House File 2246 - Introduced
HOUSE FILE
BY SCHICKEL
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing a tax credit to a small business for
2 unemployment benefits paid to national guard and military
3 reserve replacement workers and including a retroactive
4 applicability date provision.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. NEW SECTION. 422.11M UNEMPLOYMENT BENEFITS
1 2 TAX CREDIT == SMALL BUSINESSES.
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 an unemployment benefits tax credit. This credit shall only
1 6 be available to small businesses that employed not more than
1 7 fifty permanent full=time employees during the previous tax
1 8 year. The amount of the unemployment benefits tax credit
1 9 equals one hundred percent of the state unemployment benefits
1 10 received by each temporary employee hired by the eligible
1 11 small business to temporarily replace a permanent full=time
1 12 employee who was a member of the Iowa national guard or
1 13 reserve forces of the United States and who was activated for
1 14 federal duty, other than training, for a minimum aggregate of
1 15 ninety days.
1 16 Notwithstanding any confidentiality provision, upon
1 17 application to the department of workforce development by the
1 18 taxpayer, the department shall provide the taxpayer with the
1 19 amount of state unemployment benefits paid to the temporary
1 20 employees for whom the state tax credit is claimed.
1 21 2. If the unemployment benefits tax credit exceeds the tax
1 22 liability of the taxpayer, the excess is nonrefundable but may
1 23 be credited to the tax liability for the following seven years
1 24 or until depleted, whichever is the earlier.
1 25 3. An individual may claim an unemployment benefits tax
1 26 credit allowed a partnership, limited liability company, S
1 27 corporation, estate, or trust electing to have the income
1 28 taxed directly to the individual. The amount claimed by the
1 29 individual shall be based upon the pro rata share of the
1 30 individual's earnings of the partnership, limited liability
1 31 company, S corporation, estate, or trust.
1 32 Sec. 2. Section 422.33, Code Supplement 2005, is amended
1 33 by adding the following new subsection:
1 34 NEW SUBSECTION. 20. The taxes imposed under this division
1 35 shall be reduced by an unemployment benefits tax credit
2 1 allowed small businesses in the manner and under the
2 2 requirements specified in section 422.11M.
2 3 Sec. 3. Section 422.60, Code Supplement 2005, is amended
2 4 by adding the following new subsection:
2 5 NEW SUBSECTION. 11. The taxes imposed under this division
2 6 shall be reduced by an unemployment benefits tax credit
2 7 allowed small businesses in the manner and under the
2 8 requirements specified in section 422.11M.
2 9 Sec. 4. NEW SECTION. 432.12H UNEMPLOYMENT BENEFITS TAX
2 10 CREDIT.
2 11 The taxes imposed under this chapter shall be reduced by an
2 12 unemployment benefits tax credit allowed small businesses in
2 13 the manner and under the requirements specified in section
2 14 422.11M.
2 15 Sec. 5. Section 533.24, Code Supplement 2005, is amended
2 16 by adding the following new subsection:
2 17 NEW SUBSECTION. 8. The moneys and credits tax imposed
2 18 under this section shall be reduced by an unemployment
2 19 benefits tax credit allowed small businesses in the manner and
2 20 under the requirements specified in section 422.11M.
2 21 Sec. 6. RETROACTIVE APPLICABILITY DATE. This Act applies
2 22 retroactively to January 1, 2006, for tax years beginning on
2 23 or after that date.
2 24 EXPLANATION
2 25 This bill allows a tax credit under the individual and
2 26 corporate income taxes, franchise tax, premiums tax, and
2 27 moneys and credits tax for small businesses in the amount of
2 28 the unemployment benefits paid to each employee who
2 29 temporarily replaces a permanent full=time employee who was a
2 30 member of the Iowa national guard or reserve forces and who
2 31 was activated for federal duty, other than training, for a
2 32 minimum aggregate of 90 days. The credit is nonrefundable but
2 33 may be carried forward for up to seven tax years.
2 34 The bill applies retroactively to January 1, 2006, for tax
2 35 years beginning on or after that date.
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