House Study Bill 8



                                       HOUSE FILE       
                                       BY  (PROPOSED COMMITTEE ON
                                            WAYS AND MEANS BILL BY
                                            CHAIRPERSON VAN FOSSEN)


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act expanding the child and dependent care credit under the
  2    individual income tax and including a retroactive
  3    applicability date.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 1509YC 81
  6 mg/pj/5

PAG LIN



  1  1    Section 1.  Section 422.12C, subsection 1, paragraph f,
  1  2 Code 2005, is amended to read as follows:
  1  3    f.  For a taxpayer with net income of forty thousand
  1  4 dollars or more, zero but less than fifty thousand dollars,
  1  5 thirty percent.
  1  6    Sec. 2.  Section 422.12C, subsection 1, Code 2005, is
  1  7 amended by adding the following new paragraphs:
  1  8    NEW PARAGRAPH.  g.  For a taxpayer with net income of fifty
  1  9 thousand dollars or more but less than sixty thousand dollars,
  1 10 twenty percent.
  1 11    NEW PARAGRAPH.  h.  For a taxpayer with net income of sixty
  1 12 thousand dollars or more but less than seventy thousand
  1 13 dollars, ten percent.
  1 14    NEW PARAGRAPH.  i.  For a taxpayer with net income of
  1 15 seventy thousand dollars or more, zero percent.
  1 16    Sec. 3.  APPLICABILITY DATE.  This Act applies
  1 17 retroactively to January 1, 2005, for tax years beginning on
  1 18 or after that date.
  1 19                           EXPLANATION
  1 20    Under present law, a child and dependent care credit is
  1 21 allowed under the individual income tax.  This credit is a
  1 22 percentage of the federal credit for those with Iowa net
  1 23 incomes of less than $40,000.  This bill expands this credit
  1 24 to those with net income of up to $70,000.  The bill provides
  1 25 that those with net incomes between $40,000 and $50,000
  1 26 receive a credit equal to 30 percent of the federal credit.
  1 27 Those between $50,000 and $60,000 receive a 20 percent credit,
  1 28 those between $60,000 and $70,000 receive a 10 percent credit,
  1 29 and those with $70,000 or over in net income receive no
  1 30 credit.
  1 31    The bill applies retroactively beginning with the 2005 tax
  1 32 year.
  1 33 LSB 1509YC 81
  1 34 mg/pj/5