Senate File 2040 - Introduced



                                       SENATE FILE       
                                       BY  MILLER


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

                                      A BILL FOR

  1 An Act relating to a long=term care insurance tax credit under
  2    the 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 5850SS 81
  6 mg/cf/24

PAG LIN



  1  1    Section 1.  NEW SECTION.  422.11M  LONG=TERM CARE INSURANCE
  1  2 TAX CREDIT.
  1  3    The taxes imposed under this division less the credits
  1  4 allowed under section 422.12 shall be reduced by a long=term
  1  5 care insurance tax credit.  The amount of the credit is equal
  1  6 to fifty percent, not to exceed five hundred dollars, of the
  1  7 premium costs paid during the tax year on each qualified long=
  1  8 term care insurance contract that offers coverage to the
  1  9 taxpayer, the taxpayer's spouse or dependent, or a parent or
  1 10 grandparent of the taxpayer or the taxpayer's spouse.  Any
  1 11 credit in excess of the tax liability is nonrefundable.  A
  1 12 deduction is not allowed for the tax year for the amount of
  1 13 premium costs paid which is used in the calculation of the
  1 14 credit taken under this section.
  1 15    For purposes of this section, "qualified long=term care
  1 16 insurance contract" means the same as defined in section 7702B
  1 17 of the Internal Revenue Code.
  1 18    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies
  1 19 retroactively to January 1, 2006, for tax years beginning on
  1 20 or after that date.
  1 21                           EXPLANATION
  1 22    This bill provides a long=term care insurance tax credit
  1 23 under the individual income tax equal to 50 percent of the
  1 24 premiums paid by the taxpayer on each qualified long=term care
  1 25 insurance contract that covers the taxpayer, the taxpayer's
  1 26 spouse or dependent, or a parent or grandparent of the
  1 27 taxpayer or the taxpayer's spouse.  Each credit shall not
  1 28 exceed $500 and any excess credits are not refundable.  The
  1 29 insurance contract for which the credit is allowed, per the
  1 30 Internal Revenue Code, is a renewable insurance policy that
  1 31 has no cash surrender value and that provides coverage for
  1 32 necessary diagnostic, preventive, therapeutic, curing,
  1 33 treatment, mitigating, and rehabilitative services to
  1 34 chronically ill individuals prescribed by a licensed health
  1 35 care practitioner.  A deduction for premium costs paid is not
  2  1 allowed to the extent of the amount of the costs used in the
  2  2 calculation of the credit taken.
  2  3    The bill applies retroactively to January 1, 2006, for tax
  2  4 years beginning on or after that date.
  2  5 LSB 5850SS 81
  2  6 mg:rj/cf/24