House File 437 - Introduced HOUSE FILE 437 BY KOESTER A BILL FOR An Act allowing certain teachers an individual income tax 1 credit for certain expenses and including retroactive 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2367YH (2) 84 tw/sc

H.F. 437 Section 1. NEW SECTION . 422.11Y Teacher expense credit. 1 1. The taxes imposed under this division, less the credits 2 allowed under section 422.12, shall be reduced by a teacher 3 expense credit equal to the first four hundred fifty dollars 4 of the cost incurred to purchase supplies by the taxpayer to 5 assist the taxpayer in teaching at a preschool, an elementary 6 or secondary school, which school is accredited under section 7 256.11, or at a community college, all situated in Iowa. To 8 qualify for the credit, the costs must be nonreimbursable 9 from any source. If the cost incurred has been deducted in 10 computing federal adjusted gross income, the amount of such 11 deduction shall be added in determining net income under 12 section 422.7. Any credit in excess of the tax liability is 13 not refundable. 14 2. As used in this section, “supplies” includes but is 15 not limited to paper supplies, bulletin boards, books, maps, 16 charts, computer software but not hardware, and other items 17 directly used by the taxpayer as a teacher. The cost incurred 18 to purchase supplies for which a tax credit may be received 19 under this section shall not be used by a school district to 20 supplement its costs of instructional materials. 21 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 22 retroactively to January 1, 2011, for tax years beginning on 23 or after that date. 24 EXPLANATION 25 This bill provides an income tax credit of up to $450 for 26 teachers that incur expenses for supplies directly used by 27 them in teaching at preschools, accredited elementary or 28 secondary schools, or community colleges in Iowa. To qualify, 29 the expenses must be nonreimbursable from any source. If 30 the expenses were deducted in computing federal adjusted 31 gross income, the deduction shall be added in determining 32 Iowa net income. These supplies include paper supplies, 33 bulletin boards, books, maps, charts, computer software but not 34 hardware, and other similar items directly used by the taxpayer 35 -1- LSB 2367YH (2) 84 tw/sc 1/ 2

H.F. 437 as a teacher. The cost incurred to purchase supplies for which 1 a tax credit may be received under this Code section shall 2 not be used by a school district to supplement its costs of 3 instructional materials. 4 The bill applies retroactively to January 1, 2011, for tax 5 years beginning on or after that date. 6 -2- LSB 2367YH (2) 84 tw/sc 2/ 2