House File 183 - Introduced



                                    HOUSE FILE       
                                    BY  RAECKER


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

                                      A BILL FOR

  1 An Act providing for an individual income tax deduction for
  2    contributions made to a qualified tuition program established
  3    by a state other than Iowa and including effective and
  4    retroactive applicability date provisions.
  5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  6 TLSB 1914HH 82
  7 mg/es/88

PAG LIN



  1  1    Section 1.  Section 422.7, Code 2007, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  32A.  a.  Subtract contributions made by
  1  4 the taxpayer as a participant in a qualified tuition program,
  1  5 as defined in section 529(b) of the Internal Revenue Code,
  1  6 established by a state other than Iowa or an agency or
  1  7 instrumentality of such state.  The maximum amount that may be
  1  8 subtracted under this paragraph equals the maximum amount that
  1  9 is deductible under section 12D.3, subsection 1, paragraph
  1 10 "a", for contributions made to the Iowa educational savings
  1 11 plan trust minus any amount subtracted pursuant to subsection
  1 12 32, paragraph "a", of this section.
  1 13    b.  Add the amount of cash refunds or withdrawals refunded
  1 14 to the taxpayer as a participant in a qualified tuition
  1 15 program that is not used to satisfy qualified higher education
  1 16 expenses, as defined in section 529(e) of the Internal Revenue
  1 17 Code, to the extent previously deducted under paragraph "a".
  1 18    Sec. 2.  EFFECTIVE AND RETROACTIVE DATE.  This Act, being
  1 19 deemed of immediate importance, takes effect upon enactment
  1 20 and applies retroactively to January 1, 2007, for tax years
  1 21 beginning on or after that date.
  1 22                           EXPLANATION
  1 23    This bill allows for an individual income tax deduction for
  1 24 contributions made to a qualified tuition program established
  1 25 by a state other than Iowa.  The program is the counterpart to
  1 26 the Iowa educational savings plan trust (state program) and
  1 27 allows a taxpayer to make contributions to a trust set up in
  1 28 the name of a designated beneficiary to pay the costs
  1 29 associated with higher education.  The amount that may be
  1 30 deducted is the maximum amount that may be deducted for
  1 31 contributions to the Iowa state program (almost $2,600 for tax
  1 32 year 2006, to be adjusted for inflation) less any amount that
  1 33 has been deducted for the tax year for contributions to the
  1 34 Iowa state program.
  1 35    The bill also provides that any refunds or withdrawals made
  2  1 which the taxpayer receives and which are not used for
  2  2 qualified tuition costs are to be included in income to the
  2  3 extent previously deducted.
  2  4    The bill takes effect upon enactment and applies
  2  5 retroactively to January 1, 2007, for tax years beginning on
  2  6 or after that date.
  2  7 LSB 1914HH 82
  2  8 mg:rj/es/88.1