SENATE FILE 2161

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SSB 3116)

A BILL FOR

An Act relating to the amount of the earned income tax credit and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.12B, subsection 1, Code 2011, is amended to read as follows:
   1.  The taxes imposed under this division less the credits allowed under section 422.12 shall be reduced by an earned income credit equal to seven
 
thirteen percent of the federal earned income credit provided in section 32 of the Internal Revenue Code. Any credit in excess of the tax liability is refundable.
    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2012, for tax years beginning on or after that date.
EXPLANATION
   This bill increases the amount of the state earned income tax credit. Currently, the credit is equal to 7 percent of the amount of a taxpayer’s federal earned income tax credit. The bill increases the amount of the credit to 13 percent.
   The bill applies retroactively to January 1, 2012, for tax years beginning on or after that date.