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 6 mg/pj/5 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 thantentwenty 1 10 thousand dollars, seventy=five percent. 1 11 b. For a taxpayer with net income oftentwenty thousand 1 12 dollars or more but less thantwentyforty thousand dollars, 1 13 sixty=five percent. 1 14 c. For a taxpayer with net income oftwentyforty thousand 1 15 dollars or more but less thantwenty=fivefifty thousand 1 16 dollars, fifty=five percent. 1 17 d. For a taxpayer with net income oftwenty=fivefifty 1 18 thousand dollars or more but less thanthirty=fiveseventy 1 19 thousand dollars, fifty percent. 1 20 e. For a taxpayer with net income ofthirty=fiveseventy 1 21 thousand dollars or more but less thanfortyeighty thousand 1 22 dollars, forty percent. 1 23 f. For a taxpayer with net income offortyeighty 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 2 6 mg:nh/pj/5