House File 2352 - Introduced HOUSE FILE 2352 BY LUKAN A BILL FOR An Act providing an Iowa rebate tax credit for eligible 1 individuals, providing an exemption from the computation of 2 the state individual income tax, and including effective 3 date and retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5337YH (3) 84 mm/sc

H.F. 2352 DIVISION I 1 IOWA TAX REBATE CREDIT 2 Section 1. NEW SECTION . 422.11I Iowa tax rebate credit. 3 1. For purposes of this section, unless the context 4 otherwise requires, “eligible individual” means an Iowa resident 5 who, for the first tax year beginning on or after January 1, 6 2011, had an Iowa individual net income tax liability which was 7 greater than zero, and who made and filed an income tax return 8 pursuant to section 422.13 for that tax year. An eligible 9 individual does not include an estate or trust, or a resident 10 with respect to whom a deduction under section 151 of the 11 Internal Revenue Code is allowable to another taxpayer for the 12 first tax year beginning on or after January 1, 2011. 13 2. The taxes imposed under this division, less the credits 14 allowed under section 422.12, shall be reduced by an Iowa tax 15 rebate credit to an eligible individual for the first tax year 16 beginning on or after January 1, 2012, in the amount of three 17 hundred dollars. 18 3. The amount of the credit allowable in subsection 2 shall 19 be reduced, but not below zero, by the aggregate refunds and 20 credits made or allowed to the taxpayer under subsection 5. 21 4. Any credit in excess of the taxpayer’s tax liability 22 shall be refunded. In lieu of claiming the refund, the 23 taxpayer may elect to have the overpayment shown on the 24 taxpayer’s final, completed return credited to the tax 25 liability for the following tax year. 26 5. a. Each taxpayer who is an eligible individual shall 27 be treated as having made a payment against the tax imposed 28 in this chapter for such first tax year beginning on or after 29 January 1, 2011, in an amount equal to the credit in subsection 30 2. 31 b. The director shall, subject to the provisions of this 32 section, refund or credit any overpayment attributable to this 33 subsection as soon as practicable. A refund or credit shall 34 not be made or allowed under this subsection after December 31, 35 -1- LSB 5337YH (3) 84 mm/sc 1/ 3

H.F. 2352 2012. 1 c. Notwithstanding any other provision of this chapter, 2 interest shall not be allowed on any overpayment attributable 3 to this subsection. 4 6. This section is repealed on June 30, 2013. 5 Sec. 2. EFFECTIVE UPON ENACTMENT. This division of this 6 Act, being deemed of immediate importance, takes effect upon 7 enactment. 8 Sec. 3. RETROACTIVE APPLICABILITY. This division of this 9 Act applies retroactively to January 1, 2012, for the tax year 10 beginning on or after January 1, 2012, and ending on December 11 31, 2012. 12 DIVISION II 13 INCOME TAX EXEMPTION FOR IOWA TAX REBATE CREDIT 14 Sec. 4. Section 422.7, Code Supplement 2011, is amended by 15 adding the following new subsection: 16 NEW SUBSECTION . 6. a. Subtract the credit or refund 17 received from the Iowa tax rebate credit pursuant to section 18 422.11I to the extent that the credit or refund increased 19 federal adjusted gross income. 20 b. This subsection is repealed on June 30, 2014. 21 Sec. 5. EFFECTIVE UPON ENACTMENT. This division of this 22 Act, being deemed of immediate importance, takes effect upon 23 enactment. 24 Sec. 6. RETROACTIVE APPLICABILITY. This division of this 25 Act applies retroactively to January 1, 2012, for tax years 26 beginning on or after that date. 27 EXPLANATION 28 This bill relates to the creation of an Iowa tax rebate 29 credit and an individual income tax exemption for the Iowa tax 30 rebate credit. 31 Division I of the bill relates to the Iowa tax rebate credit. 32 This division provides a one-time refundable individual 33 income tax credit to eligible individuals for the 2012 tax 34 year equal to $300. “Eligible individual” is defined as an 35 -2- LSB 5337YH (3) 84 mm/sc 2/ 3

H.F. 2352 Iowa resident who had a 2011 Iowa individual net income tax 1 liability which was greater than zero, and who made and filed 2 an Iowa income tax return for that tax year. An eligible 3 individual does not include an estate or trust, or a resident 4 who could be claimed as a dependent on the federal income tax 5 return of another taxpayer for the 2011 tax year. 6 An eligible individual who qualifies for the credit 7 is treated as having made a payment against the eligible 8 individual’s 2011 tax in an amount equal to the credit. The 9 director is required to refund or credit any overpayment 10 attributable to this payment as soon as practicable. A refund 11 or credit shall not be made or allowed with respect to this 12 advance refund after December 31, 2012. Interest shall not be 13 allowed on any overpayment attributable to this advance refund. 14 The amount of the credit allowed in 2012 shall be reduced, 15 but not below zero, by the advance refund or credit described 16 above. Any credit in excess of the taxpayer’s liability shall 17 be refunded. The Iowa tax rebate credit is automatically 18 repealed on June 30, 2013. 19 The division takes effect upon enactment and applies to the 20 tax year beginning on or after January 1, 2012, and ending on 21 December 31, 2012. 22 Division II of the bill relates to an exemption from the 23 individual income tax for the Iowa tax rebate credit. 24 The division provides an exemption from the state individual 25 income tax for the amount of any credit or refund received 26 from the Iowa tax rebate credit, to the extent the credit or 27 refund increased federal adjusted gross income. The income tax 28 exemption is automatically repealed on June 30, 2014. 29 The division takes effect upon enactment and applies 30 retroactively to January 1, 2012, for tax years beginning on 31 or after that date. 32 -3- LSB 5337YH (3) 84 mm/sc 3/ 3