control of making such payment of any taxable Iowa income 19 to any nonresident. The term “withholding agent” shall also 20 include an officer or employee of a corporation or association, 21 or a member or employee of a partnership, who as such officer, 22 employee, or member has the responsibility to perform an act 23 under this section and who subsequently knowingly violates the 24 provisions of this section. The term “withholding agent” shall 25 also include every employer as defined in this subchapter and 26 further defined in the Internal Revenue Code. 27 2. a. (1) Every withholding agent paying wages to an 28 Iowa resident, or nonresident working in Iowa, shall deduct 29 and withhold from the wages an amount which will approximate 30 the annual tax liability of the person on a calendar year 31 basis, calculated on the basis of tables to be prepared by the 32 department and schedules or percentage rates, based on the 33 wages, to be prescribed by the department. 34 (2) Every employee or other person shall declare to the 35 -6- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 6/ 39

withholding agent the amount of the employee’s or other 1 person’s withholding allowance to be used in applying the 2 tables and schedules or percentage rates. However, the amount 3 of withholding allowance declared shall not exceed the amount 4 to which the employee or other person is entitled except 5 as allowed under sections 3402(m)(1) and 3402(m)(3) of the 6 Internal Revenue Code and as allowed by rules prescribed by the 7 director. The claiming of an amount of withholding allowance 8 in excess of entitlement is a serious misdemeanor. 9 b. (1) In the case of a nonresident having income subject 10 to taxation by Iowa, but not subject to withholding of such 11 tax under this subsection or subject to the provisions of 12 section 422.16B, a withholding agent shall withhold from such 13 income at the same rate as provided in this subsection. A 14 withholding agent and nonresident shall be subject to the 15 provisions of this section, according to the context, except 16 that a withholding agent may be absolved of the requirement to 17 withhold taxes from the income of a nonresident upon receipt of 18 a certificate from the department issued in accordance with the 19 provisions of section 422.17. 20 (2) In the case of a nonresident having income from a trade 21 or business carried on by the nonresident in whole or in part 22 within the state of Iowa, the nonresident shall be considered 23 to be subject to the provisions of this paragraph unless 24 such trade or business is of such nature that the business 25 entity itself, as a withholding agent, is required to and does 26 withhold Iowa income tax from the distributions made to such 27 nonresident from such trade or business. 28 c. For the purposes of this subsection , at a rate specified 29 by the department, state income tax shall be withheld from 30 pensions, annuities, other similar periodic payments, and other 31 income payments under sections 3402(o), 3402(p), 3402(s), 32 3405(a), 3405(b), and 3405(c) of the Internal Revenue Code made 33 to Iowa residents if the payments are subject to Iowa tax. 34 d. For the purposes of this subsection, state income tax 35 -7- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 7/ 39

shall be withheld on winnings in excess of six hundred dollars 1 derived from gambling activities authorized under chapter 2 99B or 99G. State income tax shall be withheld on winnings 3 in excess of one thousand dollars from gambling activities 4 authorized under chapter 99D. State income tax shall be 5 withheld on winnings in excess of one thousand two hundred 6 dollars derived from slot machines authorized under chapter 7 99F. 8 e. For the purposes of this subsection, state income tax 9 shall be withheld at the highest rate described in section 10 422.5A from supplemental wages of an employee in those 11 circumstances in which the employer treats the supplemental 12 wages as wholly separate from regular wages for purposes 13 of withholding and federal income tax is withheld from the 14 supplemental wages under section 3402(g) of the Internal 15 Revenue Code. 16 3. a. A withholding agent is not required to withhold 17 state income tax from payments subject to taxation made 18 to a nonresident for commodity credit certificates, grain, 19 livestock, domestic fowl, or other agricultural commodities 20 or products sold to a withholding agent by a nonresident or 21 the nonresident’s representative, if the withholding agent 22 provides on forms prescribed by the department information 23 relating to the sales required by the department to determine 24 the state income tax liabilities of a nonresident. However, 25 a withholding agent may elect to make estimated tax payments 26 on behalf of a nonresident on the basis of the net income of 27 the nonresident from the agricultural commodities or products, 28 if the estimated tax payments are made on or before the last 29 day of the first month after the end of the tax years of the 30 nonresident. 31 b. Nonresidents engaged in any facet of feature film, 32 television, or educational production using the film or 33 videotape disciplines in the state are not subject to Iowa 34 withholding if the employer has applied to the department for 35 -8- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 8/ 39

