House File 803 - Introduced HOUSE FILE BY FORD Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act providing for a deduction from the individual and 2 corporate income taxes for wages paid to certain newly hired 3 workers and including a retroactive applicability date 4 provision. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 2582HH 83 7 tw/mg:sc/5 PAG LIN 1 1 Section 1. Section 422.7, Code 2009, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 12B. a. If the adjusted gross income 1 4 includes income or loss from a business operated by the 1 5 taxpayer, an additional deduction shall be allowed in 1 6 computing the income or loss from the business if the business 1 7 hired for employment in the state during its annual accounting 1 8 period ending with or during the taxpayer's tax year an 1 9 individual who is sixty=five years of age or older on the date 1 10 hired. 1 11 b. The amount of the additional deduction shall be equal 1 12 to twenty percent of the wages paid to such individual, not to 1 13 exceed five thousand dollars per individual, hired for the 1 14 first time by that business during the annual accounting 1 15 period ending with or during the taxpayer's tax year. 1 16 c. The additional deduction shall not be allowed for wages 1 17 paid to an individual who was hired to replace an individual 1 18 whose employment was terminated by the employer within the 1 19 twelve=month period preceding the date of first employment. 1 20 However, if the individual being replaced left employment 1 21 voluntarily without good cause attributable to the employer or 1 22 if the individual was discharged for misconduct in connection 1 23 with the individual's employment, as determined by the 1 24 department of workforce development, the additional deduction 1 25 shall be allowed. 1 26 d. A taxpayer who is a partner of a partnership or a 1 27 shareholder of an S corporation may deduct that portion of 1 28 wages qualified under this subsection paid by the partnership 1 29 or S corporation based on the taxpayer's pro rata share of the 1 30 profits or losses from the partnership or S corporation. 1 31 Sec. 2. Section 422.35, Code 2009, is amended by adding 1 32 the following new subsection: 1 33 NEW SUBSECTION. 6B. a. If the taxpayer is a business 1 34 corporation, an additional deduction is allowed in computing 1 35 income or loss of the business equal to twenty percent of the 2 1 wages paid to an individual, not to exceed five thousand 2 2 dollars per individual, hired for the first time by the 2 3 taxpayer during the tax year for work done in this state, if 2 4 the individual is sixty=five years of age or older on the date 2 5 hired. 2 6 b. The additional deduction shall not be allowed for wages 2 7 paid to an individual who was hired to replace an individual 2 8 whose employment was terminated by the employer within the 2 9 twelve=month period preceding the date of first employment. 2 10 However, if the individual being replaced left employment 2 11 voluntarily without good cause attributable to the employer or 2 12 if the individual was discharged for misconduct in connection 2 13 with the individual's employment, as determined by the 2 14 department of workforce development, the additional deduction 2 15 shall be allowed. 2 16 Sec. 3. RETROACTIVE APPLICABILITY DATE. This Act applies 2 17 retroactively to January 1, 2009, for tax years beginning on 2 18 or after that date. 2 19 EXPLANATION 2 20 This bill provides an additional individual and corporate 2 21 income tax deduction to a taxpayer who hires an individual who 2 22 is at least 65 years old for work done in the state. The 2 23 amount of the additional deduction is 20 percent of the wages 2 24 paid to the individual, not to exceed $5,000 per individual. 2 25 The deduction is in addition to any deduction provided for in 2 26 the federal Internal Revenue Code. 2 27 The bill applies retroactively to January 1, 2009, for tax 2 28 years beginning on or after that date. 2 29 LSB 2582HH 83 2 30 tw/mg:sc/5