Senate File 2026 - 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 amount and extending the availability of
2 the child and dependent care and early childhood development
3 tax credits and including a retroactive applicability date
4 provision.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 422.12C, subsection 1, Code 2007, is
1 2 amended to read as follows:
1 3 1. The taxes imposed under this division, less the amounts
1 4 of nonrefundable credits allowed under this division, shall be
1 5 reduced by a child and dependent care credit equal to the
1 6 following percentages of the federal child and dependent care
1 7 credit provided in section 21 of the Internal Revenue Code:
1 8 a. For a taxpayer with net income of less than ten
1 9 thousand dollars, seventy=five one hundred percent.
1 10 b. For a taxpayer with net income of ten thousand dollars
1 11 or more but less than twenty thousand dollars, sixty=five
1 12 seventy=five percent.
1 13 c. For a taxpayer with net income of twenty thousand
1 14 dollars or more but less than twenty=five thirty thousand
1 15 dollars, fifty=five sixty=five percent.
1 16 d. For a taxpayer with net income of twenty=five thirty
1 17 thousand dollars or more but less than thirty=five forty
1 18 thousand dollars, fifty fifty=five percent.
1 19 e. For a taxpayer with net income of thirty=five forty
1 20 thousand dollars or more but less than forty fifty thousand
1 21 dollars, forty fifty percent.
1 22 f. For a taxpayer with net income of forty fifty thousand
1 23 dollars or more but less than forty=five sixty thousand
1 24 dollars, thirty forty percent.
1 25 g. For a taxpayer with net income of forty=five sixty
1 26 thousand dollars or more, zero but less than eighty thousand
1 27 dollars, thirty percent.
1 28 h. For a taxpayer with net income of eighty thousand
1 29 dollars or more, zero percent.
1 30 Sec. 2. Section 422.12C, subsection 2, unnumbered
1 31 paragraph 1, Code 2007, is amended to read as follows:
1 32 The taxes imposed under this division, less the amounts of
1 33 nonrefundable credits allowed under this division, may be
1 34 reduced by an early childhood development tax credit equal to
1 35 twenty=five percent of the first one thousand dollars which
2 1 the taxpayer has paid to others for each dependent, as defined
2 2 in the Internal Revenue Code, ages three through five for
2 3 early childhood development expenses. In determining the
2 4 amount of early childhood development expenses for the tax
2 5 year beginning in the 2006 calendar year only, such expenses
2 6 paid during November and December of the previous tax year
2 7 shall be considered paid in the tax year for which the tax
2 8 credit is claimed. This credit is available to a taxpayer
2 9 whose net income is less than forty=five eighty thousand
2 10 dollars. If the early childhood development tax credit is
2 11 claimed for a tax year, the taxpayer and the taxpayer's spouse
2 12 shall not claim the child and dependent care credit under
2 13 subsection 1. As used in this subsection, "early childhood
2 14 development expenses" means services provided to the dependent
2 15 by a preschool, as defined in section 237A.1, materials, and
2 16 other activities as follows:
2 17 Sec. 3. RETROACTIVE APPLICABILITY DATE. This Act applies
2 18 retroactively to January 1, 2008, for tax years beginning on
2 19 or after that date.
2 20 EXPLANATION
2 21 This bill extends the availability of the child and
2 22 dependent care tax credit and the early childhood development
2 23 tax credit to taxpayers with net incomes of less than $80,000.
2 24 Currently, the credits are available to taxpayers with net
2 25 incomes of less than $45,000.
2 26 The bill also changes the schedule for determining the
2 27 amount of the child and dependent care tax credit. The credit
2 28 is equal to a percent of the federal child and dependent care
2 29 tax credit as follows:
2 30 Net Income Between Percentage
2 31 0 == $10,000 75
2 32 $10,000 == $20,000 65
2 33 $20,000 == $25,000 55
2 34 $25,000 == $35,000 50
2 35 $35,000 == $40,000 40
3 1 $40,000 == $45,000 30
3 2 $45,000 or more 0
3 3 The bill provides a new schedule as follows:
3 4 Net Income Between Percentage
3 5 0 == $10,000 100
3 6 $10,000 == $20,000 75
3 7 $20,000 == $30,000 65
3 8 $30,000 == $40,000 55
3 9 $40,000 == $50,000 50
3 10 $50,000 == $60,000 40
3 11 $60,000 == $80,000 30
3 12 $80,000 or more 0
3 13 The bill applies retroactively to January 1, 2008, for tax
3 14 years beginning on or after that date.
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