exemption from the withholding requirement and the department 1 has determined that any nonresident receiving wages would be 2 entitled to a credit against Iowa income taxes paid. 3 c. Individuals described in section 29C.24 are not subject 4 to withholding, as provided in that section. 5 4. a. A withholding agent required to deduct and withhold 6 tax under subsection 2 shall file a return on or before the 7 last day of the month following the quarterly period on forms 8 prescribed by the director and remit to the department the 9 amount of tax due at the following frequencies: 10 (1) A withholding agent shall remit income tax withheld on 11 a quarterly basis if the withholding agent withholds less than 12 six thousand dollars annually and no more than five hundred 13 dollars in any one month. Payment shall be due on the same day 14 as the quarterly return. 15 (2) A withholding agent shall remit income tax withheld on 16 a monthly basis if the withholding agent withholds more than 17 five hundred dollars in any one month and not more than five 18 thousand dollars in a semimonthly period. Payment shall be 19 made on or before the fifteenth day of the month following 20 the month of withholding, except that a deposit for the third 21 month in a calendar quarter shall be due on the same day as the 22 quarterly return. 23 (3) A withholding agent shall remit income tax withheld on 24 a semimonthly basis if the withholding agent withholds more 25 than five thousand dollars in a semimonthly period. The first 26 semimonthly deposit for the period from the first of the month 27 through the fifteenth of the month is due on the twenty-fifth 28 day of the month in which the withholding occurs. The second 29 monthly deposit for the period from the sixteenth of the month 30 through the end of the month is due on the tenth day of the 31 month following the month in which the withholding occurs. 32 (4) A withholding agent may elect to remit on an annual 33 basis if the withholding agent employs not more than two 34 employees and expects to employ the employees for the full 35 -9- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 9/ 39

calendar year. The electing withholding agent shall remit the 1 full amount of income taxes required to be withheld from the 2 wages of the employees for the full calendar year with the 3 quarterly return for the first calendar quarter. The amount 4 to be paid shall be computed as if the employees were employed 5 for the full calendar year for the same wages and with the 6 same pay periods as prevailed during the first quarter of the 7 year with respect to such employees. The electing withholding 8 agent shall only remit the lump sum payment with the written 9 consent of all employees involved. The withholding agent shall 10 be entitled to recover from the employee any part of the lump 11 sum payment that represents an advance to the employee. If 12 a withholding agent pays a lump sum with the first quarterly 13 return, the withholding agent shall be excused from filing 14 further quarterly returns for the calendar year involved unless 15 the withholding agent hires other or additional employees. 16 b. Every withholding agent on or before February 15 17 following the close of the calendar year in which the 18 withholding occurs shall send to the department copies of 19 income statements required by subsection 8. At the discretion 20 of the director, the withholding agent shall not be required to 21 send income statements if the information is available from the 22 internal revenue service or other state or federal agencies. 23 c. If the director has reason to believe that the collection 24 of the tax provided for in subsection 2 is in jeopardy, the 25 director may require the withholding agent to file a return 26 as required in paragraph “a” , and pay the tax at any time, in 27 accordance with section 422.30. The director may authorize 28 incorporated banks, trust companies, or other depositories 29 authorized by law which are depositories or financial agents of 30 the United States or of this state, to receive any tax imposed 31 under this chapter, in the manner, at the times, and under the 32 conditions the director prescribes. The director shall also 33 prescribe the manner, times, and conditions under which the 34 receipt of the tax by those depositories is to be treated as 35 -10- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 10/ 39

payment of the tax to the department. 1 d. The director, in cooperation with the department of 2 management, may periodically change the filing and remittance 3 thresholds by administrative rule if in the best interest of 4 the state and the taxpayer. 5 5. Every withholding agent who fails to withhold or pay to 6 the department any sums required by this chapter to be withheld 7 and paid, shall be personally, individually, and corporately 8 liable to the state of Iowa, and any sum withheld in accordance 9 with the provisions of subsection 2, shall be deemed to be 10 held in trust for the state of Iowa. Notwithstanding section 11 489.304, this subsection applies to a member or manager of a 12 limited liability company. 13 6. In the event a withholding agent fails to withhold and 14 pay over to the department any amount required to be withheld 15 under subsection 2, such amount may be assessed against 16 such withholding agent in the same manner as prescribed for 17 the assessment of income tax under the provisions of this 18 subchapter and subchapter VI. 19 7. Whenever the director determines that any withholding 20 agent has failed to withhold or pay over to the department sums 21 required to be withheld under subsection 2, the unpaid amount 22 shall be a lien as described in section 422.26, shall attach 23 to the property of that withholding agent, and in all other 24 respects the procedure with respect to such lien shall apply 25 as set forth in section 422.26. 26 8. a. Every withholding agent required to deduct and 27 withhold tax under subsection 2 shall furnish to each employee, 28 nonresident, or other person with respect to the income 29 paid by the employer or withholding agent to each employee, 30 nonresident, or other person during the calendar year, on or 31 before January 31 of the succeeding year, or, in the case of 32 an employee, if the employment of the employee is terminated 33 before the close of the calendar year, within thirty days from 34 the day on which the last payment of wages or other taxable 35 -11- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 11/ 39

