Senate File 136 - Introduced



                                       SENATE FILE       
                                       BY  KETTERING


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

                                      A BILL FOR

  1 An Act increasing the child and dependent care credit under the
  2    individual income tax and including a retroactive
  3    applicability date provision.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 1556XS 81
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PAG LIN



  1  1    Section 1.  Section 422.12C, subsection 1, Code 2005, is
  1  2 amended to read as follows:
  1  3    1.  The taxes imposed under this division, less the credits
  1  4 allowed under sections 422.11A, 422.11B, 422.12, and 422.12B
  1  5 shall be reduced by a child and dependent care credit equal to
  1  6 the following percentages of the federal child and dependent
  1  7 care credit provided in section 21 of the Internal Revenue
  1  8 Code:
  1  9    a.  For a taxpayer with net income of less than ten twenty
  1 10 thousand dollars, seventy=five percent.
  1 11    b.  For a taxpayer with net income of ten twenty thousand
  1 12 dollars or more but less than twenty forty thousand dollars,
  1 13 sixty=five percent.
  1 14    c.  For a taxpayer with net income of twenty forty thousand
  1 15 dollars or more but less than twenty=five fifty thousand
  1 16 dollars, fifty=five percent.
  1 17    d.  For a taxpayer with net income of twenty=five fifty
  1 18 thousand dollars or more but less than thirty=five seventy
  1 19 thousand dollars, fifty percent.
  1 20    e.  For a taxpayer with net income of thirty=five seventy
  1 21 thousand dollars or more but less than forty eighty thousand
  1 22 dollars, forty percent.
  1 23    f.  For a taxpayer with net income of forty eighty thousand
  1 24 dollars or more, zero percent.
  1 25    Sec. 2.  RETROACTIVE APPLICABILITY DATE.  This Act applies
  1 26 retroactively to January 1, 2005, for tax years beginning on
  1 27 or after that date.
  1 28                           EXPLANATION
  1 29    This bill increases the child and dependent care credit
  1 30 under the individual income tax by doubling each bracket
  1 31 limit.  Thus, a taxpayer with less than $80,000 in net income
  1 32 is eligible for the credit, while under present law, a
  1 33 taxpayer with less than $40,000 in net income is eligible.
  1 34 The maximum credit bracket under the bill is expanded to
  1 35 include taxpayers with net incomes of less than $20,000, while
  2  1 under present law, taxpayers may only have net incomes of less
  2  2 than $10,000 to receive the maximum credit.
  2  3    The bill applies retroactively to January 1, 2005, for tax
  2  4 years beginning on or after that date.
  2  5 LSB 1556XS 81
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