House File 636 - Introduced HOUSE FILE BY SANDS Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act increasing the eligibility for the state child and 2 dependent care tax credit and including a retroactive 3 applicability date provision. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2285YH 83 6 tw/mg:sc/8 PAG LIN 1 1 Section 1. Section 422.12C, subsection 1, Code 2009, 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 thantenfifteen 1 9 thousand dollars, seventy=five percent. 1 10 b. For a taxpayer with net income oftenfifteen thousand 1 11 dollars or more but less thantwentytwenty=five thousand 1 12 dollars, sixty=five percent. 1 13 c. For a taxpayer with net income oftwentytwenty=five 1 14 thousand dollars or more but less thantwenty=fivethirty 1 15 thousand dollars, fifty=five percent. 1 16 d. For a taxpayer with net income oftwenty=fivethirty 1 17 thousand dollars or more but less thanthirty=fiveforty 1 18 thousand dollars, fifty percent. 1 19 e. For a taxpayer with net income ofthirty=fiveforty 1 20 thousand dollars or more but less thanfortyforty=five 1 21 thousand dollars, forty percent. 1 22 f. For a taxpayer with net income offortyforty=five 1 23 thousand dollars or more but less thanforty=fivefifty 1 24 thousand dollars, thirty percent. 1 25 g. For a taxpayer with net income offorty=fivefifty 1 26 thousand dollars or more, zero percent. 1 27 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 1 28 retroactively to January 1, 2009, for tax years beginning on 1 29 or after that date. 1 30 EXPLANATION 1 31 This bill relates to the state child and dependent care tax 1 32 credit. 1 33 The amount of the tax credit is calculated as a percentage 1 34 of the amount of the credit for which a taxpayer is eligible 1 35 under the federal child and dependent care tax credit. The 2 1 percentage amount is determined on a graduated basis according 2 2 to the taxpayer's income with the amount of the credit 2 3 decreasing as income increases, eventually phasing out for 2 4 taxpayers with a net income of $45,000 or more. The bill 2 5 increases the amount at which the credit is phased out to 2 6 $50,000 and adjusts each of the other income thresholds upward 2 7 by $5,000. 2 8 LSB 2285YH 83 2 9 tw/mg:sc/8