income is made, if requested by the employee, but not later 1 than January 31 of the following year, an income statement 2 showing all of the following: 3 (1) The name and address of the employer or withholding 4 agent, and the taxpayer identification number of the employer 5 or withholding agent. 6 (2) The name of the employee, nonresident, or other person 7 and the taxpayer identification number of that employee, 8 nonresident, or other person, together with the last known 9 address of the employee, nonresident, or other person to whom 10 wages or other taxable income has been paid during the period. 11 (3) The gross amount of wages or other taxable income paid 12 to the employee, nonresident, or other person. 13 (4) The total amount deducted and withheld as tax under the 14 provisions of subsection 2. 15 (5) The total amount of federal income tax withheld. 16 b. An income statement required to be furnished by this 17 subsection with respect to any wages or other taxable Iowa 18 income or any additional information required to be displayed 19 on the income statement shall be in such form or forms as the 20 director may prescribe by rule. 21 9. A withholding agent shall be liable for the payment of 22 the tax required to be deducted and withheld or the amount 23 actually deducted, whichever is greater, under subsection 24 2. Any amount deducted and withheld as tax under subsection 25 2 during any calendar year upon the wages of any employee, 26 nonresident, or other person shall be allowed as a credit to 27 the employee, nonresident, or other person against the tax 28 imposed by section 422.5 for the tax year in which it was 29 withheld, irrespective of whether or not such tax has been, or 30 will be, paid by the withholding agent to the department as 31 provided by this chapter. 32 10. a. If the amount of income tax withheld by the 33 withholding agent on behalf of an employee, nonresident, or 34 other person after complying with this section is more than the 35 -12- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 12/ 39

income tax liability of said employee, nonresident, or other 1 person as determined under the provisions of this subchapter, 2 the overpayment of tax may first be credited against any income 3 tax or installment payment then due the state of Iowa by 4 the employee, nonresident, or other person for the tax year, 5 and any balance of one dollar or more shall be refunded to 6 the employee, nonresident, or other person with interest in 7 accordance with section 421.60, subsection 2, paragraph “e” . 8 b. Amounts less than one dollar shall be refunded to the 9 taxpayer, nonresident, or other person only upon written 10 application, in accordance with section 422.73, and only if the 11 application is filed within twelve months after the due date 12 of the return. 13 c. Refunds in the amount of one dollar or more provided 14 for by this subsection shall be paid by the treasurer of 15 state by warrants drawn by the director of the department of 16 administrative services, or an authorized employee of the 17 department of administrative services, and the taxpayer’s 18 return of income shall constitute a claim for refund for this 19 purpose, except in respect to amounts of less than one dollar. 20 There is appropriated, out of any funds in the state treasury 21 not otherwise appropriated, a sum sufficient to carry out the 22 provisions of this subsection. 23 11. a. In addition to any other penalty provided by law, 24 a withholding agent required to furnish or file an income 25 statement required by this chapter is subject to a civil 26 penalty of five hundred dollars for each occurrence of the 27 following: 28 (1) Willful failure to furnish an employee, nonresident, or 29 other person with an income statement. 30 (2) Willfully furnishing an employee, nonresident, or other 31 person with a false or fraudulent income statement. 32 (3) Willful failure to file an income statement with the 33 department. 34 (4) Willfully filing a false or fraudulent income statement 35 -13- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 13/ 39

with the department. 1 b. A withholding agent is subject to the penalty as provided 2 in section 421.27. Any penalty assessed under section 421.27 3 shall be in addition to the tax or additional tax due under 4 this section. The taxpayer shall also pay interest on the tax 5 or additional tax at the rate in effect under section 421.7, 6 for each month counting each fraction of a month as an entire 7 month, computed from the date the semimonthly, monthly, or 8 quarterly deposit form was required to be filed. The penalty 9 and interest become a part of the tax due from the withholding 10 agent. 11 c. If any withholding agent, being a domestic or foreign 12 corporation, required under the provisions of this section 13 to withhold on wages or other taxable Iowa income subject to 14 this chapter, fails to withhold the amounts required to be 15 withheld, make the required returns or remit to the department 16 the amounts withheld, the director may, having exhausted 17 all other means of enforcement of the provisions of this 18 chapter, certify such fact or facts to the secretary of state, 19 who shall thereupon cancel the articles of incorporation or 20 foreign registration statement, as the case may be, of such 21 corporation, and the rights of such corporation to carry on 22 business in the state of Iowa shall cease. The secretary of 23 state shall immediately notify by registered mail such domestic 24 or foreign corporation of the action taken by the secretary of 25 state. The provisions of section 422.40, subsection 3, shall 26 be applicable. 27 d. The department shall, upon request of any fiduciary, 28 furnish said fiduciary with a certificate of acquittance 29 showing that no liability as a withholding agent exists with 30 respect to the estate or trust for which said fiduciary acts, 31 provided the department has determined that there is no such 32 liability. 33 12. a. (1) Taxpayers filing a return shall make estimated 34 tax payments if their Iowa income tax liability can reasonably 35 -14- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 14/ 39

be expected to amount to two hundred dollars or more for the 1 year. 2 (2) In the cases of farmers and fishermen, the exceptions 3 provided in the Internal Revenue Code with respect to making 4 estimated payments apply. 5 b. (1) The estimated tax shall be paid in quarterly 6 installments. The first installment shall be paid on or before 7 the last day of the fourth month of the taxpayer’s tax year for 8 which the estimated payments apply. The other installments 9 shall be paid on or before the last day of the sixth month of 10 the tax year, the last day of the ninth month of the tax year, 11 and the last day of the first month after the tax year. A 12 taxpayer may elect to pay an installment prior to the due date. 13 (2) If a taxpayer filing a return has reason to believe that 14 the taxpayer’s Iowa income tax may increase or decrease, either 15 for purposes of meeting the requirement to make estimated 16 tax payments or for the purpose of increasing or decreasing 17 estimated tax payments, the taxpayer shall increase or decrease 18 any subsequent estimated tax payments accordingly. 19 (3) Any tax still payable after applying credits for taxes 20 paid through withholding, estimated tax, and composite return 21 tax, is due and payable on or before the end of the fourth month 22 following the close of the tax year. 23 c. If a taxpayer is unable to make the taxpayer’s estimated 24 tax payments, the payments may be made by a duly authorized 25 agent, or by the guardian or other person charged with the care 26 of the person or property of the taxpayer. 27 d. (1) Estimated tax paid is a credit against the amount 28 of tax found payable on a final, completed return, as provided 29 in subsection 10, relating to the credit for the tax withheld 30 against the tax found payable on a return properly and 31 correctly prepared under sections 422.5 through 422.25. 32 (2) Any overpayment of one dollar or more shall be refunded 33 to the taxpayer and the return constitutes a claim for refund 34 for this purpose. Amounts less than one dollar shall not be 35 -15- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 15/ 39

refunded. 1 (3) The method provided by section 6654 of the Internal 2 Revenue Code for determining what is applicable to the addition 3 to tax for underpayment of the tax payable applies to persons 4 required to make payments of estimated tax under this section 5 except the amount to be added to the tax for underpayment of 6 estimated tax is an amount determined at the rate in effect 7 under section 421.7. This addition to tax specified for 8 underpayment of the tax payable is not subject to waiver 9 provisions relating to reasonable cause, except as provided in 10 the Internal Revenue Code. Underpayment of estimated tax shall 11 be determined in the same manner as provided under the Internal 12 Revenue Code and the exceptions in the Internal Revenue Code 13 also apply. 14 e. In lieu of claiming a refund, the taxpayer may elect to 15 have the overpayment shown on the taxpayer’s final, completed 16 return for the taxable year credited to the taxpayer’s tax 17 liability for the following taxable year. 18 13. The director shall enter into an agreement with the 19 secretary of the treasury of the United States with respect to 20 withholding of income tax as provided by this chapter, pursuant 21 to an Act of Congress, section 1207 of the Tax Reform Act of 22 1976, Pub. L. No. 94-455, amending 5 U.S.C. §5517. 23 14. a. The director may, when necessary and advisable 24 in order to secure the collection of the tax required to 25 be deducted and withheld or the amount actually deducted, 26 whichever is greater, require a withholding agent to file with 27 the director a bond, issued by a surety company authorized to 28 conduct business in this state and approved by the insurance 29 commissioner as to solvency and responsibility, in an amount 30 as the director may fix, to secure the payment of the tax and 31 penalty due or which may become due. In lieu of the bond, 32 securities shall be kept in the custody of the department and 33 may be sold by the director at public or private sale, without 34 notice to the depositor, if it becomes necessary to do so in 35 -16- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 16/ 39

order to recover any tax and penalty due. Upon a sale, any 1 surplus above the amounts due under this section shall be 2 returned to the withholding agent who deposited the securities. 3 b. If the withholding agent fails to file the bond as 4 requested by the director to secure collection of the tax, the 5 withholding agent is subject to penalty for failure to file the 6 bond. The penalty is equal to fifteen percent of the tax the 7 withholding agent is required to withhold on an annual basis. 8 However, the penalty shall not exceed five thousand dollars. 9 15. The director may allow additional time for filing 10 documents required under this section with the department in 11 the case of illness, disability, absence, or if good cause is 12 shown. 13 Sec. 18. Section 422.16B, subsection 7, Code 2023, is 14 amended to read as follows: 15 7. All powers of the director and requirements of the 16 director apply to returns filed under this section including 17 but not limited to the provisions of this subchapter and 18 subchapter VI . The provisions of section 422.16, subsection 2 19 4 , paragraph “c” , and subsections 6, 10 7, 11 , and 14, applying 20 to withholding agents, shall apply in the same manner to 21 pass-through entities under this section . 22 Sec. 19. Section 422.17, Code 2023, is amended to read as 23 follows: 24 422.17 Certificate issued by department to make payments 25 without withholding. 26 Any nonresident whose Iowa income is not subject to section 27 422.16, subsection 1 2, paragraph “a” , “c” , “d” , or “e” , in 28 whole or in part, and who elects to be governed by section 29 422.16, subsection 12 2, paragraph “b” , to the extent that the 30 nonresident pays the entire amount of tax properly estimated on 31 or before the last day of the fourth month of the nonresident’s 32 tax year, for the year, may for the year of the election 33 and payment, be granted a certificate from the department 34 authorizing each withholding agent, the income from whom the 35 -17- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 17/ 39

nonresident has considered in the payment of estimated tax and 1 to the extent the income is included in the estimate, to make 2 payments of income to the nonresident without withholding tax 3 from those payments. Withholding agents, if payments exceed 4 the tax liability estimated by the nonresident as indicated 5 upon the certificate, shall withhold tax in accordance with 6 section 422.16, subsection 12 2, paragraph “b” . 7 DIVISION V 8 FUTURE CORRESPONDING CHANGE 9 Sec. 20. Section 422.16, subsection 2, paragraph e, Code 10 2023, as amended in this Act, is amended to read as follows: 11 e. For the purposes of this subsection, state income tax 12 shall be withheld at the highest rate described in section 13 422.5A 422.5 from supplemental wages of an employee in those 14 circumstances in which the employer treats the supplemental 15 wages as wholly separate from regular wages for purposes 16 of withholding and federal income tax is withheld from the 17 supplemental wages under section 3402(g) of the Internal 18 Revenue Code. 19 Sec. 21. EFFECTIVE DATE. This division of this Act takes 20 effect January 1, 2026. 21 DIVISION VI 22 SETTLEMENT AUTHORITY —— NOTICE OF ASSESSMENT —— ESTIMATION OF 23 TAX 24 Sec. 22. Section 421.5, Code 2023, is amended by striking 25 the section and inserting in lieu thereof the following: 26 421.5 Settling claims for taxes, penalties, and interest —— 27 abatement. 28 1. As used in this section: 29 a. “Department” means the department of revenue. 30 b. “Settle” or “settlement” includes any compromise or 31 abatement of any taxes, penalties, or interest. 32 2. In addition to the authority granted to the department 33 pursuant to section 17A.10 and notwithstanding section 7D.9, 34 the department may, in its sole discretion, settle any taxes, 35 -18- HF 715.1946 (1) 90 (amending this HF 715 to CONFORM to SF 565) jm/jh 18/ 39